Johnson Controls 2011 Annual Report Download - page 84

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84
and/or will match a percentage of the employee contributions up to certain limits. Matching contributions charged to
expense amounted to $67 million, $42 million and $35 million for the fiscal years ended 2011, 2010 and 2009,
respectively.
Multiemployer Pension Plans
The Company participates in multiemployer pension plans for certain of its hourly employees in the U.S. The
Company contributed $51 million, $46 million and $47 million to multiemployer pension plans in fiscal 2011, 2010
and 2009, respectively.
Plan Assets
The Company’s investment policies employ an approach whereby a mix of equities, fixed income and alternative
investments are used to maximize the long-term return of plan assets for a prudent level of risk. The investment
portfolio primarily contains a diversified blend of equity and fixed income investments. Equity investments are
diversified across domestic and non-domestic stocks, as well as growth, value and small to large capitalizations.
Fixed income investments include corporate and government issues, with short-, mid- and long-term maturities, with
a focus on investment grade when purchased. Investment and market risks are measured and monitored on an
ongoing basis through regular investment portfolio reviews, annual liability measurements and periodic
asset/liability studies. The majority of the real estate component of the portfolio is invested in a diversified portfolio
of high-quality, operating properties with cash yields greater than the targeted appreciation. Investments in other
alternative asset classes, including hedge funds and commodities, are made via mutual funds to diversify the
expected investment returns relative to the equity and fixed income investments. As a result of our diversification
strategies, there are no significant concentrations of risk within the portfolio of investments.
The Company’s actual asset allocations are in line with target allocations. The Company rebalances asset allocations
as appropriate, in order to stay within a range of allocation for each asset category.
The expected return on plan assets is based on the Company's expectation of the long-term average rate of return of
the capital markets in which the plans invest. The average market returns are adjusted, where appropriate, for active
asset management returns. The expected return reflects the investment policy target asset mix and considers the
historical returns earned for each asset category.