Johnson and Johnson 2006 Annual Report Download - page 67

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NOTES TO CONSOLIDATED FINANCIAL ST A TEMENTS65
The following table displays the projected future benefit payments from the Company’s retirement and other benefit plans:
(Dollars in Millions) 2007 2008 2009 2010 2011 2012-2016
Projected future benefit payments
Retirement plans $421 422 432 455 496 3,003
Other benefit plans —gross $176 176 179 182 185 993
Medicare rebates (9) (10) (11) (12) (13) (83)
Other benefit plans —net$167 166 168 170 172 910
The following table displays the projected future minimum contributions to the Company’s U.S. and international unfunded
retirement plans. These amounts do not include any discretionary contributions that the Company may elect to make in the future.
(Dollars in Millions) 2007 2008 2009 2010 2011 2012-2016
Projected future contributions
Unfunded U.S. retirement plans $21 22 23 24 25 140
Unfunded International retirement plans $20 20 21 21 22 120
The Company’s retirement plan asset allocation at December 31, 2006 and January 1, 2006 and target allocations for 2007 are
as follows:
Percent ofTarget
Plan Assets Allocation
_______________________
2006 2005 2007
U.S. Retirement Plans
Equity securities 78% 76% 75%
Debt securities 22 24 25
Total plan assets 100% 100% 100%
International Retirement Plans
Equity securities 67% 69% 67%
Debt securities 32 30 32
Real estate and other 1 1 1
Total plan assets 100% 100% 100%
The Company’s other benefit plans are unfunded except for U.S.
life insurance contract assets of $30 million and $34 million at
December 31, 2006 and January 1, 2006, respectively.
The fair value of Johnson & Johnson common stock directly
held in plan assets was $452 million (4.9% of total plan assets)
and $419 million (5.2% of total plan assets) at December 31,
2006 and January 1, 2006, respectively.
Plans with accumulated benefit obligations in excess of plan
assets consist of the following:
Retirement Plans
_______________________
(Dollars in Millions) 2006 2005
Accumulated benefit obligation $(3,085) $(2,759)
Projected benefit obligation (3,561) (3,230)
Plan assets at fair value 1,650 1,570
The Company was not required to fund its U.S. retirement plans
in 2006 and is not required, nor does it anticipate funding, in
2007 to meet minimum statutory funding requirements. Interna-
tional plans are funded in accordance with local regulations.
Additional discretionary contributions are made when deemed
appropriate to meet the long-term obligations of the plans. In
certain countries other than the United States, the funding of
pension plans is not a common practice as funding provides no
economic benefit. Consequently, the Company has several
pension plans which are not funded.
Strategic asset allocations are determined by country, based on
the nature of the liabilities and considering the demographic
composition of the plan participants (average age, years of ser-
vice and active versus retiree status). The Company’s plans are
considered non-mature plans and the long-term strategic asset
allocations are consistent with these types of plans. Emphasis is
placed on diversifying equities on a broad basis combined with
currency matching of the fixed income assets.