XML 134 R41.htm IDEA: XBRL DOCUMENT v2.4.0.6
Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]  
Funded status
The following table provides a reconciliation of benefit obligations and plan assets for the years ended December 31, 2011 and 2010.
Funded Status
 
Pension Benefits
 
Postretirement Benefits
(In millions)
2011
 
2010
 
2011
 
2010
Benefit obligation at January 1
$
2,798

 
$
2,702

 
$
95

 
$
155

Changes in benefit obligation:
 
 
 
 
 
 
 
Service cost
13

 
16

 
1

 
1

Interest cost
146

 
149

 
3

 
7

Participants' contributions
—

 
—

 
6

 
6

Plan amendments
—

 
—

 
(12
)
 
(60
)
Actuarial (gain) loss
263

 
89

 
(18
)
 
(2
)
Benefits paid
(163
)
 
(157
)
 
(13
)
 
(13
)
Foreign currency translation and other
—

 
(1
)
 
—

 
1

Reduction of benefit obligations due to disposition of subsidiary
(54
)
 
—

 
(13
)
 
—

Benefit obligations at December 31
3,003

 
2,798


49


95

Fair value of plan assets at January 1
2,258

 
2,117

 
—

 
—

Change in plan assets:
 
 
 
 
 
 
 
Actual return on plan assets
82

 
234

 
—

 
—

Company contributions
89

 
65

 
7

 
7

Participants' contributions
—

 
—

 
6

 
6

Benefits paid
(163
)
 
(157
)
 
(13
)
 
(13
)
Foreign currency translation and other
—

 
(1
)
 
—

 
—

Reduction of plan assets due to disposition of subsidiary
(54
)
 
—

 
—

 
—

Fair value of plan assets at December 31
2,212

 
2,258

 
—

 
—

Funded status
$
(791
)
 
$
(540
)
 
$
(49
)
 
$
(95
)
Amounts recognized on the Consolidated Balance Sheets at December 31:
 
 
 
 
 
 
 
Other assets
$
1

 
$
7

 
$
—

 
$
—

Other liabilities
(792
)
 
(547
)
 
(49
)
 
(95
)
Net amount recognized
$
(791
)
 
$
(540
)
 
$
(49
)
 
$
(95
)
Amounts recognized in Accumulated other comprehensive income, not yet recognized in net periodic cost (benefit):
 
 
 
 
 
 
 
Prior service credit
$
—

 
$
—

 
$
(134
)
 
$
(141
)
Net actuarial loss
1,060

 
741

 
9

 
29

Net amount recognized
$
1,060

 
$
741

 
$
(125
)
 
$
(112
)
Components of net periodic cost (benefit)
Net Periodic Cost (Benefit)
Years ended December 31
 
 
 
 
 
 
(In millions)
 
2011
 
2010
 
2009
Pension cost
 
 
 
 
 
 
Service cost
 
$
13

 
$
16

 
$
17

Interest cost on projected benefit obligation
 
146

 
149

 
153

Expected return on plan assets
 
(172
)
 
(162
)
 
(145
)
Amortization of net actuarial loss
 
25

 
24

 
25

Net periodic pension cost
 
$
12

 
$
27

 
$
50

 
 
 
 
 
 
 
Postretirement benefit
 
 
 
 
 
 
Service cost
 
$
1

 
$
1

 
$
1

Interest cost on projected benefit obligation
 
3

 
7

 
9

Amortization of prior service credit
 
(19
)
 
(16
)
 
(16
)
Amortization of net actuarial loss
 
—

 
1

 
1

Net periodic postretirement benefit
 
$
(15
)
 
$
(7
)
 
$
(5
)
Schedule of amounts recognized in Other comprehensive income
The amounts recognized in Other comprehensive income are presented in the following table.
Years ended December 31
 
 
 
 
 
 
(In millions)
 
2011
 
2010
 
2009
Pension and postretirement benefits
 
 
 
 
 
 
Amounts arising during the period
 
$
(325
)
 
$
44

 
$
13

Reclassification adjustment relating to prior service credit
 
(19
)
 
(16
)
 
(16
)
Reclassification adjustment relating to actuarial loss
 
25

 
25

 
26

Total increase (decrease) in Other comprehensive income
 
$
(319
)
 
$
53

 
$
23
Schedule of estimated amounts to be recognized from Accumulated other comprehensive income into net periodic cost (benefit) during 2012
The table below presents the estimated amounts to be recognized from Accumulated other comprehensive income into net periodic cost (benefit) during 2012.
(In millions)
 
Pension
Benefits
 
Postretirement Benefits
Amortization of prior service credit
 
$
—

 
$
(18
)
Amortization of net actuarial loss
 
39

 
1

Total estimated amounts to be recognized
 
$
39

 
$
(17
)
Actuarial assumptions for benefit obligations and for net cost or benefit
Actuarial assumptions used for the CNA Retirement Plan and CNA Health and Group Benefits Program to determine benefit obligations are set forth in the following table.
Actuarial Assumptions for Benefit Obligations
December 31
 
