Travelers 2007 Annual Report Download - page 231

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
Plan Assets
The percentage of the fair value of pension plan assets held by asset category is as follows:
(at December 31,) 2007 2006
Equity securities ......................................... 63% 65%
Debt securities .......................................... 30% 29%
Cash .................................................. 5% 4%
Other ................................................. 2% 2%
Total ................................................ 100% 100%
Pension plan assets are invested for the exclusive benefit of the plan participants and beneficiaries
and are intended, over time, to satisfy the benefit obligations under the plan. Risk tolerance is
established through consideration of plan liabilities, plan funded status, and corporate financial
position. The asset mix guidelines have been established and are reviewed quarterly. These guidelines
are intended to serve as tools to facilitate the investment of plan assets to maximize long-term total
return and the ongoing oversight of the plan’s investment performance. The investment portfolio
contains a diversified mix of equity and fixed-income investments. Equity investments are diversified
across U.S. and non-U.S. stocks. Other assets such as partnerships and real estate are used to enhance
long-term returns while improving portfolio diversification. Investment risk is measured and monitored
on an ongoing basis through daily and monthly investment portfolio review, annual liability
measurements, and periodic asset/liability studies.
Maximum and minimum targets for asset allocations at December 31, 2007 by asset category were
as follows:
Asset Category Plan Assets
Equity securities .......................................... 25 - 75%
Fixed maturity securities .................................... 15 - 75%
Cash .................................................. 0 - 20%
Other ................................................. 0 - 10%
Equity securities include 797,600 shares of the Company’s common stock with a market value of
$43 million at December 31, 2007.
The Company’s other post-retirement benefit plan weighted-average asset allocations at
December 31, 2007 and 2006 by asset category were as follows:
Asset Category 2007 2006
Fixed maturity securities ................................... 62% 68%
Cash .................................................. 34% 28%
Equity securities ......................................... 4% 4%
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