LensCrafters 2009 Annual Report Download - page 88

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> 86 | ANNUAL REPORT 2009
Asset category Asset Class as a Percent of Total Assets
Total Assets Maximum
Large Cap US Equity 37% 43%
Small Cap US Equity 8% 12%
International Equity 13% 17%
Debt Securities 32% 38%
Cash and Equivalents 0% 5%
The actual allocation percentages at any given time may vary from the targeted amounts due to changes
in stock and bond valuations as well as timing of contributions to, and benefi t payments from, the pen-
sion plan trusts. The Lux Plan’s investment policy intends that any divergence from the targeted alloca-
tions should be of a short duration, but the appropriate duration of the divergence will be determined by
the Investment Subcommittee of the Luxottica Group Employee Retirement Income Security Act of 1974
("ERISA") Plans Compliance and Investment Committee with the advice of investment managers and/or
investment consultants based on current market conditions. During 2009, the Committee reviewed the
Lux Plan’s asset allocation monthly and if the allocation was not within the above ranges, the Committee
re-balanced the allocations based on current market conditions.
Plan assets are invested in diversifi ed portfolios consisting of an array of asset classes within the above
target allocations and using a combination of active strategies. Active strategies employ multiple invest-
ment management fi rms. Risk is controlled through diversifi cation among asset classes, managers, styles,
market capitalization (equity investments), and individual securities. Certain transactions and securities are
not authorized to be conducted or held in the pension trusts, such as ownership of real estate other than
real estate investment trusts, commodity contracts, and American Depositary Receipts ("ADRs") or com-
mon stock of the Company. Risk is further controlled both at the asset class and manager level by assigning
benchmarks and excess return targets. The investment managers are monitored on an ongoing basis to
evaluate performance against the established market benchmarks and return targets.
The defi ned benefi t pension plans have an investment policy that was developed to serve as a manage-
ment tool to provide the framework within which the fi duciary’s investment decisions are made, establish
standards to measure investment manager’s performance, outline the roles and responsibilities of the vari-
ous parties involved, and describe the ongoing review process.
Quoted market prices are used to measure the fair value of plan assets, when available. Plan assets clas-
sifi ed as Level 2 measurements use net asset value of the fund to measure fair value. For these measure-
ments, the inputs utilized by the fund manager to derive net asset value are observable and no signifi cant
adjustments to net asset value were necessary. Plan assets classifi ed as Level 3 measurements use other
non-observable inputs. The Plan’s investment in these funds is expressed as a percentage of the fund’s
capital. The fair values of the Company’s pension plan assets at December 31, 2009 by asset category are
as follows (amounts in thousands of US$):