ALLSTATE CORP | 2013 | FY | 3

($ in millions)
   2013   2012   2011  

Interest expense recognized by ESOP

   $ 2   $ 2   $ 2  

Less: dividends accrued on ESOP shares

     (3 )   (2 )   (2 )

Cost of shares allocated

     7     2     2  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Compensation expense

     6     2     2  

Reduction of defined contribution due to ESOP

     46     10     9  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

ESOP benefit

   $ (40 ) $ (8 ) $ (7 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

all:ScheduleOfESOPTableTextBlock

($ in millions)





 
   Quoted prices
in active
markets for
identical
assets
(Level 1)		   Significant
other
observable
inputs
(Level 2)		   Significant
unobservable
inputs
(Level 3)		   Balance
as of
December 31,
2013		  

Equity securities:

                          

U.S.

   $ —   $ 2,124   $ 78   $ 2,202  

International

     160     182     159     501  

Fixed income securities:

                          

U.S. government and agencies

     608     52     —     660  

Foreign government

     —     44     —     44  

Municipal

     —     —     18     18  

Corporate

     —     1,433     18     1,451  

RMBS

     —     83     —     83  

Short-term investments

     54     344     —     398  

Limited partnership interests:

                          

Real estate funds (1)

     —     —     197     197  

Private equity funds (2)

     —     —     211     211  

Hedge funds (3)

     —     —     9     9  

Cash and cash equivalents

     25     —     —     25  

Free-standing derivatives:

                          

Assets

     1     3     —     4  

Liabilities

     (1 )   —     —     (1 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total plan assets at fair value

   $ 847   $ 4,265   $ 690     5,802  
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                     

% of total plan assets at fair value

     14.6 %   73.5 %   11.9 %   100.0 %

Securities lending obligation (4)

                      
(290
)

Other net plan assets (5)

                       90  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total reported plan assets

                     $ 5,602  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         
(1)
Real estate funds held by the pension plans are primarily invested in U.S. commercial real estate.
(2)
Private equity funds held by the pension plans are primarily comprised of North American buyout funds.
(3)
Hedge funds held by the pension plans primarily comprise fund of funds investments in diversified pools of capital across funds with underlying strategies such as convertible arbitrage, equity market neutral, fixed income arbitrage, global macro, commodity trading advisors, long short equity, short biased equity, and event driven.
(4)
The securities lending obligation represents the plan's obligation to return securities lending collateral received under a securities lending program. The terms of the program allow both the plan and the counterparty the right and ability to redeem/return the securities loaned on short notice. Due to its relatively short-term nature, the outstanding balance of the obligation approximates fair value.
(5)
Other net plan assets represent interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales.

       

($ in millions)





 
   Quoted prices
in active
markets for
identical
assets
(Level 1)		   Significant
other
observable
inputs
(Level 2)		   Significant
unobservable
inputs
(Level 3)		   Balance
as of
December 31,
2012		  

Equity securities:

                          

U.S.

   $ 13   $ 2,042   $ 68   $ 2,123  

International

     136     198     246     580  

Fixed income securities:

                          

U.S. government and agencies

     799     78     —     877  

Foreign government

     —     32     —     32  

Municipal

     —     —     129     129  

Corporate

     —     994     10     1,004  

RMBS

     —     95     —     95  

Short-term investments

     56     424     —     480  

Limited partnership interests:

                          

Real estate funds

     —     —     214     214  

Private equity funds

     —     —     199     199  

Hedge funds

     —     —     80     80  

Cash and cash equivalents

     17     —     —     17  

Free-standing derivatives:

                          

Assets

     —     —     —     —  

Liabilities

     —     —     —     —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total plan assets at fair value

   $ 1,021   $ 3,863   $ 946     5,830  
                     
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                     

% of total plan assets at fair value

     17.5 %   66.3 %   16.2 %   100.0 %

Securities lending obligation

                      
(463
)

Other net plan assets

                       31  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total reported plan assets

                     $ 5,398  
                         
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                         

all:ScheduleOfFairValueOfPlanAssetsByMeasurementLevelsTableTextBlock

 
   Target asset
allocation		   Actual percentage
of plan assets		  
Asset category
   2013   2013   2012  

Equity securities

     40 - 50 %   49 %   50 %

Fixed income securities

     43 - 52     41     38  

Limited partnership interests

     12 - 18     7     9  

Short-term investments and other

     —     3     3  
                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total (1)

           100 %   100 %
                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                 
(1)
Securities lending collateral reinvestment is excluded from target and actual percentage of plan assets.

us-gaap:ScheduleOfAllocationOfPlanAssetsTableTextBlock

($ in millions)
 
