BlackRock Group Personal Pension Plan BlackRock Investment Management (U.K.) Limited (“BIM”), a wholly owned subsidiary of the Company, contributes to the BlackRock Group Personal Pension Plan, a defined contribution plan for all employees of BIM. BIM contributes between 6% and 15% of each employee’s eligible compensation. The expense for this plan was $26 million, $22 million and $13 million for the years ended December 31, 2011, 2010 and 2009, respectively. Defined Benefit Plans In 2009, prior to the BGI Transaction, the Company had several defined benefit pension plans in Japan, Germany, Luxembourg and Jersey. All accrued benefits under these defined benefit plans are currently frozen and the plans are closed to new participants. The participant benefits under the plans will not change with salary increases or additional years of service. In conjunction with the BGI Transaction, the Company assumed defined benefit pension plans in Japan and Germany, which are closed to new participants. During 2010, these plans
merged into the legacy BlackRock plans in Japan (the “Japan Plan”) and Germany. At December 31, 2011 and 2010, the plan assets for these plans were approximately $21 million and $19 million, respectively, and the unfunded obligations were less than $3 million and $6 million, respectively, which were recorded in accrued compensation and benefits on the consolidated statements of financial condition. Benefit payments for the next five years and in aggregate for the five years thereafter are not expected to be material. Defined benefit plan assets for the Japan Plan of approximately $18 million are invested using a total return investment approach whereby a mix of equity securities, debt securities and other investments are used to preserve asset values, diversify risk and achieve the target investment return benchmark. Investment strategies and asset allocations are based on consideration of plan liabilities and the funded status of the plan. Investment performance and asset allocation are measured and monitored on an ongoing basis. The current target allocations for the plan assets are 45-50% for U.S. and international equity securities, 50-55% for U.S. and international fixed income securities and 0-5% for cash and cash equivalents.
The table below provides the fair value of the defined benefit Japan Plan assets at December 31, 2011 and 2010 by asset category. The table also identifies the level of inputs used to determine the fair value of assets in each category.
Quoted Prices Significant in Active Markets Other for Identical Observable (Dollar amounts in millions) Assets (Level 1) Inputs (Level 2) Cash and cash equivalents $1 $— Equity securities 9 — Fixed income securities — 8 Fair value of plan assets $10 $8
December 31, 2011 $1 9 8 $18
Quoted Prices Significant in Active Markets Other for Identical Observable December 31, (Dollar amounts in millions) Assets (Level 1) Inputs (Level 2) 2010 Cash and cash equivalents $9 $— $9 Equity securities 4 — 4 Fixed income securities — 3 3 Fair value of plan assets $13 $3 $16
The assets and unfunded obligation for the defined benefit pension plans in Germany and Jersey were immaterial. Post-retirement Benefit Plans The Company provides post-retirement medical benefits to a closed population of employees based in the United Kingdom. For the years ended December 31, 2011, 2010 and 2009, expenses and unfunded obligations for these benefits were immaterial. In addition, the Company provides retirement medical benefits to a closed population of BGI employees in the United States. At December 31, 2011 and 2010, the accumulated benefit obligation for this unfunded plan, which is included in accrued compensation and benefits on the consolidated statements of financial condition, was approximately $8 million and $7 million, respectively. For the years ended December 31, 2011, 2010 and 2009, expenses for these benefits were immaterial
to the Company’s consolidated financial statements. The post-retirement medical plan costs are developed from actuarial valuations that include key assumptions, including the discount rate and health care cost trends. Changes in retiree medical plan benefit costs may occur in the future due to changes in these assumptions, changes in the number of plan participants and increases in the cost of healthcare. Benefit payments for the next five years and in aggregate for the five years thereafter are not expected to be material. The estimated impact of a one percentage-point change in the discount rate would be a change of less than $100 thousand on the 2011 expense and would change the projected benefit obligation by approximately $1 million.
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