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## Separate account assets 

Fair values and changes in the fair values of separate account assets generally accrue directly to the policyholders and are excluded from the Company’s revenues and expenses. At December 31, separate account assets were as follows: 

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(1) As of December 31, 2012, non-guaranteed separate accounts included $3.4 billion in assets supporting the Company’s pension plans, including $956 million classified in Level 3. 

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(1) As of December 31, 2011, non-guaranteed separate accounts included $3.0 billion in assets supporting the Company’s pension plans, including $702 million classified in Level 3. 

Separate account assets in Level 1 include exchange-listed equity securities. Level 2 assets primarily include: 

corporate and structured bonds valued using recent trades of similar securities or pricing models that discount future cash flows at estimated market interest rates as described above; and GLYPH<127> 

actively-traded institutional and retail mutual fund investments and separate accounts priced using the daily net asset value that is the exit price. GLYPH<127> 

Separate account assets classified in Level 3 include investments primarily in securities partnerships, real estate and hedge funds generally valued based on the separate account’s ownership share of the equity of the investee including changes in the fair values of its underlying investments. 

The following tables summarize the change in separate account assets reported in Level 3 for the years ended December 31, 2012 and 2011. 

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(1) Included in this amount are gains of $49 million attributable to instruments still held at the reporting date. 

