Equifax 2004 Annual Report Download - page 72

N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
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USRIP asset allocation strategy is determined based upon
guidelines provided by our external advisor. This forecasting
process takes into account projected investment returns
by asset category, the correlation among those returns, the
standard deviation of those returns and the future pattern
of actuarial liabilities to which the plan is obligated. Asset/
liability forecasting is conducted at regular intervals during
the year, as needed, utilizing input from our in-house and
external consulting actuaries, and our external investment
advisor. All USRIP asset targets and ranges are approved
by two in-house Plan Administrators, who are Named
Fiduciaries under ERISA. Investment recommendations
are made by our external advisor, working in conjunction
with our in-house Investment Offi cer, who is also an ERISA
Named Fiduciary. The 8.75% expected return on plan
assets assumption for 2004 is based on the 50th percentile
return from our asset/liability forecasting process.
The following USRIP asset allocation ranges, targets and
actual allocations were in effect as of December 31, 2004
and 2003:
Actual
Actual
Target Range 2004 2003
Large-Cap Equity 25% 20-35%
20.5%
30.5%
Mid-Cap Equity 10% 5-15%
10.3%
5.4%
Small-Cap Equity 8% 5-15%
14.7%
15.8%
International Equity 12% 6-18%
15.8%
13.6%
Alternative Assets 15% 5-20%
15.8%
9.4%
Venture Capital 10% 5-15%
5.7%
5.8%
Real Estate 5% 0-12%
3.5%
3.2%
Fixed Income 15% 10-35%
12.8%
15.7%
Cash minimal 0-2%
0.9%
0.7%
* Note: New USRIP asset allocation targets and ranges were put into place during 2003.
The USRIP, in an effort to meet its asset allocation objec-
tives, utilizes a variety of asset classes which have histori-
cally produced returns which are relatively uncorrelated to
those of the S&P 500. Asset classes included in this category
are alternative assets (hedge funds-of-funds), venture capital
(including secondary private equity) and real estate. The
primary benefi ts to the USRIP of using these types of asset
classes are: (1) their non-correlated returns reduce the over-
all volatility of the USRIP’s portfolio of assets, and (2) they
produce superior risk-adjusted returns.
Additionally, the USRIP allows certain of its managers,
subject to specifi c risk constraints, to utilize derivative
instruments, in order to enhance asset return, reduce vola-
tility or both. Derivatives are primarily employed by the
Plan in its fi xed income portfolio and in the hedge fund-
of-funds area.
The USRIP is prohibited from investing additional amounts
in Equifax Inc. stock once the market value of stock held
by the plan exceeds 10% of the total market value of the
USRIP. At December 31, 2004 and 2003, the USRIP’s assets
included 1.8 million shares of Equifax common stock, with a
market value of approximately $49.6 million and $43.2 mil-
lion, respectively.
Additionally, the USRIP is subject to the transaction prohi-
bitions imposed by ERISA. Not more than 5% of the port-
folio (at cost) shall be invested in the securities of any one
issuer with the exception of Equifax common stock, and
U.S. Treasury and Government Agency securities.
Foreign Retirement Plans.
We also maintain defi ned
contribution plans for certain employees in the U.K. For
the years ended December 31, 2004, 2003 and 2002, our
expenses related to these plans were $1.4 million, $0.7 mil-
lion and $1.2 million for each year, respectively.
Employee Retirement Savings Plans.
Our retire-
ment savings plans provide for annual contributions by
us, within specifi ed ranges, determined at the discretion
of the Group Plans Administrative Committee, for the
benefi t of eligible employees in the form of units of
Equifax common stock. Employees may transfer all or
a part of these Equifax common stock investments into
other available investments within the plan, at any time.
Our matching contributions are expensed. Expenses for
these plans were $3.2 million in 2004, $3.1 million in
2003 and $3.0 million in 2002.