Rite Aid 2016 Annual Report Download - page 135

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RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended February 27, 2016, February 28, 2015 and March 1, 2014
(In thousands, except per share amounts)
18. Retirement Plans (Continued)
• 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 ............................................. 36%
International equities ....................................... 13%
U.S. fixed income .......................................... 51%
Total ................................................. 100%
The Company expects to contribute $0 to the Defined Benefit Pension Plan and make payments of
$1,602 to participants of the Nonqualified Executive Retirement Plan during fiscal 2017.
135