Johnson and Johnson 2008 Annual Report Download - page 61

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Strategic asset allocations are determined by country, based on the
nature of the liabilities and considering the demographic composi-
tion of the plan participants (average age, years of service 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 diversi-
fying equities on a broad basis combined with currency matching of
the fixed income assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 59
The following table displays the projected future benefit payments from the Company’s retirement and other benefit plans:
(Dollars in Millions) 2009 2010 2011 2012 2013 2014-2018
Projected future benefit payments
Retirement plans $489 485 523 543 571 3,480
Other benefit plans — gross $229 185 189 191 193 1,049
Medicare rebates (9) (10) (11) (12) (13) (85)
Other benefit plans — net $220 $175 $178 $179 $180 $ 964
In 2008, the Company contributed $399 million and $579 million
to its U.S. and international pension plans, respectively. In addition,
the Company funded $450 million to its U.S. plans in the first two
months of 2009.
In 2006, Congress passed the Pension Protection Act of 2006.
The Act amended the Employee Retirement Income Security Act
(ERISA) for plan years beginning after 2007 and established new
minimum funding standards for U.S. employer defined benefit plans.
The Company plans to continue to fund its U.S. defined benefit
plans to comply with the Act.
International 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. For certain plans, funding is not a common practice, as fund-
ing provides no economic benefit. Consequently the Company has
several pension plans that are not funded.
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 anydiscretionary contributions that the Company may elect to make in the future.
(Dollars in Millions) 2009 2010 2011 2012 2013 2014-2018
Projected future contributions
Unfunded U.S. retirement plans $31 33 36 39 42 283
Unfunded International retirement plans $25 25 26 27 28 153
The Company’s retirement plan asset allocation at the end of 2008 and 2007 and target allocations for 2009 are as follows:
Percent of Target
Plan Assets Allocation
_______________________
2008 2007 2009
U.S. Retirement Plans
Equity securities 70% 79% 75%
Debtsecurities 30 21 25
Total plan assets 100% 100% 100%
International Retirement Plans
Equity securities 61% 67% 67%
Debt securities 38 32 33
Real estate and other 11
Total plan assets 100% 100% 100%
The Company’s other benefit plans are unfunded except for U.S.
life insurance contract assets of $17 million and $29 million at
December 28, 2008 and December 30, 2007, respectively.
The fair value of Johnson & Johnson common stock directly
held in plan assets was $416 million (5.4% of total plan assets) at
December 28, 2008 and $462 million (4.4% of total plan assets)
at December 30, 2007.