The DB Plan also holds assets under an immediate participation guarantee group annuity
contract with a life insurance company. The assets under the contract are invested in pooled
separate accounts and in a general investment account. The pooled separate accounts are
valued based on net asset value per unit of participation in the fund and have no unfunded
commitments or significant redemption restrictions at year-end. The value of these units is
determined by the trustee based on the current market values of the underlying assets of the
pooled separate accounts. Therefore, the value of the pooled separate accounts is deemed to
be at estimated fair value.
The general investment account is not actively traded and significant other observable inputs are
not available. The fair value of the general investment account is calculated by discounting the
related cash flows based on current yields of similar instruments with comparable durations.
The methods described above may produce a fair value calculation that may not be indicative of
net realizable value or reflective of future fair values. Furthermore, while the Plan’s management
believes the valuation methodologies are appropriate and consistent with other market
participants, the use of different methodologies or assumptions to determine the fair value of
certain investments could result in a different fair value measurement at the reporting date.
A fair value hierarchy which prioritizes the inputs to valuation methods is used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements).
The fair value of DB Plan and OPEB Plan assets by levels within the fair value hierarchy
used as of December 31, 2016 was as follows:
(in thousands) Totals Level 1 Level 2 Level 3
DB Plan:
Equities:
Pooled separate accounts $ 9,561 $ - $ 9,561 $ -
Fixed income:
General investment account 2,264 - - 2,264
Pooled separate accounts 3,064 - 3,064 -
Total DB Plan 14,889 - 12,625 2,264
(continued)
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