EMC 2004 Annual Report Download - page 87

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of net periodic benefit cost of the Pension Plans are as follows (table in thousands):
2004 2003 2002
Service cost $ – $ – $ 732
Interest cost 18,542 17,913 20,108
Expected return on plan assets (26,540) (21,954) (20,467)
Amortization of transition asset (853) (853) (839)
Recognized actuarial loss 5,615 7,804 3,089
Curtailment, net of settlements – (1,165) 401
Net periodic benefit cost (credit) $ (3,236) $ 1,745 $ 3,024
The weighted-average assumptions used in the Pension Plans to determine benefit obligations at December 31 are as follows:
December 31, December 31, December 31,
2004 2003 2002
Discount rate 5.7% 6.1% 6.4%
Expected long-term rate of return on plan assets 8.2% 8.2% 8.4%
Rate of compensation increase N/A N/A N/A
The weighted-average assumptions used in the Pension Plans to determine periodic benefit cost for the years ended December 31 are as follows:
December 31, December 31, December 31,
2004 2003 2002
Discount rate 6.1% 6.5% 7.0%
Expected long-term rate of return on plan assets 8.2% 8.2% 8.4%
Rate of compensation increase N/A N/A N/A
The expected long-term rate of return on plan assets considers the current level of expected returns on risk free investments (primarily government bonds),
the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each
asset class. The expected return for each asset class was weighted based on the target asset allocation to develop the expected long-term rate of return on
assets. The weighted average asset allocations are as follows:
December 31, December 31,
2004 2003
Equity securities 71% 75%
Debt securities 29 25
Total 100% 100%
The target allocation of the assets in the Pension Plans at December 31, 2004 consisted of equity securities of 70% and debt securities of 30%.
Our Pension Plan assets are managed by outside investment managers. Our investment strategy with respect to pension assets is to maximize returns while
preserving principal. 84