SunTrust 2008 Annual Report Download - page 145

Download and view the complete annual report

Please find page 145 of the 2008 SunTrust annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 188

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188

SUNTRUST BANKS, INC.
Notes to Consolidated Financial Statements (Continued)
The fair value of plan assets (in thousands) for the retirement plans is $1,919,349 and $2,287,322 at the end of 2008 and
2007, respectively. The expected long-term rate of return on these plan assets was 8.25% and 8.50% in 2008 and 2007,
respectively. The expected long-term rate of return is 8.00% for 2009, based on a ten-year capital market projection of the
current target asset allocation. The asset allocation for the Retirement Plans and the target allocation, by asset category, are as
follows:
Target
Allocation1
Percentage of Plan Assets at
December 312
Asset Category 2009 2008 2007
Equity securities 65 % 62 % 75 %
Debt securities 35 35 24
Cash equivalents -31
Total 100 % 100 % 100 %
1SunTrust Retirement Plan only.
2SunTrust and NCF Retirement Plans.
The SunTrust Benefits Plan Committee, which includes several members of senior management, establishes investment
policies and strategies and formally monitors the performance of the funds on a quarterly basis. The Company’s investment
strategy with respect to pension assets is to invest the assets in accordance with the Employee Retirement Income Security
Act and fiduciary standards. The long-term primary objectives for the Retirement Plans are to provide for a reasonable
amount of long-term growth of capital (both principal and income), without undue exposure to risk and to enable the plans to
provide their specific benefits to participants thereof. Rebalancing occurs on a periodic basis to maintain the target allocation,
but normal market activity may result in deviations. At December 31, 2008 and 2007, there was no SunTrust common stock
held in the Retirement Plans.
The investment strategy for the Other Postretirement Benefit Plans is maintained separately from the strategy for the
Retirement Plans. The Company’s investment strategy is to create a stream of investment return sufficient to provide for
current and future liabilities at a reasonable level of risk. The pre-tax expected long-term rate of return on these plan assets
was 7.5% in 2008 and in 2007. The 2009 pre-tax expected long-term rate of return is 7.25%.
The asset allocation for Other Postretirement Benefit Plans and the target allocation, by asset category, are as follows:
Target
Allocation
Percentage of Plan Assets at
December 31
Asset Category 2009 2008 2007
Equity securities 35-50 % 41 % 50 %
Debt securities 50-65 44 50
Cash equivalents -15 -
Total 100 % 100 %
Equity securities do not include SunTrust common stock for the Other Postretirement Benefit Plans.
Funded Status
The funded status of the plans, as of December 31, was as follows:
Pension Benefits Other Postretirement Benefits
(Dollars in thousands) 2008 2007 2008 2007
Fair value of plan assets $1,919,349 $2,287,322 $147,167 $162,881
Benefit obligations (1,922,252) (1,841,153) (204,742) (200,723)
Funded status ($2,903) $446,169 ($57,575) ($37,842)
133