Allstate 2008 Annual Report Download - page 304

Weighted average assumptions used to determine benefit obligations at December 31 are listed in the
following table. Assumptions for December 31, 2008 are based on a December 31 measurement date.
Assumptions for December 31, 2007 and prior are based on an October 31 measurement date.
Pension Postretirement
benefits benefits
2008 2007 2008 2007
Discount rate 7.50% 6.50% 7.75% 6.50%
Rate of increase in compensation levels 4.0-4.5 4.0-4.5 n/a n/a
The weighted average health care cost trend rate used in measuring the accumulated postretirement benefit
cost is 8.0% for 2009, gradually declining to 5.0% in 2015 and remaining at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for the
postretirement health care plans. A one percentage-point increase in assumed health care cost trend rates would
increase the total of the service and interest cost components of net periodic benefit cost of other postretirement
benefits and the APBO by $6 million and $46 million, respectively. A one percentage-point decrease in assumed
health care cost trend rates would decrease the total of the service and interest cost components of net periodic
benefit cost of other postretirement benefits and the APBO by $5 million and $42 million, respectively.
Pension plan assets
The pension plans target percentage of plan assets and the actual percentage of plan assets, by asset
category at December 31 are as follows:
Target percentage of Percentage of
plan assets plan assets
Asset category 2008 2008 2007
U.S. equity securities 47% 19% 48%
International equity securities 17 9 14
U.S. government fixed income securities 19 22 18
U.S. corporate fixed income securities 10 27 15
Real estate 414
Hedge funds 122—
Other 2—1
To t al 100% 100% 100%
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Notes