   Pension
benefits		   Postretirement
benefits		  

Net actuarial loss (gain)

   $ 115   $ (22 )

Prior service credit

     (58 )   (23 )

us-gaap:ScheduleOfAmountsInAccumulatedOtherComprehensiveIncomeLossToBeRecognizedOverNextFiscalYearTableTextBlock

  Pension benefits   Postretirement benefits  
($ in millions)
   2013   2012   2011   2013   2012   2011  

Discount rate

     4.60 %   5.25 %   6.00 %   3.75 %   5.25 %   6.00 %

Rate of increase in compensation levels

     3.5     4.5     4.0-4.5     n/a     n/a     n/a  

Expected long-term rate of return on plan assets

     7.75     8.5     8.5     n/a     n/a     n/a  

       Weighted average assumptions used to determine benefit obligations as of December 31 are listed in the following table.

 
   Pension benefits   Postretirement benefits  
 
   2013   2012   2013   2012  

Discount rate

     5.00 %   4.00 %   4.85 %   4.25 %

Rate of increase in compensation levels

     3.5     3.5     n/a     n/a  

us-gaap:ScheduleOfAssumptionsUsedTableTextBlock

 

 

($ in millions)
   2013   2012  

Fair value of plan assets, beginning of year

   $ 5,398   $ 4,675  

Actual return on plan assets

     566     594  

Employer contribution

     561     439  

Benefits paid

     (892 )   (312 )

Translation adjustment and other

     (31 )   2  
           
​ ​ ​ ​ ​ ​ ​ ​

Fair value of plan assets, end of year

   $ 5,602   $ 5,398  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

us-gaap:ScheduleOfChangesInFairValueOfPlanAssetsTableTextBlock

($ in millions)
 
   Pension benefits   Postretirement
benefits		  
 
   2013   2012   2013   2012  

Benefit obligation, beginning of year

   $ 6,727   $ 5,831   $ 803   $ 716  

Service cost

     140     152     12     13  

Interest cost

     265     298     28     36  

Participant contributions

     1     1     18     20  

Actuarial (gain) loss

     (406 )   756     (32 )   76  

Benefits paid (1)

     (892 )   (312 )   (57 )   (59 )

Plan amendments

     (506 )   —     —     —  

Translation adjustment and other

     (31 )   1     (5 )   1  

Curtailment gain

     (1 )   —     (285 )   —  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Benefit obligation, end of year

   $ 5,297   $ 6,727   $ 482   $ 803  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   
(1)
Benefits paid include lump sum distributions, a portion of which may trigger settlement accounting treatment.

us-gaap:ScheduleOfChangesInProjectedBenefitObligationsTableTextBlock

 

 

($ in millions)
    
   Actual return on plan assets:    
    
    
  
 
   Balance as of
December 31,
2012		   Relating to
assets sold
during the
period		   Relating to
assets still
held at the
reporting
date		   Purchases,
sales and
settlements,
net		   Net transfers
in and/or
(out) of
Level 3		   Balance as of
December 31,
2013		  

Equity securities:

                                      

U.S.

   $ 68   $ —   $ 10   $ —   $ —   $ 78  

International

     246     3     8     (98 )   —     159  

Fixed income securities:

                                      

Municipal

     129     7     1     (119 )   —     18  

Corporate

     10     5     —     3     —     18  

Limited partnership interests:

                                      

Real estate funds

     214     —     11     (28 )   —     197  

Private equity funds

     199     —     (2 )   14     —     211  

Hedge funds

     80     —     —     (71 )   —     9  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Level 3 plan assets

   $ 946   $ 15   $ 28   $ (299 ) $ —   $ 690  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           

       

($ in millions)
    
   Actual return on plan assets:    
    
    
  
 
   Balance as of
December 31,
2011		   Relating to
assets sold
during the
period		   Relating to
assets still
held at the
reporting
date		   Purchases,
sales and
settlements,
net		   Net transfers
in and/or
(out) of
Level 3		   Balance as of
December 31,
2012		  

Equity securities:

                                      

U.S.

   $ 64   $ —   $ 7   $ (3 ) $ —   $ 68  

International

     245     —     1     —     —     246  

Fixed income securities:

                                      

Municipal

     163     5     (2 )   (37 )   —     129  

Corporate

     9     1     —     —     —     10  

Limited partnership interests:

                                      

Real estate funds

     192     16     2     4     —     214  

Private equity funds

     186     8     (6 )   11     —     199  

Hedge funds

     79     —     1     —     —     80  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Level 3 plan assets

   $ 938   $ 30   $ 3   $ (25 ) $ —   $ 946  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           

       

($ in millions)
    
   Actual return on plan assets:    
    
    
  
 
   Balance as of
December 31,
2010		   Relating to
assets sold
during the
period		   Relating to
assets still
held at the
reporting
date		   Purchases,
sales and
settlements,
net		   Net transfers
in and/or
(out) of
Level 3		   Balance as of
December 31,
2011		  

Equity securities:

                                      

U.S.

