Northrop Grumman 2013 Annual Report Download - page 82

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NORTHROP GRUMMAN CORPORATION
-72-
A one-percentage-point change in the initial through the ultimate health care cost trend rates would have had the
following estimated effect on 2013 other post-retirement benefit results:
$ in millions 1-Percentage-
Point Decrease 1-Percentage-
Point Increase
Increase (decrease) from change in health care cost trend rates to
Total service and interest cost $ (5) $ 4
Other post-retirement benefit liability (81) 67
Plan Assets and Investment Policy
Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and
investment return over the long term. The investment goal is to exceed the assumed rate of return over the long term
within reasonable and prudent levels of risk. Liability studies are conducted on a regular basis to provide guidance in
setting investment goals with an objective to balance risk. Risk targets are established and monitored against
acceptable ranges.
Our investment policies and procedures are designed to ensure the plans’ investments are in compliance with ERISA
(Employee Retirement Income Security Act). Guidelines are established defining permitted investments within each
asset class. Derivatives are used for transitioning assets, asset class rebalancing, managing currency risk and for
management of fixed income and alternative investments.
For the majority of the plans’ assets, the investment policies require that the asset allocation be maintained within
the following ranges as of December 31, 2013:
Asset Allocation Ranges
Domestic equities 10% - 30%
International equities 5% - 25%
Fixed income securities 30% - 50%
Alternative investments 15% - 30%