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EMPLOYEE BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2013
DEFINED BENEFIT PLAN DISCLOSURE  
Schedule of funded status of the plans reconciled to the amount reported in the balance sheets

 

 

 

 
  


   
  


   
  


   
  


   
  
   
 
   Pension   Postretirement(a)  
 
   U.S. Plans(b)   Non-U.S. Plans(b)   U.S. Plans   Non-U.S. Plans  
As of or for the Years Ended December 31,
(in millions)
  
 

2013

   2012
  

2013

   2012
  

2013

   2012
  

2013

   2012
  
   

Change in projected benefit obligation:

  
 
 
 
      
 
 
 
      
 
 
 
      
 
 
 
      

Benefit obligation, beginning of year

  
$
5,161
 
 $ 4,438  
$
1,205
 
 $ 1,137  
$
255
 
 $ 236  
$
66
 
 $ 52  

Service cost

  
 
205
 
   154  
 
47
 
   53  
 
5
 
   5  
 
3
 
   3  

Interest cost

  
 
201
 
   200  
 
29
 
   34  
 
8
 
   11  
 
2
 
   2  

Actuarial (gain) loss

  
 
(454
)
   536  
 
13
 
   69  
 
(41
)
   22  
 
(15
)
   11  

Benefits paid:

  
 
 
 
      
 
 
 
      
 
 
 
      
 
 
 
      

AIG assets

  
 
(14
)
   (12 )
 
(13
)
   (7 )
 
(10
)
   (11 )
 
(1
)
   (1 )

Plan assets

  
 
(217
)
   (150 )
 
(27
)
   (35 )
 
–
 
   –  
 
–
 
   –  

Plan amendment

  
 
–
 
   –  
 
–
 
   4  
 
–
 
   (8 )
 
–
 
   –  

Curtailments

  
 
–
 
   (5 )
 
(1
)
   (3 )
 
–
 
   –  
 
(3
)
   (1 )

Settlements

  
 
–
 
   –  
 
(35
)
   (20 )
 
–
 
   –  
 
–
 
   –  

Foreign exchange effect

  
 
–
 
   –  
 
(126
)
   (32 )
 
–
 
   –  
 
(1
)
   –  

Other

  
 
–
 
   –  
 
(20
)
   5  
 
–
 
   –  
 
1
 
   –
   

Projected benefit obligation, end of year

  
$
4,882
 
 $ 5,161  
$
1,072
 
 $ 1,205  
$
217
 
 $ 255  
$
52
 
 $ 66
   

Change in plan assets:

  
 
 
 
      
 
 
 
      
 
 
 
      
 
 
 
      

Fair value of plan assets, beginning of year

  
$
3,720
 
 $ 3,432  
$
727
 
 $ 683  
$
–
 
 $ –  
$
–
 
 $ –  

Actual return on plan assets, net of expenses

  
 
520
 
   438  
 
92
 
   34  
 
–
 
   –  
 
–
 
   –  

AIG contributions

  
 
15
 
   12  
 
87
 
   86  
 
10
 
   11  
 
1
 
   1  

Benefits paid:

  
 
 
 
      
 
 
 
      
 
 
 
      
 
 
 
      

AIG assets

  
 
(14
)
   (12 )
 
(13
)
   (7 )
 
(10
)
   (11 )
 
(1
)
   (1 )

Plan assets

  
 
(217
)
   (150 )
 
(27
)
   (35 )
 
–
 
   –  
 
–
 
   –  

Settlements

  
 
–
 
   –  
 
(35
)
   (20 )
 
–
 
   –  
 
–
 
   –  

Foreign exchange effect

  
 
–
 
   –  
 
(93
)
   (15 )
 
–
 
   –  
 
–
 
   –  

Other

  
 
–
 
   –  
 
–
 
   1  
 
–
 
   –  
 
–
 
   –
   

Fair value of plan assets, end of year

  
$
4,024
 
 $ 3,720  
$
738
 
 $ 727  
$
–
 
 $ –  
$
–
 
 $ –
   

Funded status, end of year

  
$
(858
)
 $ (1,441 )
$
(334
)
 $ (478 )
$
(217
)
 $ (255 )
$
(52
)
 $ (66 )
   

Amounts recognized in the consolidated balance sheet:

  
 
 
 
      
 
 
 
      
 
 
 
      
 
 
 
    
   

Assets

  
$
–
 
 $ –  
$
91
 
 $ 65  
$
–
 
 $ –  
$
–
 
 $ –
   

Liabilities

  
 
(858
)
   (1,441 )
 
(425
)
   (543 )
 
(217
)
   (255 )
 
(52
)
   (66 )
   

Total amounts recognized

  
$
(858
)
 $ (1,441 )
$
(334
)
 $ (478 )
$
(217
)
 $ (255 )
$
(52
)
 $ (66 )
   

Pre-tax amounts recognized in Accumulated other comprehensive income:

  
 
 
 
      
 
 
 
      
 
 
 
      
 
 
 
    
   

Net gain (loss)

  
$
(908
)
   (1,764 )
$
(204
)
 $ (302 )
$
1
 
 $ (40 )
$
3
 
 $ (13 )
   

Prior service (cost) credit

  
 
234
 
   267  
 
14
 
   21  
 
35
 
   46  
 
1
 
   1
   

Total amounts recognized

  
$
(674
)
 $ (1,497 )
$
(190
)
 $ (281 )
$
36
 
 $ 6  
$
4
 
 $ (12 )
   

(a)  We do not currently fund postretirement benefits.