2011
 
2010
Pension benefits
 
 
 
 
Discount rate
 
4.600
%
 
5.375
%
Expected long term rate of return
 
8.000

 
8.000

Rate of compensation increases
 
4.125

 
5.030

Postretirement benefits
 
 
 
 
Discount rate
 
3.750
%
 
4.375
%
Actuarial assumptions used for the CNA Retirement Plan and CNA Health and Group Benefits Program to determine net cost or benefit are set forth in the following table.
Actuarial Assumptions for Net Cost or Benefit
Years ended December 31
 
2011
 
2010
 
2009
Pension benefits
 
 
 
 
 
 
Discount rate
 
5.375
%
 
5.700
%
 
6.300
%
Expected long term rate of return
 
8.000

 
8.000

 
8.000

Rate of compensation increases
 
5.030

 
5.030

 
5.830

Postretirement benefits
 
 
 
 
 
 
Discount rate
 
4.375
%
 
4.875 / 5.500%

 
6.300
%
Fair value of plan assets measured on a recurring basis
Pension plan assets measured at fair value on a recurring basis are summarized below.
December 31, 2011
 
 
 
 
 
 
 
 
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Total assets
at fair value
Assets
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
Corporate and other bonds
 
$
—

 
$
377

 
$
10

 
$
387

States, municipalities and political subdivisions
 
—

 
104

 
—

 
104

Asset-backed:
 
 
 
 
 
 
 
 
Residential mortgage-backed
 
—

 
198

 
—

 
198

Commercial mortgage-backed
 
—

 
68

 
—

 
68

Other asset-backed
 
—

 
10

 
—

 
10

Total asset-backed
 
—

 
276

 
—

 
276

Total fixed maturity securities
 
—

 
757

 
10

 
767

Equity securities
 
353

 
75

 
5

 
433

Short term investments
 
63

 
35

 
—

 
98

Limited partnerships:
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
488

 
330

 
818

Private equity
 
—

 
—

 
65

 
65

Total limited partnerships
 
—

 
488

 
395

 
883

Other assets
 
—

 
21

 
—

 
21

Investment contracts with insurance company
 
—

 
—

 
10

 
10

Total assets
 
$
416

 
$
1,376

 
$
420

 
$
2,212


December 31, 2010
 
 
 
 
 
 
 
 
(In millions)
 
Level 1
 
Level 2
 
Level 3
 
Total assets
at fair value
Assets
 
 
 
 
 
 
 
 
Fixed maturity securities:
 
 
 
 
 
 
 
 
Corporate and other bonds
 
$
—

 
$
305

 
$
10

 
$
315

States, municipalities and political subdivisions
 
—

 
92

 
—

 
92

Asset-backed:
 
 
 
 
 
 
 
 
Residential mortgage-backed
 
—

 
179

 
—

 
179

Commercial mortgage-backed
 
—

 
40

 
9

 
49

Other asset-backed
 
—

 
9

 
1

 
10

Total asset-backed
 
—

 
228

 
10

 
238

Total fixed maturity securities
 
—

 
625

 
20

 
645

Equity securities
 
421

 
77

 
6

 
504

Short term investments
 
106

 
7

 
—

 
113

Limited partnerships:
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
518

 
394

 
912

Private equity
 
—

 
—

 
59

 
59

Total limited partnerships
 
—

 
518

 
453

 
971

Derivatives
 
1

 
—

 
—

 
1

Other assets
 
—

 
15

 
—

 
15

Investment contracts with insurance company
 
—

 
—

 
9

 
9

Total assets
 
$
528

 
$
1,242

 
$
488

 
$
2,258
Reconciliation of level 3 plan assets
The tables below present a reconciliation for all pension plan assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2011 and 2010.
Level 3
(In millions)
Balance at January 1, 2011
 
Actual return on assets still held at December 31, 2011
 
Actual return on assets sold during the year ended December 31, 2011
 
Purchases, sales, and settlements
 
Net transfers into (out of) Level 3
 
Balance at December 31, 2011
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
10

 
$
—

 
$
—

 
$
—

 
$
—

 
$
10

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgage-backed
9

 
—

 
—

 
(9
)
 
—

 
—

Other asset-backed
1

 
—

 
—

 
(1
)
 
—

 
—

Total asset-backed
10

 
—

 
—

 
(10
)
 
—

 
—

Total fixed maturity securities
20

 
—

 
—

 
(10
)
 
—

 
10

Equity securities
6

 
(1
)
 
—

 
—

 
—

 
5

Limited partnerships:
 
 
 
 
 
 
 
 
 
 
 
Hedge funds
394

 
5

 
5

 
(74
)
 
—

 
330

Private equity
59

 
9

 
—

 
(3
)
 
