Equifax 2006 Annual Report Download - page 79

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EQUIFAX 2006 ANNUAL REPORT 77
The following USRIP and EIPP asset allocation
ranges, targets and actual allocations were in effect as
of December 31, 2006 and 2005:
Actual
Target Range 2006 2005
USRIP
Large-Cap Equity 20% 15%–35% 23.3% 22.8%
Mid-Cap Equity 6% 5%–15% 8.0% 7.7%
Small-Cap Equity 8% 5%–15% 6.7% 11.8%
International Equity 14% 10%–20% 20.7% 17.7%
Hedge Fund of Funds 16% 5%–20% 19.1% 17.7%
Venture Capital 6% 5%–10% 6.4% 6.7%
Real Estate 10% 5%–15% 2.5% 3.3%
Fixed Income 20% 10%–35% 11.4% 11.6%
Cash minimal 0%–2% 1.9% 0.7%
EIPP
Large-Cap Equity 22% 15%–35% 25.3% 33.1%
Mid-Cap Equity 6% 5%–15% 13.9% 19.2%
Small-Cap Equity 8% 5%–15% 7.4% 9.4%
International Equity 16% 10%–20% 15.4% 18.1%
Hedge Fund of Funds 16% 5%–20% 14.4% 6.9%
Venture Capital 8% 5%–10% 2.9% 4.8%
Real Estate 14% 0%–15% 13.0% 2.8%
Fixed Income 10% 5%–25% 6.8% 5.7%
Cash minimal 0%–2% 0.9% 0.0%
CRIP Investment and Asset Allocation Strategies. The
Pension Committee of the CRIP has retained an invest-
ment manager who has the discretion to invest in various
asset classes with the care, skill, and diligence expected of
professional prudence. The CRIP has a separate custodian
of those assets, which are held in various segregated
pooled funds. The Pension Committee maintains an
investment policy for the CRIP, which imposes certain
limitations and restrictions regarding allowable types of
investments. The current investment policy imposes those
restrictions on investments or transactions such as (1)
Equifax common stock or securities, except as might be
incidental to any pooled funds which the plan may have,
(2) commodities or loans, (3) short sales and the use of
margin accounts, (4) put and call options, (5) private
placements, and (6) transactions which are “party-related”
in nature as specifi ed by the Canadian Pension Benefi ts
Standards Act and its regulations.
Each pooled fund is associated with an asset classifi cation,
which has a primary investment objective. The objective for
each asset class is related to a standard investment index and
to a period of four-years. The following includes the objectives
for each of the current fi ve asset classes:
Asset Class Four-Year Objective
Canadian Equities S&P/TSX Composite Total Return
Index plus 1.5%
U.S. Equities S&P 500 Total Return Index plus
1.5% (Canadian $)
International Equities MSCI EAFE Total Return Index
plus 1.5% (Canadian $)
Fixed Income Scotia Capital Universe Bond
Index™ plus 0.5%
Money Market Scotia Capital 91-Day Treasury Bill
Index plus 0.3%
The plan’s manager derives its investment return projec-
tions using several criteria. The determination of projected
infl ation is necessary to apply the premium to compute the
nominal return for each asset class. The risk premium is
based on historical studies of capital markets. The real
return expectations for the various asset classes are based on
historical relationships that acknowledge the risk premium
inherent among the various asset classes. The nominal
return, computed as described above, is then adjusted for
various market and economic factors, including the status of
the economic cycle, currency issues, the direction of interest
rates, and price/earnings multiples. Next, specifi c time-
weighted return targets are set for the total fund, based on a
benchmark portfolio return. The Pension Committee expects
the investment manager to exceed that return by a predeter-
mined value over a certain period.
The following specifi es the asset allocation ranges, targets,
and actual allocation as of December 31, 2006 and 2005:
Actual
Target Range 2006 2005
Canadian Equities 40.5% 30%–50% 37.7% 39.3%
U.S. Equities 19.0% 9%–29% 20.4% 20.5%
International Equities 10.0% 0%–19% 12.0% 11.4%
Fixed Income 28.5% 20%–40% 29.8% 28.1%
Money Market 2.0% 0%–10% 0.1% 0.7%