Goldman Sachs 2007 Annual Report Download - page 128

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Notes to Consolidated Financial Statements
The assumed cost of healthcare has an effect on the amounts reported for the firm’s postretirement plans. A 1% change in the
assumed healthcare cost trend rate would have the following effects:
1% Increase 1% Decrease
(in millions) 2007 2006 2007 2006
Service plus interest costs $12 $ 9 $ (9) $ (7)
Obligation 94 79 (72) (62)
The following table sets forth the composition of plan assets for the U.S. and non-U.S. defined benefit pension plans by asset category:
As of November
2007 2006
U.S. Non-U.S. U.S. Non-U.S.
Pension Pension Pension Pension
Equity securities 63% 45% 64% 61%
Debt securities 23 8 22 8
Other 14 47 14 31
Total 100% 100% 100% 100%
The following table sets forth benefits projected to be paid
from the firm’s U.S. and non-U.S. defined benefit pension and
postretirement plans (net of Medicare subsidy receipts) and
reflects expected future service costs, where appropriate:
U.S. Non-U.S. Post-
(in millions) Pension Pension retirement
2008 $ 8 $ 7 $ 9
2009 9 7 12
2010 9 8 14
2011 10 8 15
2012 11 8 16
2013 – 2017 74 41 103
Defined Contribution Plans
The firm contributes to employer-sponsored U.S. and non-
U.S. defined contribution plans. The firm’s contribution to
these plans was $258 million, $230 million and $305 million
for the years ended November 2007, November 2006 and
November 2005, respectively.
The investment approach of the firm’s U.S. and major non-U.S.
defined benefit pension plans involves employing a sufficient
level of flexibility to capture investment opportunities as they
occur, while maintaining reasonable parameters to ensure that
prudence and care are exercised in the execution of the investment
programs. The plans employ a total return on investment
approach, whereby a mix, which is broadly similar to the actual
asset allocation as of November 2007, of equity securities, debt
securities and other assets, is targeted to maximize the long-
term return on assets for a given level of risk. Investment risk
is measured and monitored on an ongoing basis by the firm’s
Retirement Committee through periodic portfolio reviews,
meetings with investment managers and annual liability
measurements.
The firm expects to contribute a minimum of $133 million to its
pension plans and $9 million to its postretirement plans in 2008.
126 Goldman Sachs 2007 Annual Report