The Company maintains The Hartford Retirement Plan for U.S. Employees, a U.S. qualified defined benefit pension plan (the “Plan”) that covers substantially all U.S. employees hired prior to January 1, 2013. The Company also maintains non-qualified pension plans to provide retirement benefits previously accrued that are in excess of Internal Revenue Code limitations.

The Plan includes two benefit formulas, both of which are frozen: a final average pay formula (for which all accruals ceased as of December 31, 2008) and a cash balance formula for which benefit accruals ceased as of December 31, 2012, although interest will continue to accrue to existing cash balance formula account balances. Employees who were participants as of December 31, 2012 continue to earn vesting credit with respect to their frozen accrued benefits if they continue to work. The Hartford Excess Pension Plan II, the Company's non-qualified excess pension benefit plan for certain highly compensated employees, is also frozen.

Group Retiree Health Plan- The Company provides certain health care and life insurance benefits for eligible retired employees. The Company’s contribution for health care benefits will depend upon the retiree’s date of retirement and years of service. In addition, the plan has a defined dollar cap for certain retirees which limits average Company contributions. The Hartford has prefunded a portion of the health care obligations through a trust fund where such prefunding can be accomplished on a tax effective basis. Beginning January 1, 2017, for retirees 65 and older who were participating in the Retiree PPO Medical Plan, the Company funds the cost of medical and dental health care benefits through contributions to a Health Reimbursement Account and covered individuals can access a variety of insurance plans from a health care exchange. Effective January 1, 2002, Company-subsidized retiree medical, retiree dental and retiree life insurance benefits were eliminated for employees with original hire dates with the Company on or after January 1, 2002. The Company also amended its postretirement medical, dental and life insurance coverage plans to no longer provide subsidized coverage for employees who retired on or after January 1, 2014.

Assumptions

Pursuant to accounting principles related to the Company’s pension and other postretirement obligations to employees under its various benefit plans, the Company is required to make a significant number of assumptions in order to calculate the related liabilities and expenses each period. The two economic assumptions that have the most impact on pension and other postretirement expense under the defined benefit pension plan and group retiree health plan are the discount rate and the expected long-term rate of return on plan assets. The assumed discount rates and yield curve is based on high-quality fixed income investments consistent with the maturity profile of the expected liability cash flows. Based on all available market and industry information, it was determined that 4.22% and 3.97% were the appropriate discount rates as of December 31, 2016 to calculate the Company’s pension and other postretirement obligations, respectively.

The expected long-term rate of return is based on actual compound rates of return earned over various historical time periods. The Company also considers the investment volatility, duration and total returns for various time periods related to the characteristics of the pension obligation, which are influenced by the Company's workforce demographics. In addition, the Company considers long-term market return expectations for an investment mix that generally anticipates 60% fixed income securities and 40% non fixed income securities (global equities, hedge funds and private market alternatives) to derive an expected long-term rate of return. Based upon these analyses, management determined the long-term rate of return assumption to be 6.70% and 6.90% for the years ended December 31, 2016 and 2015, respectively. To determine the Company's 2017 expense, the Company is currently assuming an expected long-term rate of return on plan assets of 6.60%.

Weighted Average Assumptions Used in Calculating the Benefit Obligations and the Net Amount Recognized



	Pension Benefits				Other Postretirement Benefits
	For the years ended December 31,
	2016		2015		2016		2015
Discount rate	4.22	%	4.25	%	3.97	%	4.00	%

Weighted Average Assumptions Used in Calculating the Net Periodic Benefit Cost for Pension Plans



	For the years ended December 31,
	2016		2015		2014
Discount rate	4.25	%	4.00	%	4.75	%
Expected long-term rate of return on plan assets	6.70	%	6.90	%	7.10	%

Weighted Average Assumptions Used in Calculating the Net Periodic Benefit Cost for Other Postretirement Plans



	For the years ended December 31,
	2016		2015		2014
Discount rate	4.00	%	3.75	%	4.25	%
Expected long-term rate of return on plan assets	6.60	%	6.90	%	7.10	%

Assumed Health Care Cost Trend Rates



	For the years ended December 31,
	2016		2015		2014
Pre-65 health care cost trend rate	6.90	%	7.30	%	7.70	%
Post-65 health care cost trend rate	N/A		5.50	%	5.60	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2024		2023		2023

A one-percentage point change in assumed health care cost trend rates would have an insignificant effect on the amounts reported for other postretirement plans.

