OfficeMax 2014 Annual Report Download - page 110
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Table of Contents
Included in Accumulated other comprehensive income were deferred losses of $1 million and $8 million at December 27, 2014 and December 28, 2013,
respectively. The deferred loss is not expected to be amortized into income during 2015.
Assumptions
Assumptions used in calculating the funded status included:
2013 2012
Expected long-term rate of return on plan assets 6.33% 6.00%
Discount rate 4.60% 4.40%
Inflation 3.40% 3.00%
The long-term rate of return on assets assumption has been derived based on long-term UK government fixed income yields, having regard to the proportion
of assets in each asset class. The funds invested in equities have been assumed to return 4.0% above the return on UK government securities of appropriate
duration. Funds invested in corporate bonds are assumed to return equal to a 15 year AA bond index. Allowance is made for expenses of 0.5% of assets.
Plan Assets
The allocation of Plan assets is as follows:
2013
Cash
Equity securities
Fixed-income securities
Total
A committee, comprised of representatives of the Company and of this plan, is responsible for establishing and overseeing the implementation of the
investment policy for this plan. The plan’s investment policy and strategy are to ensure assets are available to meet the obligations to the beneficiaries and to
adjust plan contributions accordingly. The plan trustees are also committed to reducing the level of risk in the plan over the long term, while retaining a
return above that of the growth of liabilities. The investment strategy is based on plan funding levels, which determine the asset target allocation into
matching or growth investments. Matching investments are intended to provide a return similar to the increase in the plan liabilities. Growth investments are
assets intended to provide a return in excess of the increase in liabilities. At December 27, 2014, the asset target allocation was in accordance with the
investment strategy. Asset-class allocations within the ranges are continually evaluated and adjusted based on expectations for future returns, the funded
position of the plan and market risks.
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