Tecumseh Products 2014 Annual Report Download - page 52

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50
In 2014, we adopted a new mortality base table and projection scale based on guidance published by the Society of Actuaries.
Prior to 2014, for the U.S. Pension Plans, we used the PPA static mortality tables. The effect of adopting this new mortality
table increased our pension benefit obligation by $4.9 million.
The expected long-term return on assets was determined for each class of assets in which the plan is invested based on
consultation with the company's investment advisers. That information is combined with the target asset allocation, where
applicable, to determine our best estimate of future returns.
Plan Assets
Our primary investment objectives are 1) preservation of principal, 2) minimizing the volatility of our assets and liabilities from
changes in interest rates and market conditions, and 3) providing liquidity to meet benefit payments and expenses. Our
portfolio primarily consists of fixed income obligations rated investment grade, (i.e., “Baa3/BBB” or better by Moody’s or
Standard & Poor’s), respectively, and international and domestic equities.
The following tables provide pension plan assets based on nature and risks as of December 31, 2014 and 2013 (See Note 13,
“Fair Value Measurements”, for additional information):
Plan Assets at December 31, 2014
(in millions)
Total Fair Value
Measurement
Quoted Prices in
Active Markets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs (Level 3)
Assets:
Cash and cash equivalents $ 4.1 $ 4.1 $ — $ —
Mutual Funds:
U.S. large cap 19.1 19.1 — —
U.S. small cap 11.9 11.9 — —
International growth 13.7 13.7 — —
Fixed Income Securities:
Corporate bonds 67.2 — 67.2 —
U.S. Treasury and Government bonds 16.1 16.1 — —
U.S. state and political subdivision bonds 4.5 — 4.5 —
Other fixed income securities 7.5 — 7.5 —
Other:
India Government backed funds 2.1 2.1 — —
Total $ 146.2 $ 67.0 $ 79.2 $ —