Albertsons 2007 Annual Report Download - page 112

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(
4) Expected lon
g
-term return on plan assets is estimated b
y
asset class and is
g
enerall
y
based on widel
y-
a
ccepted capital market principles, long-term return analysis for global fixed income and equity markets, the
a
ct
i
ve tota
l
return-or
i
ente
d
port
f
o
li
o management sty
l
easwe
ll
as t
h
e
di
vers
ifi
cat
i
on nee
d
san
d
re
b
a
l
anc
i
ng
c
haracteristics of the plan. Lon
g
-term trends are evaluated relative to market factors such as inflation,
i
nterest rates and fiscal and monetary polices in order to assess the capital market assumptions
.
C
ontributions
T
he Compan
y
expects to contribute $32 to its pension plans and $13 to its postretirement benefit plans in fisca
l
2
008. T
h
e Company’s
f
un
di
ng po
li
cy
f
or t
h
e
d
e
fi
ne
db
ene
fi
t pens
i
on p
l
ans
i
s to contr
ib
ute t
h
em
i
n
i
mum
contr
ib
ut
i
on a
ll
owe
d
un
d
er t
h
e Emp
l
o
y
ee Ret
i
rement Income Secur
i
t
y
Act (“ERISA”), w
i
t
h
cons
id
erat
i
on
gi
ven
to contributin
g
lar
g
er amounts in order to be exempt from Pension Benefit Guarant
y
Corporation (“PBGC”
)
v
ar
i
a
bl
e rate prem
i
ums or part
i
c
i
pant not
i
ces o
f
un
d
er-
f
un
di
ng. T
h
e Company w
ill
recogn
i
ze contr
ib
ut
i
ons
i
n
a
ccor
d
ance w
i
t
h
app
li
ca
bl
ere
g
u
l
at
i
ons, w
i
t
h
cons
id
erat
i
on
gi
ven to reco
g
n
i
t
i
on
f
or t
h
e ear
li
est p
l
an
y
ear
p
ermitted.
Pl
an A
ss
et
s
Plan assets are held in trust and invested in separatel
y
mana
g
ed accounts and publicl
y
traded mutual funds
h
oldin
g
equit
y
, fixed income securities and alternative investment classes.
T
he Compan
y
emplo
y
s a total return approach whereb
y
a mix of equities and fixed income investments are use
d
to max
i
m
i
ze t
h
e
l
ong-term return o
f
p
l
an assets
f
or a pru
d
ent
l
eve
l
o
f
r
i
s
k
.A
l
ternat
i
ve
i
nvestments,
i
nc
l
u
di
n
g
h
e
dg
e
f
un
d
s, pr
i
vate equ
i
t
y
an
d
rea
l
estate are a
l
so use
dj
u
di
c
i
ous
ly
to en
h
ance r
i
s
k
a
dj
uste
dl
on
g
-term returns
w
hile improvin
g
portfolio diversification. The overall investment strate
gy
and polic
y
have been developed based
o
nt
h
e nee
d
to sat
i
s
f
yt
h
e
l
ong-term
li
a
bili
t
i
es o
f
t
h
e Company’s pens
i
on p
l
ans. R
i
s
k
management
i
s
a
ccomp
li
s
h
e
d
t
h
rou
gh di
vers
ifi
cat
i
on across asset c
l
asses, mu
l
t
i
p
l
e
i
nvestment mana
g
er port
f
o
li
os an
db
ot
h
g
eneral and portfolio-specific investment
g
uidelines. Risk tolerance is established throu
g
h careful consideration
of
t
h
ep
l
an
li
a
bili
t
i
es, p
l
an
f
un
d
e
d
status an
d
t
h
e Company’s
fi
nanc
i
a
l
con
di
t
i
on. T
hi
s asset a
ll
ocat
i
on po
li
cy m
i
x
i
s rev
i
ewe
d
annua
lly
an
d
actua
l
a
ll
ocat
i
ons are re
b
a
l
ance
d
on a re
g
u
l
ar
b
as
i
s
.
P
l
an assets are
i
nveste
d
us
i
ng a com
bi
nat
i
on o
f
act
i
ve an
d
pass
i
ve
i
nvestment strateg
i
es. Pass
i
ve strateg
i
es
i
nvest
in broad sectors of the market primaril
y
throu
g
h the use of indexin
g
. Indexin
g
is an investment mana
g
ement
a
pproach based on investing in exactly the same securities, in the same proportions, as an index, such as the S&
P
500. Active strategies employ multiple investment management firms. Managers within each asset class cover a
ran
g
e of investment st
y
les and approaches and are combined in a wa
y
that controls for capitalization, and st
y
le
b
iases (equities) and interest rate bets (fixed income) versus benchmark indices while focusing primarily o
n
secur
i
ty se
l
ect
i
on as a means to a
dd
va
l
ue. Mon
i
tor
i
ng act
i
v
i
t
i
es to eva
l
uate per
f
ormance aga
i
nst targets an
d
measure investment risk take place on an on
g
oin
g
basis throu
g
h annual liabilit
y
measurements, periodic asset/
l
iability studies and quarterly investment portfolio reviews
.
T
he asset allocation
g
uidelines and the actual allocation of pension plan assets are as follows:
Asset Category
Target Allocation
R
anges
Pl
a
nA
sse
t
s
Fiscal 200
7
Pl
a
nA
sse
t
s
Fiscal 2006
D
omestic Equit
y
45.0% - 70.0% 52.5% 60.1
%
International Equit
y
7.0% - 20.0% 17.7% 9.9
%
D
omestic Fixed Income 2
5
.0%-3
5
.0% 29.
5
% 24.
5%
C
ash and
O
ther
0
.
0
%-1
5
.
0
%
0
.
3
%
5
.
5%
T
otal 100.0% 100.0
%
F-4
6