Jack In The Box 2008 Annual Report Download - page 71

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For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement
health plans were as follows for each fiscal year:
2008 2007
Health care cost trend rate for next year:
Participants under age 65 ........................................... 7.50% 8.33%
Participants age 65 or older ......................................... 7.69% 8.50%
Rate to which the cost trend rate is assumed to decline ....................... 4.94% 4.92%
Year the rate reaches the ultimate trend rate ............................... 2013 2013
The assumed health care cost trend rate represents our estimate of the annual rates of change in the costs of the
health care benefits currently provided by our postretirement plans. The health care cost trend rate implicitly
considers estimates of health care inflation, changes in health care utilization and delivery patterns, technological
advances and changes in the health status of the plan participants. The health care cost trend rate assumption has a
significant effect on the amounts reported. Forexample, increasing the assumed health care cost trend rates by 1.0%
in each year would increase the postretirement benefit obligation as of September 28, 2008 by $2.2 million and the
aggregate of the service and interest cost components of net periodic benefit cost for 2008 by $0.2 million. If the
assumed health care cost trend rates decreased by 1.0% in each year, the postretirement benefit obligation would
decrease by $1.8 million as of September 28, 2008, and the aggregate of the service and interest components of net
periodic benefit cost for 2008 would decrease by $0.1 million.
Plan assets — Our investment strategy is to seek a competitive rate of return relative to an appropriate level of
risk. Our asset allocation strategy utilizes multiple investment managers in order to maximize the plan’s return
while minimizing risk. We regularly monitor our asset allocation, and senior financial management and the Finance
Committee of the Board of Directors review performance results at least semi-annually. In May 2007, we adjusted
our target asset allocation for our qualified pension plans to the following: 40% U.S. equities, 30% debt securities,
15% international equities, 5% balanced fund and 10% real estate. We plan to reallocate our plan assets over a
period of time, as deemed appropriate by senior financial management, to achieve our target asset allocation. The
qualified pension plans had the following asset allocations at June 30, 2008 and June 30, 2007:
2008 2007
U.S. equities ........................................................ 39% 42%
Debt securities ...................................................... 36 37
International equities.................................................. 14 15
Balanced fund....................................................... 6 6
Real estate ......................................................... 5 0
100% 100%
F-25
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)