JP Morgan Chase 2012 Annual Report Download - page 226

Notes to consolidated financial statements
236 JPMorgan Chase & Co./2012 Annual Report
asset managers, as well as other factors that impact the
portfolio, which is rebalanced when deemed necessary.
For the U.K. defined benefit pension plans, which represent
the most significant of the non-U.S. defined benefit pension
plans, the assets are invested to maximize returns subject
to an appropriate level of risk relative to the plans’
liabilities. In order to reduce the volatility in returns relative
to the plans’ liability profiles, the U.K. defined benefit
pension plans’ largest asset allocations are to debt
securities of appropriate durations. Other assets, mainly
equity securities, are then invested for capital appreciation,
to provide long-term investment growth. Similar to the U.S.
defined benefit pension plan, asset allocations and asset
managers for the U.K. plans are reviewed regularly and the
portfolio is rebalanced when deemed necessary.
Investments held by the Plans include financial instruments
which are exposed to various risks such as interest rate,
market and credit risks. Exposure to a concentration of
credit risk is mitigated by the broad diversification of both
U.S. and non-U.S. investment instruments. Additionally, the
investments in each of the common/collective trust funds
and registered investment companies are further diversified
into various financial instruments. As of December 31,
2012, assets held by the Firm’s U.S. and non-U.S. defined
benefit pension and OPEB plans do not include JPMorgan
Chase common stock, except in connection with
investments in third-party stock-index funds. The plans hold
investments in funds that are sponsored or managed by
affiliates of JPMorgan Chase in the amount of $1.8 billion
and $1.6 billion for U.S. plans and $220 million and
$194 million for non-U.S. plans, as of December 31, 2012
and 2011, respectively.
The following table presents the weighted-average asset allocation of the fair values of total plan assets at December 31 for
the years indicated, as well as the respective approved range/target allocation by asset category, for the Firm’s U.S. and non-
U.S. defined benefit pension and OPEB plans.
Defined benefit pension plans
U.S. Non-U.S. OPEB plans(c)
Target % of plan assets Target % of plan assets Target % of plan assets
December 31, Allocation 2012 2011 Allocation 2012 2011 Allocation 2012 2011
Asset category
Debt securities(a) 10-30% 20% 20% 70% 72% 74% 50% 50% 50%
Equity securities 25-60 41 39 29 27 25 50 50 50
Real estate 5-20 55 — —— — ——
Alternatives(b) 15-50 34 36 1 11 — ——
Total 100% 100% 100% 100% 100% 100% 100% 100% 100%
(a) Debt securities primarily include corporate debt, U.S. federal, state, local and non-U.S. government, and mortgage-backed securities.
(b) Alternatives primarily include limited partnerships.
(c) Represents the U.S. OPEB plan only, as the U.K. OPEB plan is unfunded.