(b)  Includes non-qualified unfunded plans of which the aggregate projected benefit obligation was $276 million and $238 million for the U.S. and $265 million and $299 million for the non-U.S. at December 31, 2013 and 2012, respectively.
Schedule of components of net periodic benefit cost

 

 

 

 
  


   
    
  


   
    
  


   
    
  


   
    
  
   
 
   Pension   Postretirement  
 
   U.S. Plans   Non-U.S. Plans   U.S. Plans   Non-U.S. Plans  
(in millions)
  

2013

   2012
   2011
  

2013

   2012
   2011
  

2013

   2012
   2011
  

2013

   2012
   2011
  
   

Components of net periodic benefit cost:

  
 
 
 
            
 
 
 
            
 
 
 
            
 
 
 
            

Service cost

  
$
205
 
 $ 154   $ 150  
$
47
 
 $ 53   $ 66  
$
5
 
 $ 5   $ 8  
$
3
 
 $ 3   $ 4  

Interest cost

  
 
201
 
   200     207  
 
29
 
   34     37  
 
8
 
   11     13  
 
2
 
   2     2  

Expected return on assets

  
 
(257
)
   (240 )   (250 )
 
(19
)
   (20 )   (25 )
 
–
 
   –     –  
 
–
 
   –     –  

Amortization of prior service credit

  
 
(33
)
   (33 )   (7 )
 
(3
)
   (4 )   (4 )
 
(11
)
   (10 )   (2 )
 
–
 
   –     –  

Amortization of net loss

  
 
138
 
   118     65  
 
13
 
   13     15  
 
1
 
   –     –  
 
–
 
   –     –  

Curtailment (gain) loss

  
 
–
 
   (2 )   –  
 
(1
)
   1     –  
 
–
 
   –     –  
 
(2
)
   (1 )   –  

Settlement loss

  
 
–
 
   –     –  
 
5
 
   4     8  
 
–
 
   –     –  
 
–
 
   –     –  

Other

  
 
–
 
   –     –  
 
1
 
   –     –  
 
–
 
   –     –  
 
–
 
   –     –
   

Net periodic benefit cost

  
$
254
 
 $ 197   $ 165  
$
72
 
 $ 81   $ 97  
$
3
 
 $ 6   $ 19  
$
3
 
 $ 4   $ 6
   

Total recognized in Accumulated other comprehensive income (loss)

  
$
823
 
 $ (250 ) $ (396 )
$
103
 
 $ (36 ) $ 261  
$
30
 
 $ (23 ) $ 56  
$
16
 
 $ (11 ) $ (6 )
   

Total recognized in net periodic benefit cost and other comprehensive income (loss)

  
$
569
 
 $ (447 ) $ (561 )
$
31
 
 $ (117 ) $ 164  
$
27
 
 $ (29 ) $ 37  
$
13
 
 $ (15 ) $ (12 )
   
Schedule of weighted average assumptions used to determine the benefit obligations

 

 

 

   
 
   Pension   Postretirement  
 
   U.S. Plans
   Non-U.S. Plans*
   U.S. Plans
   Non-U.S. Plans*
  
   

December 31, 2013

                          

Discount rate

     4.83 %   2.77 %   4.59 %   4.77 %

Rate of compensation increase

     3.50 %   2.89 %   N/A     3.34 %
   

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 %
   

*     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*
   U.S. Plans
   Non-U.S. Plans*
  
   

2013

                          

Discount rate

     3.93 %   2.62 %   3.67 %   3.45 %

Rate of compensation increase

     4.00 %   2.86 %   N/A     3.55 %

Expected return on assets

     7.25 %   2.60 %   N/A     N/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
   

*     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, 2013

                                                  

Assets:

                                                  

Cash and cash equivalents

   $ 137   $ –   $ –   $ 137   $ 92   $ –   $ –   $ 92  

Equity securities:

                                                  

U.S.(a)

     1,840     220     –     2,060     26     –     –     26  

International(b)

     189     18     –     207     254     47     –     301  

Fixed maturity securities:

                                                  

U.S. investment grade(c)

     –     702     9     711     –     –     –     –  

International investment grade(c)

     –     –     –     –     1     163     –     164  

U.S. and international high yield(d)

     –     281     –     281     –     82     –     82  

Mortgage and other asset-backed securities(e)

     –     7     –     7     –     –     –     –  

Other fixed maturity securities

     –     –     –     –     –     10     19     29  

Other investment types:

                                                  

Hedge funds(f)

