PACCAR 2011 Annual Report Download - page 67

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The Company funds its pensions in accordance with applicable employee benefit and tax laws. The Company contributed
$84.7 to its pension plans in 2011 and $61.8 in 2010. The Company expects to contribute in the range of $100.0 to $150.0
to its pension plans in 2012, of which $14.2 is estimated to satisfy minimum funding requirements. Annual benefits
expected to be paid beginning January 1, 2012 are $63.6, $66.6, $72.0, $76.0, $81.8 and for the five years thereafter,
a total of $474.1.
Plan assets are invested in global equity and debt securities through professional investment managers with the
objective to achieve targeted risk adjusted returns and maintain liquidity sufficient to fund current benefit
payments. Typically, each defined benefit plan has an investment policy that includes a target for asset mix
including maximum and minimum ranges for allocation percentages by investment category. The actual allocation
of assets may vary at times based upon rebalancing policies and other factors. The Company periodically assesses
the target asset mix by evaluating external sources of information regarding the long-term historical return,
volatilities and expected future returns for each investment category. In addition, the long-term rates of return
assumptions for pension accounting are reviewed annually to ensure they are appropriate. Target asset mix and
forecast long-term returns by asset category are considered in determining the assumed long-term rates of return,
although historical returns realized are given some consideration.
The following information details the allocation of plan assets by investment type. See Note P for definitions of fair
value levels.
At December 31, 2011 TARGET LEVEL 1 LEVEL 2 TOTAL
Equities:
U.S. equities $ 456.3 $ 456.3
Global equities 450.5 450.5
Total equities 50-70% 906.8 906.8
Fixed income:
U.S. fixed income $224.5 196.7 421.2
Non-U.S. fixed income 183.1 183.1
Total fixed income 30-50% 224.5 379.8 604.3
Cash and other 4.6 34.2 38.8
Total plan assets $ 229.1 $ 1,320.8 $ 1,549.9
At December 31, 2010 TARGET LEVEL 1 LEVEL 2 TOTAL
Equities:
U.S. equities $ 38.1 $ 431.3 $ 469.4
Global equities 394.8 394.8
Total equities 50-70% 38.1 826.1 864.2
Fixed income:
U.S. fixed income 208.5 172.1 380.6
Non-U.S. fixed income 171.0 171.0
Total fixed income 30-50% 208.5 343.1 551.6
Cash and other 2.7 26.9 29.6
Total plan assets $ 249.3 $ 1,196.1 $ 1,445.4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011, 2010 and 2009 (currencies in millions)