Cablevision 2013 Annual Report Download - page 169

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share amounts)
F-60
Pension Plan Assets and Investment Policy
The weighted average asset allocations of the Pension Plan at December 31, 2013 and 2012 were as
follows:
Plan Assets at December 31,
2013 2012
Asset Class:
Fixed income securities ....................................................................................... 88% 93%
Cash equivalents and other .................................................................................. 12 7
100% 100%
The Pension Plan's investment objectives reflect an overall low risk tolerance to stock market volatility.
This strategy allows for the Pension Plan to invest in portfolios that would obtain a fixed rate of return
throughout economic cycles, commensurate with the investment risk and cash flow needs of the Pension
Plan. This requires the Pension Plan to subject a portion of its assets to increased risk to generate a
greater rate of return. The investments held in the Pension Plan are readily marketable and can be sold to
fund benefit payment obligations of the plan as they become payable.
Investment allocation decisions are formally made by the Company's Investment and Benefit Committee,
which takes into account investment advice provided by its external investment consultant. The
investment consultant takes into account expected long-term risk, return, correlation, and other prudent
investment assumptions when recommending asset classes and investment managers to the Company's
Investment and Benefit Committee. The investment consultant also takes into account the Pension Plan's
liabilities when making investment allocation decisions. These decisions are driven by asset/liability
studies conducted by the external investment consultant who combine actuarial considerations and
strategic investment advice. The major categories of the Pension Plan assets are cash equivalents and
bonds which are marked-to-market on a daily basis. Due to the Pension Plan's significant holdings in
long-term government and non-government securities, the Pension Plan's assets are subjected to interest
rate risk; specifically, a rising interest rate environment. However, these assets are structured in an
asset/liability framework. Consequently, an increase in interest rates causes a corresponding decrease to
the overall liability of the Pension Plan thus creating a hedge against rising interest rates. Additional risks
involving the asset/liability framework include earning insufficient returns to cover future liabilities and
imperfect hedging of the liability. In addition, a portion of the Pension Plan's bond portfolio is invested in
foreign debt securities where there could be foreign currency risks associated with them, as well as in
non-government securities which are subject to credit risk of the bond issuer defaulting on interest and/or
principal payments.