Sun Life 2010 Annual Report Download - page 126

Composition of fair value of plan assets, December 31:
2010 2009
Equity investments 44% 44%
Fixed income investments 44% 43%
Real estate investments 4% 4%
Other 8% 9%
Total composition of fair value of plan assets 100% 100%
Target allocation of plan assets, December 31:
2010 2009
Equity investments 44% 43%
Fixed income investments 45% 43%
Real estate investments 5% 5%
Other 6% 9%
Total 100% 100%
The assets of the defined benefit pension plans are primarily held in trust for plan members, and are managed within the provisions of
the plans’ investment policies and procedures. Diversification of the investments is used to minimize credit, market and foreign
currency risks. Due to the long-term nature of the pension obligations and related cash flows, asset mix decisions are based on long-
term market outlooks within the specified tolerance ranges. The long-term investment objectives of the defined benefit pension plans
are to exceed the real rate of investment return assumed in the actuarial valuation of plan liabilities. Over shorter periods, the objective
of the defined benefit pension plans is to exceed the average market returns of a well-diversified portfolio. Liquidity is managed with
consideration to the cash flow requirements of the liabilities.
Permitted investments of the defined benefit pension plans include guaranteed funds, annuities, and pooled and non-pooled variable
accumulation funds in addition to any other investment vehicle approved by the plan sponsors that is eligible under pension
regulations. The policy statement for each fund or manager mandate either prohibits, or permits, within specified constraints, the use of
derivative instruments such as options and futures. The use of derivative instruments is limited to unleveraged substitution and hedging
strategies. The defined benefit pension plans may not invest in securities of a related party or lend to any related party unless such
securities are publicly traded and selected by the manager, acting independently on behalf of all that manager’s discretionary accounts
or pooled funds, which have mandates similar to those of our defined benefit pension plans.
The following tables set forth the expected contributions and expected future benefit payments of the defined benefit pension and other
post-retirement benefit plans.
Pension Post-Retirement Total
Expected contributions for the next 12 months $56 $14 $70
Expected future benefit payments
2011 2012 2013 2014 2015 2016 to 2020
Pension $ 99 $ 108 $ 112 $ 118 $ 123 $ 744
Post-retirement 14 15 15 16 17 90
Total $ 113 $ 123 $ 127 $ 134 $ 140 $ 834
The total contribution made by us to defined contribution plans was $55 in 2010, $51 in 2009 and $52 in 2008.
23. Foreign exchange gain/loss
The net foreign exchange gain of $5, equivalent to the proportionate amount of the foreign exchange loss accumulated in unrealized
foreign currency translation gains (losses) in accumulated OCI from our self-sustaining foreign operations, was recognized in Other net
investment income (loss) for the year ended December 31, 2010 (loss of $6 in 2009 and loss of $6 in 2008).
24. Related party transactions
Transactions between SLF Inc. and its subsidiaries, which are related parties of SLF Inc., have been eliminated on consolidation and
are not disclosed in this note.
Prior to the sale of the equity investment in CI Financial on December 12, 2008 (see Note 3), we received distribution fees from
CI Investments Inc. for sales of its products by agents licensed through us. Distribution fees for 2008 of $129 are included in Fee
income in our Consolidated Statements of Operations. As a result of the sale, CI Investments Inc. is no longer related party.
122 Sun Life Financial Inc. Annual Report 2010 Notes to the Consolidated Financial Statements