|MEDTRONIC PLC filed this Form 11-K on 10/26/2017|
The Plan reviews the fair value hierarchy classification on an annual basis. Changes in the ability to observe valuation inputs may result in a transfer between levels for certain securities within the fair value hierarchy. The Plan’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the end of the fiscal year in which the actual event or change in circumstances that caused the transfer occurs. There were no transfers between Level 1, Level 2, or Level 3 resulting from changes in valuation inputs or methods during the fiscal year ended April 30, 2017.
The methods described above may produce fair values that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table provides information by level for investments that are measured at fair value on a recurring basis. See Note 4 for additional information on the Plan's interest in the Master Trust at April 30, 2017 and 2016.
(1) Certain investments that are measured at NAV per share (or its equivalent) as a practical expedient are excluded from the fair value hierarchy. The fair value amounts presented herein are intended to permit reconciliation to the Plan's interest in the Medtronic, Inc. Master Trust Fund.
The table above excludes the Interest Income Fund, which is comprised of fully benefit-responsive investments that at April 30, 2017 and 2016 had contract values of $24,723 and $27,827. As discussed within Note 2, fully benefit-responsive contracts are measured at contract value.
The following table summarizes investments measured at fair value based on NAV as a practical expedient:
4. Plan’s Interest in the Medtronic, Inc. Master Trust Fund
Certain assets of the Plan are invested in the Master Trust, which also includes certain assets of the Medtronic Savings and Investment Plan (also known as the "Medtronic 401(k) Plan"). The Plan’s Trustee and Recordkeeper maintains a separate account for the associated Plan assets and liabilities held within the Master Trust. Investments and the income therefrom are allocated to participating plans based on each plan's participation in investment options within the Master Trust. Effective July 1, 2016, the Plan and the Medtronic 401(k) Plan recommingled certain assets in the Master Trust under custody of BNY Mellon. At April 30, 2017 and 2016, the Plan’s interests in the net assets of the Master Trust were 2.0% and 100%, respectively.
The Master Trust is invested in various funds, including funds held by registered investment companies and collective trusts, funds fully invested in Medtronic plc stock, and both traditional and synthetic GICs. The investments in the Interest Income Fund (Medtronic GIC) consist of GICs issued by financial institutions, synthetic investment contracts issued by financial institutions which are backed by investment-grade, fixed-income securities and bond mutual funds, and money market securities. Refer to Note 3 for additional discussion on the types of funds held within the Master Trust.