Citibank 2008 Annual Report Download - page 154

Plan Assets
Citigroup’s pension and postretirement plans’ asset allocations for the U.S. plans at the end of 2008 and 2007, and the target allocations for 2009 by asset
category based on asset fair values, are as follows:
Target asset
allocation
U.S. pension assets
at December 31
U.S. postretirement assets
at December 31
Asset category 2009 2008 2007 2008 2007
Equity securities (1) 3 to 38% 6% 27% 6% 27%
Debt securities 25 to 62 42 17 42 17
Real estate 3to8 6666
Private equity 0to15 17 15 17 15
Other investments 12 to 32 29 35 29 35
Total 100% 100% 100% 100%
(1) Equity securities in the U.S. pension plans include no Citigroup common stock at the end of 2008. In January 2007, the U.S. pension plans sold all the Citigroup common stock it held (approximately $137.2 million) to
the Company at its fair value.
Third-party investment managers and affiliated advisors provide their
respective services to Citigroup’s U.S. pension plans. Assets are rebalanced as
the plan investment committee deems appropriate. Citigroup’s investment
strategy with respect to its pension assets is to maintain a globally diversified
investment portfolio across several asset classes targeting an annual rate of
return of 7.75% that, when combined with Citigroup’s contributions to the
plans, will maintain the plans’ ability to meet all required benefit
obligations.
Citigroup’s pension and postretirement plans’ weighted average asset
allocations for the non-U.S. plans and the actual ranges at the end of 2008
and 2007, and the weighted average target allocations for 2009 by asset
category based on asset fair values, are as follows:
Non-U.S. pension plans
Weighted
average Actual range Weighted average
Target asset
allocation at December 31 at December 31
Asset category 2009 2008 2007 2008 2007
Equity securities 37.61% 0.0 to 56.8% 0.0 to 75.1% 34.4% 56.2%
Debt securities 53.95 0.0 to 85.5 0.0 to 100 55.4 37.8
Real estate 0.75 0.0 to 40.1 0.0 to 35.9 0.6 0.5
Other investments 7.69 0.0 to 100 0.0 to 100 9.6 5.5
Total 100% 100% 100%
Non-U.S. postretirement plans
Weighted
average Actual range Weighted average
Target asset
allocation at December 31 at December 31
Asset category 2009 2008 2007 2008 2007
Equity securities 39.34% 0.0 to 53.18% 0.0 to 58.4% 52.26% 57.4%
Debt securities 36.13 36.11 to 100 41.6 to 100 37.21 42.6
Real estate —————
Other investments 24.53 0.0 to 10.71 —10.53 —
Total 100% 100% 100%
Citigroup’s global pension and postretirement funds’ investment
strategies are to invest in a prudent manner for the exclusive purpose of
providing benefits to participants. The investment strategies are targeted to
produce a total return that, when combined with Citigroup’s contributions to
the funds, will maintain the funds’ ability to meet all required benefit
obligations. Risk is controlled through diversification of asset types and
investments in domestic and international equities, fixed income securities
and cash. The target asset allocation in most locations outside the U.S. is to
have the majority of the assets in either equity or debt securities. These
allocations may vary by geographic region and country depending on the
nature of applicable obligations and various other regional considerations.
The wide variation in the actual range of plan asset allocations for the
funded non-U.S. plans is a result of differing local statutory requirements
and economic conditions. For example, in certain countries local law
requires that all pension plan assets must be invested in fixed income
investments, government funds, or local country securities.
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