LensCrafters 2011 Annual Report Download - page 239

| 163 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
Asset Class as a Percent of Total Assets
Asset category Minimum Maximum
Large Cap US Equity 37% 43%
Small Cap US Equity 8% 12%
International Equity 13% 17%
Fixed Income 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
benefit payments from, the pension plan trusts. The Lux Pension Plan’s investment
policy intends that any divergence from the targeted allocations 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, taking into account
current market conditions. During 2011, the Committee reviewed the Lux Pension
Plan’s asset allocation monthly and if the allocation was not within the above ranges,
the Committee re-balanced the allocations if appropriate based on current market
conditions.
Plan assets are invested in diversified portfolios consisting of an array of asset classes
within the above target allocations and using a combination of active and passive
strategies. Passive strategies involve investment in an exchange-traded fund that closely
tracks an index fund. Active strategies employ multiple investment management firms.
Risk is controlled through diversification among asset classes, managers, styles, market
capitalization (equity investments) and individual securities. Certain transactions and
securities are prohibited from being held in the Lux Pension Plan’s trusts, such as
ownership of real estate other than real estate investment trusts, commodity contracts,
and American Depositary Receipts (“ADR”) or common stock of the Group. 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.
Quoted market prices are used to measure the fair value of plan assets, when available. If
quoted market prices are not available, the inputs utilized by the fund manager to derive
net asset value are observable and no significant adjustments to net asset value were
necessary.
Contributions – US Holdings expects to contribute Euro 48,551 thousand to its pension
plan and Euro 565 thousand to the SERP in 2012.
Other Benefits – US Holdings provides certain post-employment medical, disability and life
insurance benefits. The Group’s accrued liability related to this obligation as of December
31, 2011 and 2010 was Euro 1,271 thousand and Euro 1,880 thousand, respectively, and is
included in other long-term liabilities in the consolidated statement of financial position.