MetLife 2009 Annual Report Download - page 195

by the plan fiduciary. These Managers have portfolio management discretion over the purchasing and selling of securities and other
investment assets pursuant to the respective investment management agreements and guidelines established for each insurance separate
account. The assets of the qualified pension plans and postretirement medical plans (the “Invested Plans”) are well diversified across multiple
asset categories and across a number of different Managers, with the intent of minimizing risk concentrations within any given asset category
or with any given Manager.
The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with investment
policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters. Specifically, investment
policies are oriented toward (i) maximizing the Invested Plan’s funded status; (ii) minimizing the volatility of the Invested Plan’s funded status;
(iii) generating asset returns that exceed liability increases; and (iv) targeting rates of return in excess of a custom benchmark and industry
standards over appropriate reference time periods. These goals are expected to be met through identifying appropriate and diversified asset
classes and allocations, ensuring adequate liquidity to pay benefits and expenses when due and controlling the costs of administering and
managing the Invested Plan’s investments. Independent investment consultants are periodically used to evaluate the investment risk of
Invested Plan’s assets relative to liabilities, analyze the economic and portfolio impact of various asset allocations and management
strategies and to recommend asset allocations.
Certain international subsidiaries sponsor defined benefit plans that cover employees and sales representatives who meet specified
eligibility requirements. Pension benefits are provided utilizing either a traditional formula or cash balance formula, similar to the U.S. plans
discussed above. The investment objectives are also similar, subject to local regulations. Generally, these international pension plans invest
directly in high quality equity and fixed maturity securities.
Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile of an asset or asset
class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure to an asset, asset class, interest rates
or any other financial variable. Derivatives are also prohibited for use in creating exposures to securities, currencies, indices or any other
financial variable that are otherwise restricted.
The following tables summarize the actual weighted average asset allocation by major asset class for the Invested Plans.
Asset Class Defined Benefit Plan Postretirement Medical Postretirement Life
December 31, 2009
Actual Asset Allocation
Equity (target range): 25% to 45% 50% to 80% —
Largecapgrowth ........................ 2% 10% —
Largecapvalue ......................... — 26 —
Largecapcore.......................... 23 4 —
Smallcapgrowth ........................ 3 — —
Smallcapcore.......................... 2 11 —
Developedinternational .................... 7 11 —
Totalequity........................... 37% 62% —
Fixed income (target range): 35% to 55% 10% to 40% —
Longduration(governmentandcredit)........... 37% —% —
Core................................. 6 18 —
U.S.governmentandagencies ............... — 3 —
Mortgage-backedsecurities ................. — 4 —
Directlyheldbonds ....................... 1 9 —
Insurancegeneralaccount .................. 2 — 100%
Short-termandcash ...................... 1 3 —
Totalfixedincome....................... 47% 37% 100%
Alternatives (target range): 10% to 25% 0% to 15% —
Multi-strategyhedgefunds .................. 4% 1% —
Realestate ............................ 5 — —
Privateequity........................... 7 — —
Totalalternatives ....................... 16% 1% —
Totalinvestments.......................... 100% 100% 100%
Expected Future Contributions and Benefit Payments
It is the Subsidiaries’ practice to make contributions to the qualified pension plan to comply with minimum funding requirements of ERISA.
In accordance with such practice, no contributions were required for the years ended December 31, 2009 or 2008. No contributions will be
required for 2010. The Subsidiaries made no discretionary contributions to the qualified pension plan during the year ended December 31,
2009. The Subsidiaries made discretionary contributions of $300 million to the qualified pension plan during the year ended December 31,
2008. The Subsidiaries expect to make additional discretionary contributions of $150 million in 2010.
F-111MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)