ADT 2009 Annual Report Download - page 237

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. Retirement Plans (Continued)
In determining the expected return on plan assets, the Company considers the relative weighting of
plan assets by class and individual asset class performance expectations as provided by its external
advisors.
The Company’s investment strategy for its pension plans is to manage the plans on a going-
concern basis. Current investment policy is to maximize the return on assets, subject to a prudent level
of portfolio risk, for the purpose of enhancing the security of benefits for participants. For U.S. pension
plans, this policy targets a 60% allocation to equity securities and a 40% allocation to debt securities.
Various asset allocation strategies are in place for non-U.S. pension plans, with a weighted-average
target allocation of 52% to equity securities, 44% to debt securities and 4% to other asset classes,
including real estate and cash equivalents.
Pension plans have the following weighted-average asset allocations:
U.S. Plans Non-U.S. Plans
2009 2008 2009 2008
Asset Category:
Equity securities ........................... 61% 57% 54% 48%
Debt securities ............................ 36% 42% 42% 46%
Real estate ............................... — — 2% 3%
Cash and cash equivalents .................... 3% 1% 2% 3%
Total .................................. 100%100% 100% 100%
Although the Company does not buy or sell any of its own securities as a direct investment for its
pension funds, due to external investment management in certain commingled funds, the plans may
indirectly hold Tyco securities. The aggregate amount of the securities would not be considered
material relative to the total fund assets.
During 2009, the Company contributed $61 million to its U.S. and non-U.S. pension plans, which
represented the Company’s minimum required contributions to its pension plans for fiscal year 2009.
Additionally, the Company made voluntary contributions of $22 million during 2009 to its U.S. pension
plans.
The Company’s funding policy is to make contributions in accordance with the laws and customs of
the various countries in which it operates as well as to make discretionary voluntary contributions from
time-to-time. The Company anticipates that it will contribute at least the minimum required to its
pension plans in 2010 of $4 million for the U.S. plans and $76 million for non-U.S. plans.
2009 Financials 145