MetLife 2007 Annual Report Download - page 69

Target allocations of assets are determined with the objective of maximizing returns and minimizing volatility of net assets through
adequate asset diversification. Adjustments are made to target allocations based on an assessment of the impact of economic factors and
market conditions.
Other Postretirement Benefit Plan Assets
Substantially all assets of the other postretirement benefit plans are invested within life insurance and reserve contracts issued by the
Subsidiaries. The majority of assets are held in separate accounts established by the Subsidiaries. The account values of assets held with
the Subsidiaries were $1,125 million and $1,116 million as of December 31, 2007 and 2006, respectively. The terms of these contracts are
consistent in all material respects with those the Subsidiaries offer to unaffiliated parties that are similarly situated.
The valuation of separate accounts and the investments within such separate accounts invested in by the other postretirement plans
are similar to that described in the preceding section on pension plans.
The following table summarizes the actual and target weighted-average allocations of other postretirement benefit plan assets within the
separate accounts:
2007 2006 2008
Weighted
Average
Actual
Allocation
Weighted
Average
Targe t
Allocation
December 31,
Asset Category
Equitysecurities ................................................... 37% 37% 30%-45%
Fixedmaturities.................................................... 58% 57% 45%-70%
Other(RealEstateandAlternativeinvestments) ............................... 5% 6% 0%-10%
Total.......................................................... 100% 100%
Target allocations of assets are determined with the objective of maximizing returns and minimizing volatility of net assets through
adequate asset diversification. Adjustments are made to target allocations based on an assessment of the impact of economic factors and
market conditions.
Funding and Cash Flows of Pension and Other Postretirement Benefit Plan Obligations
Pension Plan Obligations
It is the Subsidiaries’ practice to make contributions to the qualified pension plans to comply with minimum funding requirements of
ERISA, as amended. In accordance with such practice, no contributions were required for the years ended December 31, 2007 or 2006.
No contributions will be required for 2008. The Subsidiaries did not make any discretionary contributions to the qualified pension plans
during the year ended December 31, 2007. During the year ended December 31, 2006, the Subsidiaries made discretionary contributions
of $350 million. The Subsidiaries expect to make additional discretionary contributions of $150 million in 2008.
Benefit payments due under the non-qualified pension plans are funded from the Subsidiaries’ general assets as they become due
under the provision of the plans. These payments totaled $50 million and $38 million for the years ended December 31, 2007 and 2006,
respectively. These benefit payments are expected to be at approximately the same level in 2008.
Gross pension benefit payments for the next ten years, which reflect expected future service as appropriate, are expected to be as
follows:
Pension
Benefits
(In millions)
2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 360
2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 373
2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 383
2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 397
2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 413
2013-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,288
Other Postretirement Benefit Plan Obligations
Other postretirement benefits represent a non-vested, non-guaranteed obligation of the Subsidiaries and current regulations do not
require specific funding levels for these benefits. While the Subsidiaries have funded such plans in advance, it has been the Subsidiaries’
practice to primarily use their general assets, net of participants’ contributions, to pay claims as they come due in lieu of utilizing plan
assets. Total payments equaled $174 million and $152 million for the years ended December 31, 2007 and 2006, respectively.
The Subsidiaries’ expect to make contributions of $116 million, net of participants’ contributions, towards the other postretirement plan
obligations in 2008. As noted previously, the Subsidiaries expect to receive subsidies under the Prescription Drug Act to partially offset
such payments.
65MetLife, Inc.