Emerson 2008 Annual Report Download - page 50

A Powerful Force for Innovation [ 43 ]
As of the plans’ June 30 measurement date, the total accumulated benet obligation was $3,308 and $3,282 for 2008
and 2007, respectively. Also, as of the plans’ June 30 measurement date, the projected benet obligation, accumulated
benet obligation and fair value of plan assets for the retirement plans with accumulated benet obligations in excess
of plan assets were $1,127, $1,025 and $796, respectively, for 2008, and $663, $613 and $382, respectively, for 2007.
The weighted-average assumptions used in the valuations of pension benets were as follows:
 u.s.p l A n s n o n -u.s.p l A n s
  2006 2007 2008 2006 2007 2008
Weighted-average assumptions used
to determine net pension expense:
Discount rate 5.25% 6.50% 6.25% 4.7% 4.9% 5.3%
Expected return on plan assets 8.00% 8.00% 8.00% 7.2% 7.2% 7.3%
Rate of compensation increase 3.00% 3.25% 3.25% 3.0% 3.1% 3.5%
Weighted average assumptions used
to determine benefit obligations
as of June 30:
Discount rate 6.50% 6.25% 6.50% 4.9% 5.3% 5.9%
Rate of compensation increase 3.25% 3.25% 3.25% 3.1% 3.5% 3.5%
The discount rate for the U.S. retirement plans was 6.50 percent as of June 30, 2008. Dened benet pension plan
expense is expected to decline slightly in 2009.
The primary objective for the investment of plan assets is to secure participant retirement benets, while earning a
reasonable rate of return. Plan assets are invested consistent with the provisions of prudence and diversication rules
of ERISA and with a long-term investment horizon. The expected return on plan assets assumption is determined by
reviewing the investment return of the plans for the past ten years and the historical return (since 1926) of an asset
mix approximating Emerson’s current asset allocation targets and evaluating these returns in relation to expectations
of various investment organizations to determine whether long-term future returns are expected to differ signicantly
from the past. The Company’s pension plan asset allocations at June 30, 2008 and 2007, and target weighted-average
allocations are as follows:
 u.s.p l A n s n o n -u.s.p l A n s
  2007 2008t A R G e t  2007 2008t A R G e t
Asset category
Equity securities 67% 65% 64-68% 57% 54% 50-60%
Debt securities 28% 29% 27-31% 36% 35% 30-40%
Other 5% 6% 4-6% 7% 11% 5-10%
100% 100% 100% 100% 100% 100%
The Company estimates that future benet payments for the U.S. plans will be as follows: $137 in 2009, $144 in 2010,
$150 in 2011, $158 in 2012, $166 in 2013 and $958 in total over the ve years 2014 through 2018. Using foreign
exchange rates as of September 30, 2008, the Company estimates that future benet payments for the non-U.S. plans
will be as follows: $31 in 2009, $29 in 2010, $33 in 2011, $37 in 2012, $39 in 2013 and $224 in total over the ve years
2014 through 2018. In 2009, the Company expects to contribute approximately $200 to the retirement plans.

The Company sponsors unfunded postretirement benet plans (primarily health care) for U.S. retirees and their depen-
dents. Net postretirement plan expense for the years ended September 30 follows:
     2006 2007 2008
Service cost $ 5 6 5
Interest cost 26 29 29
Net amortization 32 26 27
Net postretirement $63 61 61