Avnet 2007 Annual Report Download - page 69

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Components of net periodic pension costs during the last three years are as follows:
June 30,
2007
July 1,
2006
July 2,
2005
Years Ended
(Thousands)
Service cost ........................................ $14,862 $ 15,165 $ 13,365
Interest cost ........................................ 15,732 14,171 14,059
Expected return on plan assets .......................... (20,493) (20,577) (16,527)
Recognized net actuarial loss ........................... 2,723 4,518 1,343
Amortization of prior service credit . . . ................... (45) (321) (321)
Net periodic pension cost .............................. $12,779 $ 12,956 $ 11,919
The Company expects to make contributions to the Plan of approximately $42,300,000 during fiscal 2008. The
Company did not make contributions to the Plan during fiscal 2007 and made contributions of $58,638,000 during
fiscal 2006.
Benefit payments are expected to be paid to participants as follows for the next five fiscal years and the
aggregate for the five years thereafter (in thousands):
2008 ................................................................ $17,055
2009 ................................................................ 15,484
2010 ................................................................ 16,063
2011 ................................................................ 15,490
2012 ................................................................ 16,543
2013 through 2017 ...................................................... 94,729
The Plan’s assets are held in trust and were allocated as follows as of the June 30 measurement date for fiscal
2007 and 2006:
2007 2006
Equity securities ..................................................... 76% 75%
Debt securities ...................................................... 24 24
Other investments, primarily money market funds ............................ — 1
The general investment objectives of the Plan are to maximize returns through a diversified investment
portfolio in order to earn annualized returns that meet the long-term cost of funding the Plan’s pension obligations
while maintaining reasonable and prudent levels of risk. The target rate of return on Plan assets is currently 9%,
which represents the average rate of earnings expected on the funds invested or to be invested to provide for the
benefits included in the benefit obligation. This assumption has been determined by combining expectations
regarding future rates of return for the investment portfolio along with the historical and expected distribution of
investments by asset class and the historical rates of return for each of those asset classes. The mix of equity
securities is typically diversified to obtain a blend of domestic and international investments covering multiple
industries. The Plan assets do not include any material investments in Avnet common stock. The Plan’s investments
in debt securities are also diversified across both public and private fixed income portfolios. The Company’s current
target allocation for the investment portfolio is for equity securities, both domestic and international, to represent
approximately 76% of the portfolio with a policy for minimum investment in equity securities of 60% of the
portfolio and a maximum of 92%. The majority of the remaining portfolio of investments is to be invested in fixed
income securities.
69
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)