National Grid 2008 Annual Report Download - page 320

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 63314
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 114
Description: EXH 2(B).6.1
0/1718.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/718/1*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 63314
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 114 Description: EXH 2(B).6.1
0/1718.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/718/1*
an average annual 30-year Treasury bond yield. Non-union employees hired by New England-based companies prior to
July 15, 2002 and New England-based union employees
g
enerally participate in the historic final avera
g
e pay pension plan
desi
g
ns. In addition, a lar
g
e number of employees hired by Nia
g
ara Mohawk prior to July 1998 are cash balance desi
g
n
participants who receive a larger benefit if so yielded under pre-cash balance conversion final avera
g
e pay formula provisions.
Employees hired by Nia
g
ara Mohawk followin
g
the Au
g
ust 1998 cash balance desi
g
n conversion participate under cash
balance design provisions only.
Supplemental nonqualified, non-contributory executive retirement pro
g
rams provide additional defined pension benefits for
certain executives.
The Company and its subsidiaries provide postretirement benefits other than pensions (PBOPs). PBOPs include health care
and life insurance covera
g
e to eli
g
ible retired employees. Eli
g
ibility is based on certain a
g
e and len
g
th of service requirements
and in some cases retirees must contribute to the cost of their coverage.
Funding Policy
Following the inception of the Pension Protection Act of 2006 (the PPA), the Company’s fundin
g
policy is to contribute amounts
sufficient to reach 100 percent of the Fundin
g
Tar
g
et under the PPA by 2010. In New York, the fundin
g
policy is determined
largely by the Company’s settlement a
g
reements with the PSC and the amounts recovered in rates. However, the contribution
in New England and New York for any one year will not be less than the minimum amount required under the PPA.
Plan Assets
The target asset allocations for the benefit plans at March 31 are:
The percentage of the fair value of total plan assets at March 31 is:
The Company manages benefit plan investments to minimize the long-term cost of operatin
g
the Plans, with a reasonable level
of risk. Risk tolerance is determined as a result of a periodic asset/liability study
F-29
Pension Benefits Non-Union PROP Union PROP
2007 2006 2007 2006 2007 2006
U.S. e
q
uities 43 %42 %33 %33 % 50 %51 %
Global equities (including U.S.) 6 % 6 % 0 % 0 % 0 % 0 %
Non-U.S. e
q
uities 12 %12 %17 %17 % 23 %23 %
Fixed income 36 % 35 % 50 % 50 % 27 % 26 %
Private e
q
uit
y
and other 3 %5 %0 %0 % 0 %0 %
100 % 100 % 100 % 100 % 100 % 100 %
Pension Benefits Non-Union PROP Union PROP
2007 2006 2007 2006 2007 2006
U.S. e
q
uities 45 %45 %34 %33 % 50 %51 %
Global equities (including U.S.) 6 % 8 % 0 % 0 % 0 % 0 %
Non-U.S. equities 12 % 13 % 18 % 18 % 24 % 24 %
Fixed income 34 % 32 % 48 % 49 % 26 % 25 %
Private equity and other 3 % 2 % 0 % 0 % 0 % 0 %
100 % 100 % 100 % 100 % 100 % 100 %