EMPLOYEE BENEFITS (Tables)

12 Months Ended

Dec. 31, 2012

DEFINED BENEFIT PLAN DISCLOSURE

Schedule of funded status of the plans, reconciled to the amount reported in the balance sheet

	Pension												Postretirement(a)
As of or for the Years Ended December 31, (in millions)	U.S. Plans(b)						Non-U.S. Plans(b)						U.S. Plans						Non-U.S. Plans
	2012			2011			2012			2011			2012			2011			2012			2011
Change in projected benefit obligation:
Benefit obligation, beginning of year	$	4,438		$	3,878		$	1,137		$	1,981		$	236		$	279		$	52		$	66
Service cost		154			150			53			66			5			8			3			4
Interest cost		200			207			34			37			11			13			2			2
Actuarial (gain) loss		536			653			69			(7	)		22			6			11			7
Benefits paid:
AIG assets		(12	)		(8	)		(7	)		(26	)		(11	)		(7	)		(1	)		(1	)
Plan assets		(150	)		(118	)		(35	)		(48	)		–			–			–			–
Plan amendment		–			(324	)		4			(11	)		(8	)		(63	)		–			–
Curtailments		(5	)		–			(3	)		–			–			–			(1	)		–
Settlements		–			–			(20	)		(56	)		–			–			–			–
Foreign exchange effect		–			–			(32	)		80			–			–			–			1
Dispositions		–			–			–			(888	)		–			–			–			(30	)
Acquisitions		–			–			–			–			–			–			–			–
Other		–			–			5			9			–			–			–			3
Projected benefit obligation, end of year	$	5,161		$	4,438		$	1,205		$	1,137		$	255		$	236		$	66		$	52
Change in plan assets:
Fair value of plan assets, beginning of year	$	3,432		$	3,425		$	683		$	954		$	–		$	–		$	–		$	–
Actual return on plan assets, net of expenses		438			125			34			3			–			–			–			–
AIG contributions		12			8			86			100			11			7			1			1
Benefits paid:
AIG assets		(12	)		(8	)		(7	)		(26	)		(11	)		(7	)		(1	)		(1	)
Plan assets		(150	)		(118	)		(35	)		(48	)		–			–			–			–
Settlements		–			–			(20	)		(56	)		–			–			–			–
Foreign exchange effect		–			–			(15	)		45			–			–			–			–
Dispositions		–			–			–			(295	)		–			–			–			–
Acquisitions		–			–			–			–			–			–			–			–
Other		–			–			1			6			–			–			–			–
Fair value of plan assets, end of year	$	3,720		$	3,432		$	727		$	683		$	–		$	–		$	–		$	–
Funded status, end of year	$	(1,441	)	$	(1,006	)	$	(478	)	$	(454	)	$	(255	)	$	(236	)	$	(66	)	$	(52	)
Amounts recognized in the consolidated balance sheet:
Assets	$	–		$	–		$	65		$	80		$	–		$	–		$	–		$	–
Liabilities		(1,441	)		(1,006	)		(543	)		(534	)		(255	)		(236	)		(66	)		(52	)
Total amounts recognized	$	(1,441	)	$	(1,006	)	$	(478	)	$	(454	)	$	(255	)	$	(236	)	$	(66	)	$	(52	)
Pre tax amounts recognized in Accumulated other comprehensive income (loss):
Net gain (loss)	$	(1,764	)	$	(1,550	)	$	(299	)	$	(272	)	$	(40	)	$	(18	)	$	1		$	(2	)
Prior service (cost) credit		267			303			21			30			46			48			(13	)		1
Total amounts recognized	$	(1,497	)	$	(1,247	)	$	(278	)	$	(242	)	$	6		$	30		$	(12	)	$	(1	)

(a)     We do not currently fund postretirement benefits.

(b)     Includes non-qualified unfunded plans of which the aggregate projected benefit obligation was $238 million and $210 million for the U.S. and $299 million and $267 million for the non-U.S. at December 31, 2012 and 2011, respectively.