     –     297     35     332     –     –     –     –  

Futures

     14     –     –     14     –     –     –     –  

Private equity(g)

     –     –     248     248     –     –     –     –  

Insurance contracts

     –     27     –     27     –     –     44     44
   

Total

   $ 2,180   $ 1,552   $ 292   $ 4,024   $ 373   $ 302   $ 63   $ 738
   

At December 31, 2012

                                                  

Assets:

                                                  

Cash and cash equivalents

   $ 229   $ –   $ –   $ 229   $ 113   $ –   $ –   $ 113  

Equity securities:

                                                  

U.S.(a)

     1,597     31     –     1,628     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)

     –     –     –     –     –     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     –     –     –     –  

Private equity(g)

     –     –     225     225     –     –     –     –  

Insurance contracts

     –     29     –     29     –     –     43     43
   

Total

   $ 2,116   $ 1,368   $ 236   $ 3,720   $ 374   $ 283   $ 70   $ 727
   

(a)  Includes index funds that primarily track several indices including S&P 500 and S&P Small Cap 600 as well as other actively managed accounts composed 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 composed 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, sector and vintage year.
Schedule of changes in Level 3 plan assets measured at fair value

 

 

   
At December 31, 2013
(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 securities

                                                              

U.S. investment grade

   $ 11   $ (2 ) $ 2   $ (2 ) $ –   $ –   $ –   $ –   $ 9   $ (3 )

Hedge funds

     –     –     –     –     –     –     35     –     35     –  

Private equity

     225     7     44     (26 )   –     (2 )   –     –     248     (14 )
   

Total

   $ 236   $ 5   $ 46   $ (28 ) $ –   $ (2 ) $ 35   $ –   $ 292   $ (17 )
   

Non-U.S. Plan Assets:

                                                              

Other fixed maturity securities

   $ 27   $ 1   $ –   $ (8 ) $ –   $ –   $ –   $ (1 ) $ 19   $ –  

Insurance contracts

     43     3     1     (1 )   –     –     –     (2 )   44     –
   

Total

   $ 70   $ 4   $ 1   $ (9 ) $ –   $ –   $ –   $ (3 ) $ 63   $ –
   


 

 

   
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 securities

                                                              

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   $ –
   
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
  
   

2014

   $ 311   $ 41   $ 15   $ 1  

2015

     320     40     16     1  

2016

     330     40     16     1  

2017

     348     44     17     2  

2018

     350     49     18     2  

2019 – 2023

     1,871     260     99     11
   

 
Pensions
  
DEFINED BENEFIT PLAN DISCLOSURE  
Schedule of accumulated benefit obligations

 

 

 
  


   
  
   
At December 31,
(in millions)
  

2013

   2012
  
   

U.S. pension benefit plans

  
$
4,683
$ 4,827  

Non-U.S. pension benefit plans

  
$
1,000
$ 1,125
   
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)
  
 

2013

   2012
  

2013

   2012
  

2013

   2012
  

2013

   2012
  
   

Projected benefit obligation

  
$
4,882
 
 $ 5,161  
$
806
 
 $ 1,028  
$
4,882
 
 $ 5,161  
$
752
 
 $ 1,018  

Accumulated benefit obligation

  
 
4,683
 
   4,827  
 
704
 
   964  
 
4,683
 
   4,827  
 
703
 
   959  

Fair value of plan assets

  
 
4,024
 
   3,720  
 
330
 
   485  
 
4,024
 
   3,720  
 
327
 
   478
   
U.S. Pension Plans
  
DEFINED BENEFIT PLAN DISCLOSURE  
Schedule of asset allocation percentage by major asset class and target allocation

 

 

 
    
  


   
  
   
At December 31,
   Target
2014
  

Actual
2013

   Actual
2012
  
   

Asset class:

        
 
 
 
      

Equity securities

     43 %
 
56
%
   52 %

Fixed maturity securities

     28 %
 
25
%
   26 %

Other investments

     29 %
 
19
%
   22 %
   

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
2014
  

Actual
2013

   Actual
2012
  
   

Asset class:

        
 
 
 
      

Equity securities

     34 %
 
45
%
   36 %

Fixed maturity securities

     44 %
 
37
%
   43 %

Other investments

     11 %
 
6
%
   6 %

Cash and cash equivalents

     11 %
 
12
%
   15 %
   

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)
  
 

2013

   2012
  

2013

   2012
  
   

U.S. plans

  
$
6
 
 $ 5  
$
(3
)
 $ (4 )

Non-U.S. plans

  
$
11
 
 $ 15  
$
(7
)
 $ (11 )
   
U.S. Postretirement Plans
  
DEFINED BENEFIT PLAN DISCLOSURE  
Schedule of assumed health care cost trend rates

 

 

 

 
  


   
  
   
At December 31,
  

2013

   2012
  
   

Following year:

  
 
 
 
      

Medical (before age 65)

  
 
7.21
%
   7.39 %

Medical (age 65 and older)

  
 
6.80
%
   6.82 %
   

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