SunTrust 2011 Annual Report Download - page 170
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Please find page 170 of the 2011 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.Notes to Consolidated Financial Statements (Continued)
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factors that may influence them. To ensure broad diversification in the long-term investment portfolios among the major categories
of investments, asset allocation, as a percent of the total market value of the total long-term portfolio, is set with the target
percentages and ranges presented in the investment policy statement. Rebalancing occurs on a periodic basis to maintain the target
allocation, but normal market activity may result in deviations. At December 31, 2011 and 2010, there was no SunTrust common
stock held in the Pension Plans, nor were there any purchases during 2011 or 2010.
The basis for determining the overall expected long-term rate of return on plan assets considers past experience, current market
conditions and expectations on future trends. A building block approach is used that considers long-term inflation, real returns,
equity risk premiums, target asset allocations, market corrections (for example, narrowing of fixed income spreads between
corporate bonds and U.S. Treasuries) and expenses. Capital market simulations from internal and external sources, survey data,
economic forecasts and actuarial judgment are all used in this process.
The expected long-term rate of return on plan assets for the SunTrust Retirement Plan for Inactive Participants was 7.75% in 2011
and 8.00% in 2010. For the SunTrust Retirement Plan and the NCF Retirement Plan, the expected long-term rate of return on plan
assets was 7.75% through November 14, 2011 and 7.25% for the remainder of the year in 2011, and 8.00% in 2010. The expected
long-term rate of return is 7.00% for all qualified plans for 2012. The asset allocation for the Pension Plans and the target allocation
by asset category are as follows:
Asset Category
Equity securities
Debt securities
Cash equivalents
Total
Target
Allocation1
2012
50-75
25-50
0-5
%
Percentage of Plan Assets
at December 312
2011
61%
37
2
100%
2010
60%
39
1
100%
1 SunTrust Pension Plan only.
2 SunTrust and NCF Pension Plans.
The investment strategy for the Other Postretirement Benefit Plans is maintained separately from the strategy for the Pension
Plans. The Company’s investment strategy is to create a series of investment returns sufficient to provide for current and future
liabilities at a reasonable level of risk. Assets are diversified among equity and fixed income investments according to the asset
mix approved by the SunTrust Benefits Finance Committee which is presented in the target allocation table below. The pre-tax
expected long-term rate of return on these plan assets was 6.75% in 2011 and 2010. The 2012 pre-tax expected long-term rate of
return is 6.25%. At December 31, 2011 and 2010, there was no common stock held in the Other Postretirement Benefit Plans, nor
were there any purchases during 2011 or 2010.
The asset allocation for Other Postretirement Benefit Plans and the target allocation, by asset category, are as follows:
Asset Category
Equity securities
Debt securities
Cash equivalents
Total
Target
Allocation
2012
35-50
50-65
%
Percentage of Plan Assets
as of December 31
2011
50%
50
—
100%
2010
51%
48
1
100%