Visa 2009 Annual Report Download - page 98
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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
Weighted Average Actuarial Assumptions:
Fiscal
2009 2008 2007
Discount rate for benefit obligation(1)
Pension 5.60% 6.75% 6.00%
Postretirement 4.43% 6.24% 5.99%
Discount rate for net periodic benefit cost
Pension 6.75% 6.00% 6.23%
Postretirement 6.24% 5.99% 6.16%
Expected long-term rate of return on plan assets(2) 7.50% 7.50% 7.50%
Rate of increase in compensation levels for:
Benefit obligation(3) 5.50% 5.50% 5.50%
Net periodic benefit cost 5.50% 5.50% 5.50%
(1) Based on a "bond duration matching" methodology, which reflects the matching of projected plan liability cash flows to an average of high-quality
corporate bond yield curves whose duration matches the projected cash flows.
(2) Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical
rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital
market conditions and economic forecasts. Any difference between actual and expected plan experience, including asset return experience in excess of
the greater of 10% of plan assets or the projected benefit obligations, is recognized in net periodic pension cost over the average remaining service
period of employees expected to receive benefits under the plan, which is currently eight years.
(3) For the benefit obligation measured at fiscal 2009 year-end, rate of increase in compensation is 0% for fiscal 2010 and 5.5% for fiscal 2011 and
thereafter.
The assumed annual rate of future increases in health benefits for the other postretirement benefits plan is 9% for fiscal 2010. The rate is assumed to
decrease to 5% by 2017 and remain at that level thereafter. These trend rates reflect management's expectations of future rates. Increasing or decreasing the
healthcare cost trend by 1% would increase (decrease) the postretirement accumulated plan benefit obligation by less than $1 million.
Pension Plan Assets
The pension plan's weighted-average asset allocations at September 30 were as follows:
Target
Allocation
Target Allocation
Range
Actual
Allocation
Asset Class Minimum Maximum 2009 2008
Equity securities 65% 50% 80% 64% 58%
Fixed income securities 30% 25% 35% 31% 24%
Other 5% 0% 7% 5% 18%
Total 100% 100% 100%
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