Honeywell 2008 Annual Report Download - page 137

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Our U.S. pension plans assets were $8.7 and $13.0 billion and our non-U.S. pension plans assets were $2.8
and $4.2 billion at December 31, 2008 and 2007, respectively. Our asset allocation and target allocation for our
pension plans assets are as follows:
Asset Category
Percentage
of Plans
Assets at
December 31,
Long-term
Target
Allocation
2008 2007
Equity securities 54% 63% 45-70%
Debt securities, including cash 25 26 15-30
Real estate 9 6 5-10
Other 12 5 5-15
100% 100%
Our asset investment strategy focuses on maintaining a diversified portfolio using various asset classes in
order to achieve our long-term investment objectives on a risk adjusted basis. Our actual invested positions in
various securities change over time based on short and longer-term investment opportunities. To achieve our
objectives, our U.S. investment policy requires that our U.S. Master Retirement Trust be invested as follows: (a)
no less than 5 percent be invested in fixed income securities; (b) no more than 10 percent in private real estate
investments; and (c) no more than 18 percent in other investment alternatives involving limited partnerships of
various types. There is no stated limit on investments in publicly-held U.S. and international equity securities. Our
non-U.S. investment policies are different for each country, but the long-term investment objectives remain the
same.
Our general funding policy for qualified pension plans is to contribute amounts at least sufficient to satisfy
regulatory funding standards. In 2008, 2007 and 2006, we made voluntary cash contributions of $42, $42 and
$68 million, respectively, to our U.S. defined benefit pension plans primarily for government contracting
purposes. In December 2008, we also made a voluntary contribution of $200 million of Honeywell common stock
to our U.S. plans to improve the funded status of our plans. At December 31, 2008 and 2007, the fair value of our
pension plans assets invested in Honeywell common stock was $204 and $14 million, respectively. During 2009,
we plan to make additional voluntary contributions of Honeywell common stock to our U.S. plans totaling
approximately $800 million to improve the funded status of our plans. In 2009, we also expect to contribute
approximately $140 million in cash to our non-U.S. defined benefit pension plans to satisfy regulatory funding
standards. These contributions do not reflect benefits to be paid directly from Company assets.
Benefit payments, including amounts to be paid from Company assets, and reflecting expected future
service, as appropriate, are expected to be paid as follows:
2009 $ 1,104
2010 1,098
2011 1,115
2012 1,146
2013 1,146
2014-2018 6,042
Other Postretirement Benefits
FASB Staff Position No. 106-2 "Accounting and Disclosure Requirements Related to the Medicare
Prescription Drug, Improvement and Modernization Act of 2003" (FSP No. 106-2) provides guidance on
accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the
Act) for employers that sponsor postretirement health care plans that provide prescription
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