Motorola 2005 Annual Report Download - page 112

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105
The funded status of the plan is as follows.
December 31
2005
2004
Change in benefit obligation:
Benefit obligation at January 1 $ 544 $ 535
Service cost 910
Interest cost 30 46
Plan amendments 1(17)
Curtailment Ì(22)
Actuarial (gain) loss (36) 53
Benefit payments (52) (61)
Benefit obligation at December 31 496 544
Change in plan assets:
Fair value at January 1 188 218
Return on plan assets 15 18
Company contributions 43 Ì
Benefit payments made with plan assets (34) (48)
Fair value at December 31 212 188
Funded status of the plan (284) (356)
Unrecognized net loss 230 272
Unrecognized prior service cost (12) (16)
Accrued retiree health care cost $ (66) $(100)
In connection with the spin-off of Freescale Semiconductor, post-retirement health care benefit obligations
relating to eligible former and active vested Freescale Semiconductor employees on December 2, 2004 (Spin-off
Date) and active Freescale Semiconductor employees who vest within the three year period following the Spin-off
Date, were transferred to Freescale Semiconductor. Benefit obligations transferred were $217 million with
$99 million of unrecognized net losses also transferred to Freescale Semiconductor. Such amounts have been
excluded from the Motorola amounts for both periods presented above. Additionally under the terms of the
Employee Matters Agreement entered into between Motorola and Freescale Semiconductor, Motorola is obligated
to transfer to Freescale Semiconductor $68 million in cash or Plan assets plus approximately $7 million of
investment returns earned on these plan assets as of December 31, 2005, as permitted by law without adverse tax
consequences to Motorola. This obligation is included in Accrued Liabilities in the Company's consolidated balance
sheets.
The Company has adopted an investment policy for plan assets designed to meet or exceed the expected rate
of return on plan assets assumption. To achieve this, the plan retains professional investment managers that invest
plan assets in equity and fixed income securities and cash. The Company has the following target mixes for these
asset classes, which are readjusted at least quarterly, when an asset class weighting deviates from the target mix,
with the goal of achieving the required return at a reasonable risk level as follows:
Target Mix
Asset Category
2005
2004
Equity securities 75% 75%
Fixed income securities 24% 24%
Cash and other investments 1% 1%
The weighted-average asset allocation for plan assets at December 31, 2005 and 2004 by asset categories were
as follows:
Actual Mix
Asset Category
2005
2004
Equity securities 75% 76%
Fixed income securities 22 22
Cash and other investments 32
100% 100%