Obligations and Funded Status

The following tables set forth a reconciliation of beginning and ending balances of the benefit obligation and fair value of plan assets, as well as the funded status of the Company's defined benefit pension and postretirement health care and life insurance benefit plans. International plans represent an immaterial percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans.

Change in Benefit Obligation



	Pension Benefits						Other Postretirement Benefits
	For the years ended December 31,
	2016			2015			2016			2015
Benefit obligation — beginning of year	$	5,734		$	6,025		$	301		$	338
Service cost	2			2			—			—
Interest cost	237			235			11			12
Plan participants’ contributions	—			—			25			25
Actuarial loss (gain)	9			18			4			—
Plan Amendment	—			—			(1		)	—
Changes in assumptions	(30		)	(236		)	—			(8		)
Benefits and expenses paid	(303		)	(307		)	(68		)	(68		)
Retiree drug subsidy	—			—			—			2
Foreign exchange adjustment	1			(3		)	—			—
Benefit obligation — end of year	$	5,650		$	5,734		$	272		$	301

Changes in assumptions in 2016 included a decrease of $51 related to the Company's use of updated mortality rates, partially offset by an increase of $21 related to a reduction in the discount rate. Changes in assumptions in 2015 primarily included the effect of an increase in the discount rate.

Change in Plan Assets



	Pension Benefits						Other Postretirement Benefits
	For the years ended December 31,
	2016			2015			2016			2015
Fair value of plan assets — beginning of year	$	4,430		$	4,707		$	162		$	196
Actual return on plan assets	250			(72		)	9			2
Employer contributions	301			101			—			—
Benefits paid [1]	(279		)	(282		)	(33		)	(36		)
Expenses paid	(24		)	(21		)	—			—
Foreign exchange adjustment	—			(3		)	—			—
Fair value of plan assets — end of year	$	4,678		$	4,430		$	138		$	162
Funded status — end of year	$	(972	)	$	(1,304	)	$	(134	)	$	(139	)


[1]	Other postretirement benefits paid represent non-key employee postretirement medical benefits paid from the Company's prefunded trust fund.

The fair value of assets for pension benefits, and hence the funded status, presented in the table above excludes assets of $132 and $127 as of December 31, 2016 and 2015, respectively, held in rabbi trusts and designated for the non-qualified pension plans. The assets do not qualify as plan assets; however, the assets are available to pay benefits for certain retired, terminated and active participants. Such assets are available to the Company’s general creditors in the event of insolvency. The rabbi trust assets consist of equity and fixed income investments. To the extent the fair value of these rabbi trusts were included in the table above, pension plan assets would have been $4,811 and $4,557 as of December 31, 2016 and 2015, respectively, and the funded status of pension benefits would have been $(840) and $(1,177) as of December 31, 2016 and 2015, respectively.

Defined Benefit Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets



	As of December 31,
	2016		2015
Projected benefit obligation	$	5,650	$	5,734
Accumulated benefit obligation	5,650		5,732
Fair value of plan assets	4,678		4,430

As of December 31, 2016, pension and other postretirement benefits plan assets totaling $4.8 billion were invested in the separate accounts of HLIC.

Amounts Recognized in the Consolidated Balance Sheets



	Pension Benefits				Other Postretirement Benefits
	As of December 31,
	2016		2015		2016		2015
Other liabilities	$	972	$	1,304	$	134	$	139

Components of Net Periodic Benefit Cost (Benefit) and Other Amounts Recognized in Other Comprehensive Income (Loss)

Net Periodic Benefit Cost (Benefit)



	Pension Benefits									Other Postretirement Benefits
	For the years ended December 31,
	2016			2015			2014			2016			2015			2014
Service cost	$	2		$	2		$	2		$	—		$	—		$	—
Interest cost	237			235			258			11			12			14
Expected return on plan assets	(311		)	(311		)	(325		)	(10		)	(12		)	(14		)
Amortization of prior service credit	—			—			—			(6		)	(7		)	(7		)
Amortization of actuarial loss	56			60			45			5			5			5
Settlements	—			—			128			—			—			—
Net periodic (benefit) cost	$	(16	)	$	(14	)	$	108		$	—		$	(2	)	$	(2	)

Amounts Recognized in Other Comprehensive Income (Loss)