   $ 6   $ —   $ (2 ) $ 60   $ —   $ 64  

International

     253     —     (5 )   (3 )   —     245  

Fixed income securities:

                                      

Municipal

     222     —     1     (60 )   —     163  

Corporate

     10     1     —     (2 )   —     9  

RMBS

     48     (8 )   8     (30 )   (18 )   —  

Limited partnership interests:

                                      

Real estate funds

     167     (1 )   29     (3 )   —     192  

Private equity funds

     166     1     22     (3 )   —     186  

Hedge funds

     120     43     (43 )   (41 )   —     79  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Level 3 plan assets

   $ 992   $ 36   $ 10   $ (82 ) $ (18 ) $ 938  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           

us-gaap:ScheduleOfEffectOfSignificantUnobservableInputsChangesInPlanAssetsTableTextBlock

Estimated future benefit payments expected to be paid in the next 10 years, based on the assumptions used to measure the Company's benefit obligation as of December 31, 2013, are presented in the table below.

($ in millions)
 
   Pension
benefits		   Postretirement
benefits		  

2014

   $ 355   $ 35  

2015

     367     36  

2016

     390     29  

2017

     420     30  

2018

     438     32  

2019-2023

     2,481     188  
           
​ ​ ​ ​ ​ ​ ​ ​

Total benefit payments

   $ 4,451   $ 350  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

us-gaap:ScheduleOfExpectedBenefitPaymentsTableTextBlock

 

 

 
   Pension benefits   Postretirement benefits  
($ in millions)
   2013   2012   2011   2013   2012   2011  

Service cost

   $ 140   $ 152   $ 151   $ 12   $ 13   $ 11  

Interest cost

     265     298     322     28     36     37  

Expected return on plan assets

     (394 )   (393 )   (367 )   —     —     —  

Amortization of:

                                      

Prior service credit

     (28 )   (2 )   (2 )   (23 )   (23 )   (23 )

Net actuarial loss (gain)

     235     178     154     (16 )   (20 )   (30 )

Settlement loss

     277     33     46     —     —     1  

Curtailment gain

     —     —     —     (181 )   —     —  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net periodic cost (credit)

   $ 495   $ 266   $ 304   $ (180 ) $ 6   $ (4 )
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           

us-gaap:ScheduleOfNetBenefitCostsTableTextBlock

($ in millions)
 
   Pension
benefits		   Postretirement
benefits		  
 
   2013   2012   2013   2012  

Fair value of plan assets

   $ 5,602   $ 5,398   $ —   $ —  

Less: Benefit obligation

     5,297     6,727     482     803  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Funded status

   $ 305   $ (1,329 ) $ (482 ) $ (803 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

Items not yet recognized as a component of net periodic cost:

    
 		    
 		    
 		    
 		  

Net actuarial loss (gain)

   $ 1,794   $ 2,892   $ (236 ) $ (115 )

Prior service credit

     (480 )   (1 )   (106 )   (129 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Unrecognized pension and other postretirement benefit cost, pre-tax

    
1,314		    
2,891		    
(342
)		  
(244
)

Deferred income tax

     (460 )   (1,012 )   126     94  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Unrecognized pension and other postretirement benefit cost

   $ 854   $ 1,879   $ (216 ) $ (150 )
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

us-gaap:ScheduleOfNetFundedStatusTableTextBlock

($ in millions)
 
   Pension
benefits		   Postretirement
benefits		  

Items not yet recognized as a component of net periodic cost —
December 31, 2012

   $ 2,891   $ (244 )

Net actuarial gain arising during the period

     (579 )   (32 )

Net actuarial (loss) gain amortized to net periodic benefit cost

     (512 )   16  

Prior service credit arising during the period

     (506 )   —  

Prior service credit amortized to net periodic benefit cost

     28     23  

Plan curtailment

     —     (104 )

Translation adjustment and other

     (8 )   (1 )
           
​ ​ ​ ​ ​ ​ ​ ​

Items not yet recognized as a component of net periodic cost —
December 31, 2013

   $ 1,314   $ (342 )
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

us-gaap:ScheduleOfNetPeriodicBenefitCostNotYetRecognizedTableTextBlock