OfficeMax 2014 Annual Report Download - page 106
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Table of Contents
Plan Assets
The allocation of pension plan assets by category at year-ends is as follows:
Money market funds 3%
Equity securities 8%
Fixed-income securities 53%
Equity mutual funds 36%
Other —
100%
A retirement funds investment committee is responsible for establishing and overseeing the implementation of the investment policy for the Company’s
pension plans. The investment policy is structured to optimize growth of the pension plan trust assets, while minimizing the risk of significant losses, in order
to enable the plans to satisfy their benefit payment obligations over time. The Company uses benefit payments and Company contributions as its primary
rebalancing mechanisms to maintain the asset class exposures within the guideline ranges established under the investment policy.
The current asset allocation guidelines set forth an U.S. equity range of 9% to 19%, an international equity range of 6% to 16%, a global equity range of 4%
to 14% and a fixed-income range of 61% to 71%. Asset-class positions within the ranges are continually evaluated and adjusted based on expectations for
future returns, the funded position of the plans and market risks. Occasionally, the Company may utilize futures or other financial instruments to alter the
pension trust’s exposure to various asset classes in a lower-cost manner than trading securities in the underlying portfolios.
Generally, quoted market prices are used to value pension plan assets. Equities, some fixed-income securities, publicly traded investment funds, and U.S.
government obligations are valued by reference to published market prices. Investments in certain restricted stocks are valued at the quoted market price of
the issuer’s unrestricted common stock less an appropriate discount. If a quoted market price for unrestricted common stock of the issuer is not available,
restricted common stocks are valued at a multiple of current earnings less an appropriate discount. The multiple chosen is consistent with multiples of similar
companies based on current market prices.
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