Motorola 2009 Annual Report Download - page 114

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106
The funded status of the plan is as follows:
2009 2008
Change in benefit obligation:
Benefit obligation at January 1 $ 429 $ 395
Service cost 66
Interest cost 27 26
Actuarial (gain) loss 32 35
Benefit payments (33) (33)
Benefit obligation at December 31 461 429
Change in plan assets:
Fair value at January 1 168 251
Return on plan assets 35 (73)
Company contributions —16
Benefit payments made with plan assets (29) (26)
Fair value at December 31 174 168
Funded status of the plan (287) (261)
Unrecognized net loss 231 223
Unrecognized prior service cost (3) (5)
Accrued postretirement health care cost $ (59) $ (43)
Components of accrued postretirement health care cost:
Years Ended December 31 2009 2008
Non-current liability $(287) $(261)
Deferred income taxes 101 101
Accumulated other comprehensive income (loss) 127 117
Accrued postretirement health care cost $ (59) $ (43)
It is estimated that the net periodic cost for the Postretirement Health Care Benefit Plan in 2010 will include
amortization of the unrecognized net loss and prior service costs, currently included in Accumulated other
comprehensive income (loss), of $8 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 cost and the net retirement healthcare expense. The Company has the following target mixes for these
asset classes, which are readjusted at least periodically, when an asset class weighting deviates from the target
mix, with the goal of achieving the required return at a reasonable risk level:
Target Mix
Asset Category 2009 2008
Equity securities 65% 75%
Fixed income securities 34% 24%
Cash and other investments 1% 1%