Equifax 2007 Annual Report Download - page 78

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
76 EQUIFAX | 2007 ANNUAL REPORT
Weighted-Average Assumptions.
Weighted-Average Assumptions Used to Determine Benefi t Obligations at December 31, Pension Benefi ts Other Benefi ts
(In millions)
2007 2006 2007 2006
Discount rate 6.23% 5.86% 6.04% 5.84%
Rate of compensation increase 4.30% 4.28% N/A N/A
Weighted-Average Assumptions Used to Determine Net Periodic Benefi t Cost at December 31, Pension Benefi ts Other Benefi ts
(In millions) 2007 2006 2005 2007 2006 2005
Discount rate 5.86% 5.68% 5.90% 5.84% 5.58% 5.92%
Expected return on plan assets 8.00% 7.99% 7.98% 8.00% 8.00% 8.00%
Rate of compensation increase 4.28% 4.28% 4.34% N/A N/A N/A
The calculation of the net periodic benefi t cost for the USRIP,
EIPP and CRIP utilizes a market-related value of assets. The
market-related value of assets recognizes the difference between
actual returns and expected returns over fi ve years at a rate of 20%
per year.
An initial 9.0% annual rate of increase in the per capita cost of
covered healthcare benefi ts was assumed for 2008. The rate was
assumed to decrease gradually to an ultimate rate of 5.0% by 2012.
Assumed healthcare cost trend rates have a signifi cant effect on the
amounts reported for the healthcare plan. A one-percentage point
change in assumed healthcare cost trend rates at December 31, 2007
would have had the following effects:
1-Percentage 1-Percentage
(In millions) Point Increase Point Decrease
Effect on total service and
interest cost components $0.2 $(0.2)
Effect on accumulated
postretirement benefit obligation $2.5 $(2.2)
We estimate that the future benefi ts payable for our retirement
and postretirement plans are as follows at December 31, 2007:
U.S. Defined Non-U.S. Defined Other
Years Ending December 31, Benefit Plans Benefit Plans Benefit Plans
(In millions)
2008 $ 37.8 $ 2.5 $ 3.8
2009 $ 38.5 $ 2.6 $ 4.0
2010 $ 38.6 $ 2.6 $ 3.9
2011 $ 38.8 $ 2.7 $ 4.0
2012 $ 39.3 $ 2.8 $ 3.8
Next five fiscal years
to December 31, 2017 $201.6 $15.3 $16.3
USRIP and EIPP, or the Plans,
Investment and Asset Allocation Strategies.
The primary goal of the asset allocation strategy of the Plans is to
produce a total investment return, employing the lowest possible
level of fi nancial risk, which will: (1) satisfy annual cash benefi ts
payments to the Plans’ participants and (2) maintain and increase
the total market value of the Plans’ assets, after cash benefi ts
payments, on a real (infl ation adjusted) basis. Maximization of total
investment return is not, taken in isolation, a goal of the asset
allocation strategies of the Plans. Return maximization is pursued
subject to the asset allocation risk control constraints noted previ-
ously. The Plan’s investment managers are required to abide by the
provisions of ERISA. Standards of performance for each manager
include an expected return versus an assigned benchmark, a measure
of volatility, and a time period of evaluation.
The Plans’ asset allocation strategies are determined based upon
guidelines provided by our external advisor. This forecasting process
takes into account projected investment returns by asset category,
the correlation among those returns, the standard deviation of those
returns and the future pattern of actuarial liabilities to which the
plan is obligated. Asset/liability forecasting is conducted periodically,
as needed, utilizing input from our external consulting actuaries,
and our external investment advisor. The Plans’ asset allocation and
ranges are approved by in-house Plan Administrators, who are
Named Fiduciaries under ERISA. Investment recommendations
are made by our external advisor, working in conjunction with
our in-house Investment Offi cer. The expected return on plan assets
assumption of 8.00% and 8.25% for the USRIP and the EIPP,
respectively, in 2007 was based on the 50th percentile return from
our asset/liability forecasting process.