NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  At December 31, 2013, the Pension Plan held $15 million of Hydro One corporate bonds (2012 – $20 million) and $217 million of debt  securities of the Province (2012 – $243 million). Hydro One evaluated its Pension Plan’s asset portfolio for the existence of significant concentrations of credit risk as at December 31, 2013  and 2012. Concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, concentrations in a  type of industry, and concentrations in individual funds. At December 31, 2013 and 2012, there were no significant concentrations (defined  as greater than 10% of plan assets) of risk in the Pension Plan’s assets. The Pension Plan manages its counterparty credit risk with respect to bonds by investing in investment-grade and government bonds and with  respect to derivative instruments by transacting only with financial institutions rated at least “A+” by Standard and Poor’s, Dominion Bond Rating  Service, and Fitch Ratings, and “A1” by Moody’s Investors Service Inc., and also by utilizing exposure limits to each counterparty and ensuring  that exposure is diversified across counterparties. The risk of default on transactions in listed securities is considered minimal, as the trade will fail if either party to the transaction does not meet its obligation. Concentrations of Credit Risk Fair Value Measurements The following tables present the Pension Plan assets measured and recorded at fair value on a recurring basis and their level within the fair  value hierarchy at December 31, 2013 and 2012: December 31, 2013 (millions of Canadian dollars) Level 1  Level 2  Level 3  Total Pooled funds  1 16 117 134 Cash and cash equivalents  150 – – 150 Short-term securities  – 180 – 180 Real estate  – – 2 2 Corporate shares – Canadian  943 – – 943 Corporate shares – Foreign  2,708 – – 2,708 Bonds and debentures – Canadian – 1,416 – 1,416 Bonds and debentures – Foreign  – 186 – 186 Total fair value of plan assets 1 3,802 1,798 119 5,719 December 31, 2012 (millions of Canadian dollars) Level 1  Level 2  Level 3  Total Pooled funds  2  15  104  121 Cash and cash equivalents  125  –  –  125 Short-term securities  –  100  –  100 Real estate  –  –  2  2 Corporate shares – Canadian  920  –  –  920 Corporate shares – Foreign  2,077  –  –  2,077 Bonds and debentures – Canadian –  1,643  –  1,643 Total fair value of plan assets 1 3,124 1,758 106 4,988 1  At December 31, 2013, the total fair value of Pension Plan assets excludes $19 million of interest and dividends receivable, and $7 million relating to accruals for pension administration expense. 1  At December 31, 2012, the total fair value of Pension Plan assets excludes $16 million of interest and dividends receivable, $4 million relating to accruals for pending sales transactions, and $8 million relating to accruals for pension administration expense. See Note 13 – Fair Value of Financial Instruments and Risk Management for a description of levels within the fair value hierarchy. HYDRO ONE ANNUAL REPORT 2013 85