First Data 2009 Annual Report Download - page 251

Chase Paymentech
NOTES TO COMBINED FINANCIAL STATEMENTS
For the years ended December 31, 2007 and 2006 and
the year ended December 31, 2005 (unaudited) (Continued)
Weighted-average assumptions used to determine the benefit obligations of the Pension Plan and SERP at
December 31, 2007 and 2006 were:
Pension Plan
2007 2006
Discount rate ................................................... 6.25% 5.75%
Expected rate of increase in compensation levels ....................... 5.00% 5.00%
Expected long-term rate of return on assets ........................... 8.50% 8.50%
SERP
2007 2006
Discount rate ................................................... 6.25% 5.75%
Expected rate of increase in compensation levels ....................... 5.00% 5.00%
Weighted-average assumptions used to determine net periodic benefit cost for the Pension Plan and SERP
for the years ended December 31, 2007, 2006, and 2005 were:
Pension Plan
2007 2006 2005
Discount rate ............................................ 5.75% 5.50% 5.50%
Expected rate of increase in compensation levels ................ 5.00% 5.00% 5.00%
Expected long-term rate of return on assets ..................... 8.50% 8.50% 8.50%
SERP
2007 2006 2005
Discount rate ............................................ 5.75% 5.50% 5.50%
Expected rate of increase in compensation levels ................ 5.00% 5.00% 5.00%
Future benefits are assumed to increase in a manner consistent with past experience of the Pension Plan and
SERP, which includes assumed salary increases as presented above. In developing these assumptions, the
Company evaluated input from actuaries and plan asset managers, including their review of asset class return
expectations, historical average annual returns, and long-term inflation assumptions.
The Pension Plan weighted-average asset allocation and target allocation as of December 31, 2007 and 2006
presented as a percentage of total plan assets were as follows:
Asset Allocation Target Allocation
2007 2006 2007 2006
Equity securities ................................ 69% 72% 70% 70%
Debt securities .................................. 29 23 25 25
Cash and cash equivalents ......................... 2 5 5 5
Total ......................................... 100% 100% 100% 100%
It is the Company’s policy to invest Pension Plan assets in a diversified portfolio utilizing the target asset
allocation as a guide. Deviations from the target allocation may be authorized by the Employee Benefits
Committee. Investment risk is limited by diversification both within and between asset classes. The investment
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