First Data 2009 Annual Report Download - page 164

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The weighted-average rate assumptions used in the measurement of the Company’s net cost are as follows:
Successor Predecessor
Year ended
December 31,
2009
Year ended
December 31,
2008
Period from
September 25,
2007 through
December 31,
2007
Period from
January 1,
2007 through
September 24,
2007
Discount rate ..................... 6.19% 5.94% 5.83% 5.36%
Expected long-term return on plan
assets ......................... 6.95% 6.84% 7.07% 6.75%
Rate of compensation increase* ...... 3.85% 3.82% 3.95% 3.82%
* 2009 applies to plans in the United Kingdom (through June 2009) and Greece. 2008 and 2007 apply to plans
in United Kingdom, Germany, Greece and Austria.
Assumptions for the U.S. plans and the foreign plans are comparable in all of the above periods. The
Company employs a building block approach in determining the long-term rate of return for plan assets with
proper consideration of diversification and re-balancing. Historical markets are studied and long-term historical
relationships between equities and fixed-income securities are preserved consistent with the widely accepted
capital market principle that assets with higher volatility generate a greater return over the long run. Current
market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are
determined. Peer data and historical returns are reviewed to check for reasonableness and appropriateness. All
assumptions are the responsibility of management.
Plan Assets
The Company’s pension plan asset allocation at December 31, 2009 and 2008, and target allocation based
on the investment policy are as follows:
Percentage of Plan Assets
at Measurement Date
Asset Category 2009 2008
Equity securities .............................................. 52.6% 50.5%
Debt securities ............................................... 47.2% 49.1%
Other ....................................................... 0.2% 0.4%
Total ....................................................... 100% 100.0%
Asset Category
Target
allocation
U.S. plans
Target
allocation
Foreign plans *
Equity securities .............................................. 30% 35%
Debt securities ............................................... 68% 65%
Other ....................................................... 0-2% 0%
* In June 2009 the United Kingdom plan froze as noted above. Due to this event the Board of Trustees opted
for a new foreign plan allocation of 35% equity and 65% fixed income securities to be achieved gradually
with completion by the second quarter of 2010.
The maturities of debt securities at December 31, 2009 range from current to 88 years with a weighted-
average maturity of 12 years.
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