Jack In The Box 2009 Annual Report Download - page 64

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Table of Contents


For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement health plans were as
follows for each fiscal year:
 
Health care cost trend rate for next year:
Participants under age 65 8.00% 7.50%
Participants age 65 or older 7.50% 7.69%
Rate to which the cost trend rate is assumed to decline 5.00% 4.94%
Year the rate reaches the ultimate trend rate 2021 2013
The assumed health care cost trend rate represents our estimate of the annual rates of change in the costs of the health care benefits
currently provided by our postretirement plans. The health care cost trend rate implicitly considers estimates of health care inflation,
changes in health care utilization and delivery patterns, technological advances and changes in the health status of the plan participants.
The health care cost trend rate assumption has a significant effect on the amounts reported. For example, increasing the assumed health
care cost trend rates by 1.0% in each year would increase the postretirement benefit obligation as of September 27, 2009 by $3.2 million
and the aggregate of the service and interest cost components of net periodic benefit cost for 2009 by $0.2 million. If the assumed health
care cost trend rates decreased by 1.0% in each year, the postretirement benefit obligation would decrease by $2.7 million as of
September 27, 2009, and the aggregate of the service and interest components of net periodic benefit cost for 2009 would decrease by
$0.2 million.
Plan assets — Our investment strategy is to seek a competitive rate of return relative to an appropriate level of risk. Our asset
allocation strategy utilizes multiple investment managers in order to maximize the plan’s return while minimizing risk. We regularly
monitor our asset allocation, and senior financial management and the Finance Committee of the Board of Directors review performance
results at least semi-annually. In May 2007, we adjusted our target asset allocation for our qualified pension plans to the following: 40%
U.S. equities, 30% debt securities, 15% international equities, 5% balanced fund and 10% real estate. We plan to reallocate our plan
assets over a period of time, as deemed appropriate by senior financial management, to achieve our target asset allocation. The qualified
pension plan had the following asset allocations at September 27, 2009 and June 30, 2008:
 
U.S. equities 43% 39%
Debt securities 30 36
International equities 18 14
Balanced fund 6 6
Real estate 3 5
100% 100%
F-25