	Pension Benefits						Other Postretirement Benefits
	For the years ended December 31,
	2016			2015			2016			2015
Amortization of actuarial loss	$	56		$	60		$	5		$	5
Amortization of prior service credit	—			—			(6		)	(7		)
Net loss arising during the year	(66		)	(185		)	(4		)	(3		)
Total	$	(10	)	$	(125	)	$	(5	)	$	(5	)

Amounts in Accumulated Other Comprehensive Income (Loss), Before Tax, not yet Recognized as Components of Net Periodic Benefit Cost



	Pension Benefits						Other Postretirement Benefits
	As of December 31,
	2016			2015			2016			2015
Net loss	$	(2,563	)	$	(2,553	)	$	(122	)	$	(123	)
Prior service credit	—			—			85			91
Total	$	(2,563	)	$	(2,553	)	$	(37	)	$	(32	)

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2017 is $60. The estimated prior service cost for the other postretirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost during 2017 is $(7). The estimated net loss for the other postretirement plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost during 2017 is $5.

Plan Assets

Investment Strategy and Target Allocation

The overall investment strategy of the Plan is to maximize total investment returns to provide sufficient funding for present and anticipated future benefit obligations within the constraints of a prudent level of portfolio risk and diversification. With respect to asset management, the oversight responsibility of the Plan rests with The Hartford’s Pension Fund Trust and Investment Committee composed of individuals whose responsibilities include establishing overall objectives and the setting of investment policy; selecting appropriate investment options and ranges; reviewing the asset allocation mix and asset allocation targets on a regular basis; and monitoring performance to determine whether or not the rate of return objectives are being met and that policy and guidelines are being followed. The Company believes that the asset allocation decision will be the single most important factor determining the long-term performance of the Plan.

Target Asset Allocation



	Pension Plans				Other Postretirement Plans
	minimum		maximum		minimum		maximum
Equity securities	10	%	30	%	15	%	45	%
Fixed income securities	50	%	70	%	55	%	85	%
Alternative assets	—	%	40	%	—	%	—	%

Divergent market performance among different asset classes may, from time to time, cause the asset allocation to deviate from the desired asset allocation ranges. The asset allocation mix is reviewed on a periodic basis. If it is determined that an asset allocation mix rebalancing is required, future portfolio additions and withdrawals will be used, as necessary, to bring the allocation within tactical ranges.

Pension Plan and Other Postretirement Benefit Plans’ Weighted Average Asset Allocation as a Percentage of Assets at Fair Value



	Pension Plans				Other Postretirement Plans
	As of December 31,
	2016		2015		2016		2015
Equity securities	24	%	23	%	27	%	25	%
Fixed income securities	76	%	77	%	73	%	75	%
Alternative assets	—	%	—	%	—	%	—	%
Total	100	%	100	%	100	%	100	%

The majority of the Plan assets are invested in Hartford Life Insurance Company separate accounts managed by HIMCO, a wholly-owned subsidiary of the Company. The Plan invests in commingled funds and partnerships managed by unaffiliated managers to gain exposure to emerging markets, equity, hedge funds and other alternative investments. These portfolios encompass multiple asset classes reflecting the current needs of the Plan, the investment preferences and risk tolerance of the Plan and the desired degree of diversification. These asset classes include publicly traded equities, bonds and alternative investments and are made up of individual investments in cash and cash equivalents, equity securities, debt securities, asset-backed securities and hedge funds. Hedge fund investments represent a diversified portfolio of partnership investments in a variety of strategies.

In addition, the Company uses U.S. Treasury bond futures contracts and U.S. Treasury STRIPS in a duration overlay program to adjust the duration of Plan assets to better match the duration of the benefit obligation.

Investment Valuation

For further discussion of the valuation of investments, see Note 5 - Fair Value Measurements of Notes to Consolidated Financial Statements.

Pension Plan Assets at Fair Value as of December 31, 2016



Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments:	$	12	$	299	$	—	$	311
Fixed Income Securities:
Corporate	—		1,469		13		1,482
RMBS	—		266		10		276
U.S. Treasuries	69		649		4		722
Foreign government	—		37		1		38
CMBS	—		131		—		131
Other fixed income [1]	—		96		18		114
Mortgage Loans	—		—		121		121
Equity Securities:
Large-cap domestic	589		107		—		696
Mid-cap domestic	23		—		—		23
International	300		—		—		300
Total pension plan assets at fair value [2]	$	993	$	3,054	$	167	$	4,214
Other Investments [3]:
Private Market Alternatives	$	—	$	—	$	—	$	87
Hedge funds	$	—	$	—	$	—	$	340
Total pension plan assets	$	993	$	3,054	$	167	$	4,641


[1]	Includes ABS, municipal bonds, and CDOs.