Schedule of components of net periodic benefit cost recognized in income and other amounts recognized in Accumulated other comprehensive income (loss)

	Pension																		Postretirement
	U.S. Plans									Non-U.S. Plans									U.S. Plans									Non-U.S. Plans
(in millions)	2012			2011			2010			2012			2011			2010			2012			2011			2010			2012			2011			2010
Components of net periodic benefit cost:
Service cost	$	154		$	150		$	149		$	53		$	66		$	137		$	5		$	8		$	8		$	3		$	4		$	8
Interest cost		200			207			216			34			37			59			11			13			15			2			2			4
Expected return on assets		(240	)		(250	)		(259	)		(20	)		(25	)		(31	)		–			–			–			–			–			–
Amortization of prior service (credit) cost		(33	)		(7	)		1			(4	)		(4	)		(9	)		(10	)		(2	)		–			–			–			–
Amortization of net (gain) loss		118			65			57			13			15			45			–			–			(1	)		–			–			–
Net curtailment (gain) loss		–			–			1			1			–			(1	)		–			–			(2	)		(1	)		–			–
Net settlement (gain) loss		–			–			58			4			8			3			–			–			(6	)		–			–			–
Other		–			–			–			–			–			2			–			–			–			–			–			–
Net periodic benefit cost	$	199		$	165		$	223		$	81		$	97		$	205		$	6		$	19		$	14		$	4		$	6		$	12
Amount associated with discontinued operations	$	(2	)	$	–		$	1		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Total recognized in Accumulated other comprehensive income (loss)	$	(250	)	$	(396	)	$	85		$	(36	)	$	261		$	167		$	(23	)	$	56		$	(3	)	$	(11	)	$	(6	)	$	16
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	(447	)	$	(561	)	$	(139	)	$	(117	)	$	164		$	(38	)	$	(29	)	$	37		$	(17	)	$	(15	)	$	(12	)	$	4

Schedule of weighted average assumptions used to determine the benefit obligations

	Pension						Postretirement
	U.S. Plans			Non-U.S. Plans(a)			U.S. Plans			Non-U.S. Plans(a)
December 31, 2012
Discount rate		3.93	%		2.62	%		3.67	%		3.45	%
Rate of compensation increase		4.00	%		2.86	%		N/A			3.55	%
December 31, 2011
Discount rate		4.62	%		3.02	%		4.51	%		4.19	%
Rate of compensation increase		4.00	%		2.94	%		N/A			3.61	%

(a)     The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such benefits.

Schedule of weighted average assumptions used to determine the net periodic benefit costs

	Pension						Postretirement
At December 31,	U.S. Plans			Non-U.S. Plans(a)			U.S. Plans			Non-U.S. Plans(a)
2012
Discount rate		4.62	%		3.02	%		4.51	%		4.19	%
Rate of compensation increase		4.00	%		2.94	%		N/A			3.61	%
Expected return on assets		7.25	%		2.91	%		N/A			N/A
2011
Discount rate		5.50	%		2.25	%		5.25	%		4.00	%
Rate of compensation increase		4.00	%		3.00	%		N/A			3.00	%
Expected return on assets		7.50	%		3.14	%		N/A			N/A
2010
Discount rate		6.00	%		2.75	%		5.75	%		3.75	%
Rate of compensation increase		4.00	%		3.50	%		N/A			3.75	%
Expected return on assets		7.75	%		3.75	%		N/A			N/A

(a)     The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of the subsidiaries providing such benefits.

