Texas Instruments 2007 Annual Report Download - page 34

32 TEXAS INSTRUMENTS 2007 ANNUAL REPORT
Our rate of return assumption for the U.S. defined benefit plan reflects a decision to move gradually over several years to an asset
allocation policy with less emphasis on equity investments. This allocation move is designed to better match the plan’s assets with the
liability structure as the plan matures.
The table below shows target allocation ranges for the plans that hold a substantial majority of the defined benefit assets. The asset
allocations for the retiree health care benefit plan are generally intended to represent the long-term targeted mix rather than a current
mix.
Asset Category U.S. Defined Benefit U.S. Retiree Health Care Non-U.S. Defined Benefit
Equity securities...................................................... 50% - 75% 75% 30% - 60%
Fixed income securities and cash......................................... 25% - 50% 25% 40% - 70%
For the defined benefit plans, it is intended that the investments will be rebalanced when the allocation is not within the target range.
Additional contributions are invested consistent with the target ranges and may be used to rebalance the portfolio. The investment
allocations and individual investments are chosen with regard to the duration of the obligations of the plan. A portion of the retiree
health care benefit plan assets are invested in an account within the pension trust and are invested in a like manner as the other
pension assets. The majority of the assets in the retiree health care benefit plan are invested in a series of Voluntary Employee Benefit
Association (VEBA) trusts. For tax efficiency, the investments in the VEBA trusts are not rebalanced but additional contributions to the
trusts may be used to reallocate the portfolio.
Weighted average asset allocations at December 31, are as follows:
U.S. Defined
Benefit U.S. Retiree Health Care Non-U.S. Defined Benefit
Asset Category 2007 2006 2007 2006 2007 2006
Equity securities....................................... 56% 62% 67% 69% 49% 52%
Fixed income securities and cash.......................... 44% 38% 33% 31% 51% 48%
There are no significant restrictions on the amount or nature of the investments that may be acquired or held by the plans. None of the
plan assets related to the defined benefit pension plans and retiree health care benefit plan are directly invested in TI common stock.
Contributions to the plans meet or exceed all minimum funding requirements. We expect to contribute approximately $50 million to U.S.
retirement plans and approximately $70 million to non-U.S. retirement plans in 2008.
The following table projects the benefits expected to be paid to participants from the plans in the following ten years. The majority of
the payments will be paid from plan assets and not company assets.
U.S. Defined
Benefit U.S. Retiree Health Care Medicare Subsidy Non-U.S. Defined Benefit
2008 ........................................................... $155 $38 $(5) $ 50
2009 ........................................................... 128 40 (5)50
2010 ........................................................... 120 42 (6)56
2011 ........................................................... 82 44 (6)57
2012 ........................................................... 74 45 (7)61
2013–2017 ...................................................... 294 228 (25) 356