Equifax 2009 Annual Report Download - page 72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
The Plans, in an effort to meet asset allocation objectives, utilize a 2008
variety of asset classes which have historically produced returns USRIP EIPP
which are relatively uncorrelated to those of the S&P 500 in most Range Actual Range Actual
environments. Asset classes included in this category are alternative
assets (hedge fund-of-funds), private equity (including secondary pri- Large-Cap Equity 10%–35% 14.3% 10%–40% 17.4%
vate equity) and real estate. The primary benefits of using these Small- and Mid-Cap
types of asset classes are: (1) their non-correlated returns reduce Equity 0%–15% 3.3% 0%–15% 8.2%
the overall volatility of the Plans’ portfolio of assets, and (2) their International Equity 10%–30% 12.0% 10%–25% 11.1%
ability to produce superior risk-adjusted returns. This has allowed Private Equity 2%–10% 7.5% 2%–10% 5.2%
the Plans’ average annual investment return to exceed the S&P 500 Hedge Funds 10%–30% 19.0% 10%–30% 8.4%
index return over the last ten years. Additionally, the Plans allow Real Assets 2%–10% 6.3% 5%–15% 5.3%
certain of their managers, subject to specific risk constraints, to Fixed Income 15%–40% 28.9% 10%–35% 19.0%
utilize derivative instruments, in order to enhance asset return, Cash 0%–15% 8.7% 0%–15% 25.4%
reduce volatility or both. Derivatives are primarily employed by the
Plans in their fixed income portfolios and in the hedge fund-of-funds Due to the timing of certain hedge fund redemptions and subse-
area. Derivatives can be used for hedging purposes to reduce risk. quent reinvestment, the EIPP Plan was under allocated to hedge
During 2007, the Equifax Master Trust entered into certain allowed funds and over allocated to cash at December 31, 2008.
derivative arrangements in order to minimize potential losses in the
Plans’ assets. These agreements were settled in 2008 resulting in CRIP Investment and Asset Allocation Strategies. The Pension
payments received of $13.2 million in the USRIP and $6.6 million in Committee of the CRIP has retained an investment manager who
the EIPP. has the discretion to invest in various asset classes with the care,
skill, and diligence expected of professional prudence. The CRIP
The Plans are prohibited from investing additional amounts in has a separate custodian of those assets, which are held in various
Equifax stock once the market value of stock held by each plan segregated pooled funds. The Pension Committee maintains an
exceeds 10% of the total market value of each plan. At Decem- investment policy for the CRIP, which imposes certain limitations
ber 31, 2009, the USRIP’s assets included 0.5 million shares of and restrictions regarding allowable types of investments. The cur-
Equifax common stock, with a market value of $15.3 million. At rent investment policy imposes those restrictions on investments or
December 31, 2008, the USRIP and EIPP’s assets included 0.8 mil- transactions such as (1) Equifax common stock or securities, except
lion shares and 0.1 million shares, respectively, of Equifax common as might be incidental to any pooled funds which the plan may
stock, with a market value of $21.3 million and $2.4 million, respec- have, (2) commodities or loans, (3) short sales and the use of mar-
tively. Not more than 5% of the portfolio (at cost) shall be invested gin accounts, (4) put and call options, (5) private placements, and
in the securities of any one issuer, with the exceptions of Equifax (6) transactions which are ‘‘related-party’’ in nature as specified by
common stock or other securities, and U.S. Treasury and govern- the Canadian Pension Benefits Standards Act and its regulations.
ment agency securities.
The following asset allocation ranges and actual allocations were in
effect as of December 31, 2009 and 2008:
2009
USRIP Range Actual
Large-Cap Equity 10%–35% 14.7%
Small- and Mid-Cap Equity 0%–15% 4.9%
International Equity 10%–30% 15.5%
Private Equity 2%–10% 5.6%
Hedge Funds 10%–30% 14.2%
Real Assets 2%–10% 6.0%
Fixed Income 15%–40% 27.9%
Cash 0%–15% 11.2%
70 EQUIFAX 2009 ANNUAL REPORT
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