Schedule of plan assets based on the level within the fair value hierarchy in which the fair value measurement falls

	U.S. Plans								Non-U.S. Plans
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
At December 31, 2012
Assets:
Cash & cash equivalents	$	229	$	–	$	–	$	229	$	113	$	–	$	–	$	113
Equity securities:
U.S.(a)		1,331		15		–		1,346		21		1		–		22
International(b)		290		18		–		308		240		–		–		240
Fixed maturity securities:
U.S. investment grade(c)		–		763		11		774		–		–		–		–
International investment grade(c)		–		112		–		112		–		169		–		169
U.S. and international high yield(d)		–		134		–		134		–		96		–		96
Mortgage and other asset-backed securities(e)		–		59		–		59		–		–		–		–
Other fixed maturity securities		–		–		–		–		–		17		27		44
Other investment types:
Hedge funds(f)		–		334		–		334		–		–		–		–
Commodities		–		170		–		170		–		–		–		–
Private equity(g)		–		–		225		225		–		–		–		–
Insurance contracts		–		29		–		29		–		–		43		43
Total	$	1,850	$	1,634	$	236	$	3,720	$	374	$	283	$	70	$	727
At December 31, 2011
Assets:
Cash & cash equivalents	$	9	$	–	$	–	$	9	$	114	$	–	$	–	$	114
Equity securities:
U.S.(a)		1,449		13		–		1,462		19		–		–		19
International(b)		305		16		–		321		242		1		–		243
Fixed maturity securities:
U.S. investment grade(c)		–		794		1		795		–		–		–		–
International investment grade(c)		–		–		–		–		–		139		–		139
U.S. and international high yield(d)		–		104		–		104		–		88		–		88
Mortgage and other asset-backed securities(e)		–		80		36		116		–		–		–		–
Other fixed maturity securities		–		–		–		–		–		40		1		41
Other investment types:
Hedge funds(f)		–		345		–		345		–		–		–		–
Commodities		–		26		–		26		–		–		–		–
Private equity(g)		–		–		223		223		–		–		–		–
Insurance contracts		–		31		–		31		–		–		39		39
Total	$	1,763	$	1,409	$	260	$	3,432	$	375	$	268	$	40	$	683

(a)     Includes index funds that primarily track several indices including S&P 500 and S&P Small Cap 600 in addition to other actively managed accounts comprised of investments in large cap companies.

(b)     Includes investments in companies in emerging and developed markets.

(c)     Represents investments in U.S. and non-U.S. government issued bonds, U.S. government agency or sponsored agency bonds, and investment grade corporate bonds.

(d)     Consists primarily of investments in securities or debt obligations that have a rating below investment grade.

(e)     Comprised primarily of investments in U.S. government agency or U.S. government sponsored agency bonds.

(f)      Includes funds comprised of macro, event driven, long/short equity, and controlled risk hedge fund strategies and a separately managed controlled risk strategy.

(g)     Includes funds that are diverse by geography, investment strategy, and sector.

Schedule of changes in Level 3 plan assets measured at fair value

At December 31, 2012 (in millions)	Balance Beginning of year		Net Realized and Unrealized Gains (Losses)		Purchases		Sales			Issuances		Settlements			Transfers In		Transfers Out			Balance at End of year		Changes in Unrealized Gains (Losses) on Instruments Held at End of year
U.S. Plan Assets:
Fixed maturity
U.S. investment grade	$	1	$	5	$	9	$	(29	)	$	–	$	(10	)	$	36	$	(1	)	$	11	$	1
Mortgage and other asset-backed securities		36		–		–		–			–		–			–		(36	)		–		–
Private equity		223		9		23		(26	)		–		–			4		(8	)		225		(14	)
Total	$	260	$	14	$	32	$	(55	)	$	–	$	(10	)	$	40	$	(45	)	$	236	$	(13	)
Non-U.S. Plan Assets:
Other fixed maturity securities	$	1	$	–	$	–	$	(1	)	$	–	$	–		$	27	$	–		$	27	$	–
Insurance contracts		39		2		2		–			–		–			–		–			43		–
Total	$	40	$	2	$	2	$	(1	)	$	–	$	–		$	27	$	–		$	70	$	–

