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Table of Contents AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Weighted average assumptions used to determine net benefit costs are as follows:
The Company bases its discount rate on a hypothetical portfolio of bonds rated Aa by Moody’
s Investor Services or AA by Standard &
Poor's. The bonds selected for this determination are based upon the estimated amount and timing of services of the pension plan.
Components of net periodic pension costs during the last three fiscal years are as follows:
The Company made $40,000,000 of contributions in fiscal 2013 and none in 2012 .
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):
The Plan’s assets are held in trust and were allocated as follows as of the June 30 measurement date for fiscal 2013 and 2012 :
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 8.5%
, 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 securities. The Company’
s current target
allocation for the investment portfolio is for equity securities, both domestic and international, to represent approximately 76% of the
59
2013
2012
Discount rate 4.00%
5.25%
Expected return on plan assets 8.50%
8.50%
Years Ended
June 29,
2013
June 30,
2012
July 2,
2011
(Thousands)
Service cost
$
36,920
$
28,380
$
23,874
Interest cost
14,653
14,925
13,918
Expected return on plan assets
(27,905
)
(26,938
)
(27,560
)
Recognized net actuarial loss
14,898
9,680
8,938
Amortization of prior service credit
(1,573
)
(1,875
)
(1,875
)
Net periodic pension cost
$
36,993
$
24,172
$
17,295
2014
$
28,436
2015
23,802
2016
27,310
2017
30,627
2018
34,448
2019 through 2023
240,710
2013
2012
Equity securities
75
%
75
%
Fixed income
24
24
Cash and cash equivalents
1
1