The Hartford 2008 Annual Report Download - page 462

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
17. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans (continued)
Plan Assets
The Company’s defined benefit pension plan weighted average asset allocation at December 31, 2008 and 2007, and target
allocation by asset category are provided below. At the end of 2007, the Company changed the target allocation for its
defined benefit pension plan assets. The Company intends to migrate its asset mix to the target allocation over a two year
period.
Percentage of Pension Plan Assets
Fair Value at December 31, Target
2008 2007 Allocation
Equity securities 36% 55% 20% – 40%
Fixed income securities 58% 43% 50% – 70%
Alternative Assets 6% 2% 25% maximum
Total 100% 100%
There was no Company common stock included in the Plan’s assets as of December 31, 2008 and 2007.
The Company’s other postretirement benefit plans’ weighted average asset allocation at December 31, 2008 and 2007, and
target allocation by asset category are as follows:
Percentage of Other Postretirement Benefit
Plan Assets Fair Value at December 31, Target
2008 2007 Allocation
Equity securities 19% 27% 20% – 40%
Fixed income securities 81% 73% 60% – 80%
Total 100% 100%
There was no Company common stock included in the other postretirement benefit plan assets as of December 31, 2008 and
2007.
The overall goal of the Plan is to maximize total investment returns to provide sufficient funding for present and anticipated
future benefit obligations within the constraints of a prudent level of portfolio risk and diversification. Investment decisions
are approved by the Company’s Pension Fund Trust and Investment Committee. The Company believes that the asset
allocation decision will be the single most important factor determining the long-term performance of the Plan.
Divergent market performance among different asset classes may, from time to time, cause the asset allocation to deviate
from the desired asset allocation ranges. The asset allocation mix is reviewed on a periodic basis. If it is determined that an
asset allocation mix rebalancing is required, future portfolio additions and withdrawals will be used, as necessary, to bring
the allocation within tactical ranges.
In order to minimize risk, the Plan maintains a listing of permissible and prohibited investments. In addition, the Plan has
certain concentration limits and investment quality requirements imposed on permissible investment options. The Company
employs a duration overlay program to adjust the duration of the fixed income component in the Plan assets to better match
the duration of the benefit obligation. The portfolio will invest primarily in U.S. Treasury notes and bond futures contracts to
maintain the duration within +/- 0.75 year of target duration.
Cash Flows
The following table illustrates the Company’s prior contributions.
Employer Contributions Pension Benefits Other Postretirement Benefits
2007 $ 158 $ 46
2008 $ 2 —
The Company presently anticipates contributing approximately $200 to its pension plans and other postretirement plans in
2009 based upon certain economic and business assumptions. These assumptions include, but are not limited to, equity
market performance, changes in interest rates and the Company’s other capital requirements. For 2009, the Company does
not have a required minimum funding contribution for the Plan and the funding requirements for all of the pension plans are
immaterial.
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009