[2]	Excludes approximately $2 of investment payables net of investment receivables that are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value. Also excludes approximately $39 of interest receivable.


[3]	Represents investments that calculate net asset value per share or an equivalent measurement.

Pension Plan Assets at Fair Value as of December 31, 2015



Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments:	$	7	$	274	$	—	$	281
Fixed Income Securities:
Corporate	—		922		19		941
RMBS	—		242		24		266
U.S. Treasuries	16		1,029		3		1,048
Foreign government	—		49		5		54
CMBS	—		183		—		183
Other fixed income [1]	—		105		1		106
Mortgage Loans	—		—		54		54
Equity Securities:
Large-cap domestic	500		11		1		512
International	298		87		—		385
Total pension plan assets at fair value [2]	$	821	$	2,902	$	107	$	3,830
Other Investments [3]:
Private Market Alternatives	$	—	$	—	$	—	$	20
Hedge funds	$	—	$	—	$	—	$	620
Total pension plan assets	$	821	$	2,902	$	107	$	4,470


[1]	Includes ABS,municipal bonds, and CDOs.


[2]	Excludes approximately $67 of investment payables net of investment receivables that are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value. Also excludes approximately $27 of interest receivable.


[3]	Represents investments that calculate net asset value per share or an equivalent measurement.

The tables below provide fair value level 3 roll-forwards for the Pension Plan Assets for which significant unobservable inputs (Level 3) are used in the fair value measurement on a recurring basis. The Plan classifies the fair value of financial instruments within Level 3 if there are no observable markets for the instruments or, in the absence of active markets, if one or more of the significant inputs used to determine fair value are based on the Plan’s own assumptions. Therefore, the gains and losses in the tables below include changes in fair value due to both observable and unobservable factors.



2016 Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets	Corporate			RMBS			Foreign government			Mortgage loans			Other [1]			Totals
Fair Value as of January 1, 2016	$	19		$	24		$	5		$	54		$	5		$	107
Realized gains (losses), net	—			—			—			—			1			1
Changes in unrealized gains (losses), net	—			—			—			(3		)	—			(3		)
Purchases	15			—			—			70			24			109
Settlements	—			(14		)	—			—			(1		)	(15		)
Sales	(10		)	—			(4		)	—			(9		)	(23		)
Transfers into Level 3	—			2			—			—			3			5
Transfers out of Level 3	(11		)	(2		)	—			—			(1		)	(14		)
Fair Value as of December 31, 2016	$	13		$	10		$	1		$	121		$	22		$	167


[1]	"Other" includes U.S. Treasuries, Other fixed income and Large-cap domestic equities investments.

During the year ended December 31, 2016, transfers into and (out) of Level 3 are primarily attributable to the appearance of or lack thereof of market observable information and the re-evaluation of the observability of pricing inputs.



2015 Pension Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets	Corporate			RMBS			Foreign government			Mortgage loans		Other			Totals
Fair Value as of January 1, 2015	$	34		$	28		$	5		$	—	$	9		$	76
Realized gains (losses), net	—			—			—			—		—			—
Changes in unrealized gains (losses), net	(2		)	—			(1		)	—		(1		)	(4		)
Purchases	12			14			1			54		3			84
Settlements	—			(14		)	—			—		(3		)	(17		)
Sales	(11		)	(2		)	—			—		(1		)	(14		)
Transfers into Level 3	—			4			—			—		1			5
Transfers out of Level 3	(14		)	(6		)	—			—		(3		)	(23		)
Fair Value as of December 31, 2015	$	19		$	24		$	5		$	54	$	5		$	107

During the year ended December 31, 2015, transfers in and/or (out) of Level 3 are primarily attributable to the availability of market observable information and the re-evaluation of the observability of pricing inputs.

There was no Company common stock included in the Plan’s assets as of December 31, 2016 and 2015.



