Motorola 2008 Annual Report Download - page 119

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The funded status of the plan is as follows:
2008 2007
Change in benefit obligation:
Benefit obligation at January 1 $ 395 $ 460
Service cost 67
Interest cost 26 23
Actuarial (gain) loss 35 (62)
Benefit payments (33) (33)
Benefit obligation at December 31 429 395
Change in plan assets:
Fair value at January 1 251 243
Return on plan assets (73) 20
Company contributions 16 15
Benefit payments made with plan assets (26) (27)
Fair value at December 31 168 251
Funded status of the plan (261) (144)
Unrecognized net loss 223 98
Unrecognized prior service cost (5) (8)
Accrued postretirement health care cost $ (43) $ (54)
Components of accrued postretirement health care cost:
Years Ended December 31 2008 2007
Non-current liability $(261) $(144)
Deferred income taxes 101 55
Non-owner changes to equity 117 35
Accrued postretirement health care cost $ (43) $ (54)
It is estimated that the net periodic cost for the Postretirement Health Care Benefit Plan in 2009 will include
amortization of the unrecognized net loss and prior service costs, currently included in Non-owner changes in
equity, of $5 million.
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 uses long-term historical actual return
experience with consideration of the expected investment mix of the plans’ assets, as well as future estimates of
long-term investment returns, to develop its expected rate of return assumption used in calculating the net periodic
pension cost and the net retirement healthcare expense. 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 2008 2007
Target Mix
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, 2008 and 2007 by asset categories were
as follows:
Asset Category 2008 2007
Actual Mix
Equity securities 64% 74%
Fixed income securities 32% 25%
Cash and other investments 4% 1%
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