Rite Aid 2011 Annual Report Download - page 100

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 26, 2011, February 27, 2010 and February 28, 2009
(In thousands, except per share amounts)
15. Retirement Plans (Continued)
The investment objectives of the Defined Benefit Pension Plan, the only defined benefit plan with
assets, are to:
• Achieve a rate of return on investments that exceeds inflation over a full market cycle and is
consistent with actuarial assumptions;
• Balance the correlation between assets and liabilities by diversifying the portfolio among various
asset classes to address return risk and interest rate risk;
• Balance the allocation of assets between the investment managers to minimize concentration
risk;
• Maintain liquidity in the portfolio sufficient to meet plan obligations as they come due; and
• Control administrative and management costs.
The asset allocation established for the pension investment program reflects the risk tolerance of
the Company, as determined by:
• The current and anticipated financial strength of the Company;
• the funded status of the plan; and
• plan liabilities.
Investments in both the equity and fixed income markets will be maintained, recognizing that
historical results indicate that equities (primarily common stocks) have higher expected returns than
fixed income investments. It is also recognized that the correlation between assets and liabilities must
be balanced to address higher volatility of equity investments (return risk) and interest rate risk.
The following targets are to be applied to the allocation of plan assets.
Target
Category Allocation
U.S. equities ............................................. 45%
International equities ....................................... 15%
U.S. fixed income .......................................... 40%
Total ................................................. 100%
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