Other Postretirement Plan Assets at Fair Value as of December 31, 2016
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	4	$	—	$	—	$	4
Fixed Income Securities:
Corporate	—		35		1		36
RMBS	—		24		1		25
U.S. Treasuries	5		14		—		19
Foreign government	—		2		—		2
CMBS	—		9		—		9
Other fixed income	—		4		1		5
Equity Securities:
Large-cap	37		—		—		37
Total other postretirement plan assets at fair value [1]	$	46	$	88	$	3	$	137


[1]	Excludes approximately $1 of investment payables net of investment receivables that are excluded from this disclosure requirement because they are trade receivables in the ordinary course of business where the carrying amount approximates fair value. Also excludes approximately $1 of interest receivable.



Other Postretirement Plan Assets at Fair Value as of December 31, 2015
Asset Category	Level 1		Level 2		Level 3		Total
Short-term investments	$	—	$	16	$	—	$	16
Fixed Income Securities:
Corporate	—		36		2		38
RMBS	—		27		3		30
U.S. Treasuries	—		23		—		23
Foreign government	—		2		—		2
CMBS	—		14		—		14
Other fixed income	—		7		—		7
Equity Securities:
Large-cap	41		—		—		41
Total other postretirement plan assets at fair value [1]	$	41	$	125	$	5	$	171


[1]	Excludes approximately $5 of investment payables net of investment receivables that are not carried at fair value and approximately $1 of interest receivable carried at fair value.



Other Postretirement Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets	Corporate			RMBS			Foreign Government		Other Fixed Income		Totals
Fair Value as of January 1, 2016	$	2		$	3		$	—	$	—	$	5
Changes in unrealized gains (losses), net	—			—			—		—		—
Purchases	1			—			—		1		2
Settlements	—			(2		)	—		—		(2		)
Sales	(1		)	—			—		—		(1		)
Transfers into Level 3	—			—			—		—		—
Transfers out of Level 3	(1		)	—			—		—		(1		)
Fair Value as of December 31, 2016	$	1		$	1		$	—	$	1	$	3



Other Postretirement Plan Asset Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Assets	Corporate			RMBS			Foreign Government		Other Fixed Income		Totals
Fair Value as of January 1, 2015	$	3		$	3		$	—	$	—	$	6
Changes in unrealized gains (losses), net	—			—			—		—		—
Purchases	1			1			—		—		2
Settlements	—			(1		)	—		—		(1		)
Sales	(1		)	—			—		—		(1		)
Transfers into Level 3	—			—			—		—		—
Transfers out of Level 3	(1		)	—			—		—		(1		)
Fair Value as of December 31, 2015	$	2		$	3		$	—	$	—	$	5

There was no Company common stock included in the other postretirement benefit plan assets as of December 31, 2016 and 2015.

Concentration of Risk

In order to minimize risk, the Plan maintains a listing of permissible and prohibited investments. In addition, the Plan has certain concentration limits and investment quality requirements imposed on permissible investment options. Permissible investments include U.S. equity, international equity, alternative asset and fixed income investments including derivative instruments. Derivative instruments include future contracts, options, swaps, currency forwards, caps or floors and will be used to control risk or enhance return but will not be used for leverage purposes.

Securities specifically prohibited from purchase include, but are not limited to: shares or fixed income instruments issued by The Hartford, short sales of any type within long-only portfolios, non-derivative securities involving the use of margin, leveraged floaters and inverse floaters, including money market obligations, natural resource real properties such as oil, gas or timber and precious metals.

Other than U.S. government and certain U.S. government agencies backed by the full faith and credit of the U.S. government, the Plan does not have any material exposure to any concentration risk of a single issuer.

Cash Flows

Company Contributions



Employer Contributions	Pension Benefits		Other Postretirement Benefits
2016	$	301	$	—
2015	$	101	$	—

In 2016, the Company, at its discretion, made $300 in contributions to the U.S. qualified defined benefit pension plan. The Company does not have a 2017 required minimum funding contribution for the U.S. qualified defined benefit pension plan. The Company has not determined whether, and to what extent, contributions may be made to the U. S. qualified defined benefit pension plan in 2017. The Company will monitor the funded status of the U.S. qualified defined benefit pension plan during 2017 to make this determination.

Employer contributions in 2016 and 2015 were made in cash and did not include contributions of the Company’s common stock.

Benefit Payments

Amounts of Benefits Expected to be Paid over the next Ten Years from Pension and other Postretirement Plans as of December 31, 2016



	Pension Benefits		Other Postretirement Benefits
2017	$	333	$	33
2018	339		30
2019	346		27
2020	353		24
2021	352		22
2022 - 2026	1,748		82
Total	$	3,471	$	218