over comparable U.S. Treasury securities, based on the credit quality, industry and structure of the asset. Plan assets classified in Level 3 include securities partnerships, equity real estate and hedge funds generally valued based on the pension The following table summarizes the changes in pension plan assets classified in Level 3 for the years ended December 31, 2012 and December 31, 2011. Actual return on plan assets in this table may include changes in fair value that are attributable to both observable and unobservable inputs. plan’s ownership share of the equity of the investee including changes in the fair values of its underlying investments. The assets related to other postretirement benefit plans are invested in deposit funds with interest credited based on fixed income investments in the general account of CGLIC. As there are significant unobservable inputs used in determining the fair value of these assets, they are classified as Level 3. During 2012, these assets earned a return of $1 million, offset by a net withdrawal from the fund of $3 million, while during 2011, they earned a return of $1 million, offset by a net withdrawal of $2 million. Assumptions for pension and other postretirement benefit plans.  Management determined the present value of the projected benefit obligation and the accumulated other postretirement benefit obligation and related benefit costs based on the following weighted average assumptions as of and for the years ended December 31: PART II ITEM 8 Financial Statements and Supplementary Data In measuring the 2012 benefit obligations, the Company set discount rates by applying actual annualized yields at various durations from the Citigroup Above-Median Pension Liability curve to the expected cash flows of the postretirement benefits liabilities. Prior to 2012, the Company used the broader Cititgroup Pension Liability curve. The Company believes that the Citigroup Above-Median Pension Liability curve is more representative of the yields that the Company is able to achieve in its plan asset investment strategy. The curve uses an array of bonds in various industries throughout the domestic market for high quality bonds, but only selects those for the curve that have an above CIGNA CORPORATION -  2012 Form  10-K 91 Fixed Guaranteed Maturities Real Estate Deposit & Equity & Mortgage Securities Account (In millions) Securities Loans Partnerships Hedge Funds Contract Total Balance at January 1, 2012 $ 26 $ 303 $ 314 $ 148 $ 39 $ 830 Actual return on plan assets: Assets still held at the reporting date - 38 18 10 3 69 Assets sold during the period - - - - - - TOTAL ACTUAL RETURN ON PLAN ASSETS - 38 18 10 3 69 Purchases, sales, settlements, net 5 11 (4) 169 5 186 Transfers into/out of Level 3 13 - - - - 13 Balance at December 31, 2012 $ 44 $ 352 $ 328 $ 327 $ 47 $ 1,098 Fixed Guaranteed Maturities Real Estate Deposit & Equity & Mortgage Securities Account (In millions) Securities Loans Partnerships Hedge Fund Contract Total Balance at January 1, 2011 $ 46 $ 240 $ 347 $ - $ 24 $ 657 Actual return on plan assets: Assets still held at the reporting date 1 44 66 (2) 3 112 Assets sold during the period 18 - - - - 18 TOTAL ACTUAL RETURN ON PLAN ASSETS 19 44 66 (2) 3 130 Purchases, sales, settlements, net (33) 21 (99) 150 12 51 Transfers into/out of Level 3 (6) (2) - - - (8) Balance at December 31, 2011 $ 26 $ 303 $ 314 $ 148 $ 39 $ 830 2012 2011 Discount rate: Pension benefit obligation 3.50% 4.00% Other postretirement benefit obligation 3.25% 3.75% Pension benefit cost 4.00% 5.00% Other postretirement benefit cost 3.75% 4.75% Expected long-term return on plan assets: Pension benefit cost 8.00% 8.00% Other postretirement benefit cost 5.00% 5.00%