TJ Maxx 2015 Annual Report Download - page 87

Pension plan assets are reported at fair value. Investments in equity securities traded on a national securities
exchange are valued at the composite close price, as reported in the Wall Street Journal, as of the financial statement
date. This information is provided by the independent pricing sources.
Short-term investments are primarily cash related to funding of the plan which had yet to be invested as of
balance sheet dates.
Certain corporate and government bonds are valued at the closing price reported in the active market in which
the bond is traded. Other bonds are valued based on yields currently available on comparable securities of issuers
with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued
under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar
instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks.
All bonds are priced by independent pricing sources.
Assets measured at net asset value include investments in limited partnerships which are stated at the fair value
of the plan’s partnership interest based on information supplied by the partnerships as compared to financial
statements of the limited partnership or other fair value information as determined by management, cash equivalents
or short-term investments are stated at cost which approximates fair value, fair value of common/collective trusts is
determined based on net asset value as reported by their fund managers.
The following is a summary of TJX’s target allocation guidelines for plan assets along with the actual allocation of
plan assets as of the valuation date for the fiscal years presented:
Actual Allocation for
Fiscal Year Ended
Target Allocation
January 30,
2016
January 31,
2015
Equity securities 50% 40% 44%
Fixed income 50% 55% 45%
All other – primarily cash — 5% 11%
TJX employs a total return investment approach whereby a mix of equities and fixed income investments is used
to seek to maximize the long-term return on plan assets with a prudent level of risk. Risks are sought to be mitigated
through asset diversification and the use of multiple investment managers. Investment risk is measured and
monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and
periodic asset/liability studies.
TJX also sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code for all eligible
U.S. employees and a similar type of plan for eligible employees in Puerto Rico. Assets under the plans totaled
$1,314.8 million as of December 31, 2015 and $1,275.4 million as of December 31, 2014, and are invested in a variety
of funds. Employees may contribute up to 50% of eligible pay, subject to limitations. TJX matches employee
contributions, up to 5% of eligible pay, including a basic match at rates of 25% or 75% (based upon date of hire and
other eligibility criteria) plus a discretionary match, generally up to 25%, based on TJX’s performance. Eligible
employees are automatically enrolled in the U.S. plan at a 2% deferral rate, unless the employee elects otherwise. TJX
contributed $30.8 million in fiscal 2016, $31.2 million in fiscal 2015 and $29.7 million in fiscal 2014 to these employee
savings plans. The plans include a TJX stock fund in which participants could invest a portion of TJX’s matching
contribution. The TJX stock fund was closed to new investments, other than reinvestment of dividends, at the end of
calendar 2015. The TJX stock fund represented 7.1% of plan assets at December 31, 2015, 7.4% of plan assets at
December 31, 2014 and 8.3% of plan investments at December 31, 2013.
TJX also has a nonqualified savings plan (the Executive Savings Plan) for certain U.S. employees. TJX matches
employee deferrals at various rates which amounted to $1.3 million in fiscal 2016, $3.5 million in fiscal 2015 and $2.4
million in fiscal 2014. Although the plan is unfunded, in order to help meet its future obligations TJX transfers an
amount generally equal to employee deferrals and the related company match to a separate “rabbi” trust. The trust
assets, which are invested in a variety of mutual funds, are included in other assets on the balance sheets.
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