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Table of Contents AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The discount rate selected by the Company for the Plan reflects the current rate at which the underlying liability could be settled at the
measurement date as of June 28, 2014. The selected discount rate is based primarily upon an average rate determined by matching the expected
cash outflows of the Plan to a yield curve constructed from a portfolio of highly rated (minimum AA rating) fixed-
income debt instruments with
maturities consistent with the expected cash outflows.
Weighted average assumptions used to determine net benefit costs are as follows:
Components of net periodic pension cost during the last three fiscal years are as follows:
The Company made $40.0 million of contributions in fiscal 2014 and fiscal 2013
and expects to make approximately $40.0 million of
contributions in fiscal 2015.
Benefit payments are expected to be paid to Plan 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 measurement date at the end of fiscal 2014 and 2013 :
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
62
2014
2013
Discount rate 4.50%
4.00%
Expected return on plan assets 8.50%
8.50%
Years Ended
June 28,
2014
June 29,
2013
June 30,
2012
(Thousands)
Service costs
$
36,733
$
36,920
$
28,380
Interest costs
17,155
14,653
14,925
Expected return on plan assets
(30,908
)
(27,905
)
(26,938
)
Recognized net actuarial losses
12,686
14,898
9,680
Amortization of prior service credits
(1,573
)
(1,573
)
(1,875
)
Net periodic pension cost
$
34,093
$
36,993
$
24,172
2015
$
31,997
2016
26,982
2017
30,786
2018
34,646
2019
39,082
2020 through 2024
273,509
2014
2013
Equity securities
75
%
75
%
Fixed income debt securities
24
%
24
%
Cash and cash equivalents
1
%
1
%