—

 
65

Total limited partnerships
453

 
14

 
5

 
(77
)
 
—

 
395

Investment contracts with insurance company
9

 
1

 
—

 
—

 
—

 
10

Total
$
488

 
$
14

 
$
5

 
$
(87
)
 
$
—

 
$
420


Level 3
(In millions)
Balance at January 1, 2010
 
Actual return on assets still held at December 31, 2010
 
Actual return on assets sold during the year ended December 31, 2010
 
Purchases, sales, and settlements
 
Net transfers into (out of) Level 3
 
Balance at December 31, 2010
Fixed maturity securities:
 
 
 
 
 
 
 
 
 
 
 
Corporate and other bonds
$
—

 
$
—

 
$
—

 
$
10

 
$
—

 
$
10

Asset-backed:
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
52

 
—

 
6

 
(58
)
 
—

 
—

Commercial mortgage-backed
—

 
—

 
—

 
9

 
—

 
9

Other asset-backed
5

 
—

 
—

 
(4
)
 
—

 
1

Total asset-backed
57

 
—

 
6

 
(53
)
 
—

 
10

Total fixed maturity securities
57

 
—

 
6

 
(43
)
 
—

 
20

Equity securities
5

 
1

 
—

 
—

 
—

 
6

Limited partnerships:
 
 
 
 
 
 
 
 
 
 
 
Hedge funds
339

 
64

 
—

 
(9
)
 
—

 
394

Private equity
57

 
6

 
—

 
(4
)
 
—

 
59

Total limited partnerships
396

 
70

 
—

 
(13
)
 
—

 
453

Investment contracts with insurance company
9

 
—

 
—

 
—

 
—

 
9

Total
$
467

 
$
71

 
$
6

 
$
(56
)
 
$
—

 
$
488
Estimated future minimum benefit payments to participants
Estimated Future Minimum Benefit Payments to Participants
(In millions)
Pension Benefits
 
Postretirement Benefits
2012
$
176

 
$
6

2013
181

 
6

2014
184

 
5

2015
188

 
5

2016
191

 
5

2017-2021
1,002

 
18
Significant assumptions used to estimate fair value of stock options and SARS
The following table presents the significant assumptions used to estimate the fair value of granted stock options and SARs for the years ended December 31, 2011, 2010 and 2009.
Years ended December 31
 
2011
 
2010
 
2009
Weighted average expected life of the securities granted (in years)
 
5.61

 
5.61

 
4.84

Estimate of the underlying common stock's volatility
 
39.88
%
 
39.58
%
 
39.95
%
Expected dividend yield
 
1.5
%
 
—
%
 
—
%
Risk free interest rate
 
2.2
%
 
2.6
%
 
2.0
%
Stock option and SARS activity
The following table presents activity for stock options and SARs under the Plan in 2011.
 
 
Number of Awards
 
Weighted-Average Exercise Price per Award
 
Aggregate Intrinsic Value
 
Weighted-Average Remaining Contractual Term (in years)
Outstanding at January 1, 2011
 
1,625,175

 
$
27.42

 
 
 
 
Awards granted
 
125,000

 
27.12

 
 
 
 
Awards exercised
 
(166,375
)
 
27.13

 
 
 
 
Awards forfeited, canceled or expired
 
(264,450
)
 
34.51

 
 
 
 
Outstanding at December 31, 2011
 
1,319,350

 
$
26.01

 
$
5
 million
 
5.80
Outstanding, fully vested and expected to vest
 
1,260,045

 
$
26.14

 
$
5
 million
 
5.69
Outstanding, exercisable
 
872,600

 
$
28.04

 
$
2
 million
 
4.79
Weighted-average grant date fair value for awards granted, total intrinsic value for awards exercised and total fair value for awards vested
The following table presents weighted-average grant date fair value for awards granted, total intrinsic value for awards exercised and total fair value for awards vested for the years ended December 31, 2011, 2010 and 2009.
Years ended December 31
 
2011
 
2010
 
2009
Weighted-average grant date fair value
 
$
9.38

 
$
10.49

 
$
4.69

Total intrinsic value of awards exercised
 
$
481
 thousand
 
$
350
 thousand
 
$
—

Fair value of awards vested
 
$
2
 million
 
$
2
 million
 
$
4
 million
Restricted shares, performance-based restricted stock units and performance share unit activity
The following table presents activity for restricted shares, performance-based RSUs and performance share units under the Plan in 2011.
 
Number of Awards
 
Weighted-Average Grant Date Fair Value
Balance at January 1, 2011
493,507

 
$
20.30

Awards granted
274,333

 
27.23

Awards vested
(114,130
)
 
17.95

Awards forfeited, canceled or expired
(6,880
)
 
26.24

Performance-based adjustment
(7,408
)
 
27.11

Balance at December 31, 2011
639,422

 
$
23.55