Motorola 2007 Annual Report Download - page 109

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flows to pay the benefit obligation when due. The long-term rates of return on plan assets represents an estimate
of long-term returns on an investment portfolio consisting of a mixture of equities, fixed income, cash and other
investments similar to the actual investment mix. In determining the long-term return on plan assets, the Company
considers long-term rates of return on the asset classes (both historical and forecasted) in which the Company
expects the plan funds to be invested.
Weighted average actuarial assumptions used to determine costs for the plans were as follows:
December 31 U.S. Non U.S. U.S. Non U.S.
2007 2006
Discount rate 6.00% 4.81% 6.00% 4.62%
Investment return assumption (Regular Plan) 8.50% 6.74% 8.50% 6.27%
Investment return assumption (Officers’ Plan) 6.00% N/A 6.00% N/A
Weighted average actuarial assumptions used to determine benefit obligations for the plans were as follows:
December 31 U.S. Non U.S. U.S. Non U.S.
2007 2006
Discount rate 6.75% 5.68% 6.00% 4.81%
Future compensation increase rate (Regular Plan) 4.00% 4.34% 4.00% 4.18%
Future compensation increase rate (Officers’ Plan) 0.00% N/A 0.00% N/A
The accumulated benefit obligations for the plans were as follows:
December 31 Regular
Officers’
and
MSPP Non
U.S. Regular
Officers’
and
MSPP Non
U.S.
2007 2006
Accumulated benefit obligation $4,694 $118 $1,608 $4,969 $125 $1,690
The Company has adopted a pension investment policy designed to meet or exceed the expected rate of return
on plan assets assumption. To achieve this, the pension plans retain professional investment managers that invest
plan assets in equity and fixed income securities and cash. In addition, some plans invest in insurance contracts.
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:
Asset Category 2007 2006
Target Mix
Equity securities 71% 75%
Fixed income securities 27% 24%
Cash and other investments 2% 1%
The weighted-average pension plan asset allocation at December 31, 2007 and 2006 by asset categories was as
follows:
Asset Category 2007 2006
Actual Mix
Equity securities 70% 75%
Fixed income securities 27% 24%
Cash and other investments 3% 1%
Within the equity securities asset class, the investment policy provides for investments in a broad range of
publicly-traded securities including both domestic and international stocks. Within the fixed income securities asset
class, the investment policy provides for investments in a broad range of publicly-traded debt securities ranging
from U.S. Treasury issues, corporate debt securities, mortgage and asset-backed securities, as well as international
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