At December 31, 2011 (in millions)	Balance Beginning of year		Net Realized and Unrealized Gains (Losses)		Purchases		Sales			Issuances		Settlements			Transfers In		Transfers Out			Balance at End of year		Changes in Unrealized Gains (Losses) on Instruments Held at End of year
U.S. Plan Assets:
Fixed maturity
U.S. investment grade	$	1	$	–	$	–	$	–		$	–	$	–		$	–	$	–		$	1	$	–
U.S. and international high yield		–		–		–		–			–		(1	)		1		–			–		1
Mortgage and other asset-backed securities		80		1		34		(79	)		–		(1	)		4		(3	)		36		13
Equities – U.S.		–		–		–		–			–		–			–		–			–		–
Private equity		209		5		30		(20	)		–		(1	)		–		–			223		(23	)
Total	$	290	$	6	$	64	$	(99	)	$	–	$	(3	)	$	5	$	(3	)	$	260	$	(9	)
Non-U.S. Plan Assets:
Other fixed maturity securities	$	–	$	–	$	1	$	–		$	–	$	–		$	–	$	–		$	1	$	–
Private equity		–		–		–		–			–		–			–		–			–		–
Insurance contracts		34		3		2		–			–		–			–		–			39		–
Total	$	34	$	3	$	3	$	–		$	–	$	–		$	–	$	–		$	40	$	–

Schedule of expected future benefit payments, net of participants' contributions

	Pension				Postretirement
(in millions)	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans
2013	$	312	$	48	$	16	$	1
2014		322		44		17		1
2015		328		44		18		1
2016		336		47		18		1
2017		351		51		19		1
2018 - 2022		1,830		287		107		10

Pensions

DEFINED BENEFIT PLAN DISCLOSURE

Schedule of accumulated benefit obligations

At December 31, (in millions)	2012		2011
U.S. pension benefit plans	$	4,827	$	4,291
Non-U.S. pension benefit plans	$	1,125	$	895

Schedule of projected benefit obligation in excess of the plan assets and the accumulated benefit obligation in excess of the plan assets

	PBO Exceeds Fair Value of Plan Assets								ABO Exceeds Fair Value of Plan Assets
	U.S. Plans				Non-U.S. Plans				U.S. Plans				Non-U.S. Plans
At December 31, (in millions)
	2012		2011		2012		2011		2012		2011		2012		2011
Projected benefit obligation	$	5,161	$	4,438	$	1,028	$	956	$	5,161	$	4,438	$	1,018	$	916
Accumulated benefit obligation		4,827		4,291		964		895		4,827		4,291		959		864
Fair value of plan assets		3,720		3,432		485		422		3,720		3,432		478		388

U.S. Pension Plans

DEFINED BENEFIT PLAN DISCLOSURE

Schedule of asset allocation percentage by major asset class and target allocation

At December 31,	Target 2013			Actual 2012			Actual 2011
Asset class:
Equity securities		45	%		44	%		52	%
Fixed maturity securities		30	%		29	%		30	%
Other investments		25	%		27	%		18	%
Total		100	%		100	%		100	%

Non U.S. Pension Plans

DEFINED BENEFIT PLAN DISCLOSURE

Schedule of asset allocation percentage by major asset class and target allocation

At December 31,	Target 2013			Actual 2012			Actual 2011
Asset class:
Equity securities		28	%		36	%		38	%
Fixed maturity securities		43	%		43	%		39	%
Other investments		28	%		6	%		6	%
Cash and cash equivalents		1	%		15	%		17	%
Total		100	%		100	%		100	%

Postretirement Plans

DEFINED BENEFIT PLAN DISCLOSURE

Schedule of A one percent point change in the assumed healthcare cost trend rate

	One Percent Increase				One Percent Decrease
At December 31, (in millions)
	2012		2011		2012			2011
U.S. plans	$	5	$	3	$	(4	)	$	(3	)
Non-U.S. plans	$	15	$	11	$	(11	)	$	(8	)

U.S. Postretirement Plans

DEFINED BENEFIT PLAN DISCLOSURE

Schedule of assumed health care cost trend rates

At December 31,	2012			2011
Following year:
Medical (before age 65)		7.39	%		7.59	%
Medical (age 65 and older)		6.82	%		6.88	%
Ultimate rate to which cost increase is assumed to decline		4.50	%		4.50	%
Year in which the ultimate trend rate is reached:
Medical (before age 65)		2027			2027
Medical (age 65 and older)		2027			2027