BB&T 2008 Annual Report Download - page 121

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The accumulated benefit obligation for the qualified plans totaled $1.1 billion and $948 million at
December 31, 2008 and 2007, respectively. For the nonqualified plans, the accumulated benefit obligation totaled
$123 million and $106 million at December 31, 2008 and 2007, respectively.
Employer contributions to the qualified pension plan are in amounts between the minimum required for
funding standard accounts and the maximum amount deductible for federal income tax purposes. Management is
not required to make a contribution to the qualified pension plan during 2009; however, management made a
contribution of $422 million in early 2009 and may make additional contributions during 2009 if deemed
appropriate. For the nonqualified plans the employer contributions are based on benefit payments. The following
table reflects the estimated benefit payments reflecting expected future service for the next five years and for
the years 2014 through 2018.
Qualified
Pension Plan Nonqualified Pension Plans
(Dollars in millions)
Estimated Benefit Payments
2009 $43 $7
2010 46 8
2011 49 9
2012 53 9
2013 57 9
2014-2018 345 49
BB&T’s primary total return objective is to achieve returns that, over the long term, will fund retirement
liabilities and provide for the desired plan benefits in a manner that satisfies the fiduciary requirements of the
Employee Retirement Income Security Act. The plan assets have a long-term, indefinite time horizon that runs
concurrent with the average life expectancy of the participants. As such, the Plan can assume a time horizon that
extends well beyond a full market cycle, and can assume an above-average level of risk, as measured by the
standard deviation of annual return. It is expected, however, that both professional investment management and
sufficient portfolio diversification will smooth volatility and help to generate a reasonable consistency of return.
The investments are broadly diversified among economic sector, industry, quality and size in order to reduce risk
and to produce incremental return. Within approved guidelines and restrictions, investment managers have wide
discretion over the timing and selection of individual investments.
BB&T periodically reviews its asset allocation and investment policy and during 2006 made changes to its
target asset allocation. BB&T has established guidelines within each asset category to ensure the appropriate
balance of risk and reward. The current target asset allocations for the plan assets include a range of 35% to 45%
for U.S. equity securities, 7% to 13% for international equity securities, 20% to 30% for fixed income securities,
and 10% to 30% for alternative investments, which include real estate, hedge funds, private equities and
commodities, with any remainder to be held in cash equivalents. The allocation of plan assets for the defined
benefit pension plans, by asset category as of December 31, 2008 and 2007 is detailed in the table below.
December 31,
Allocation of Plan Assets 2008 2007
U.S. equity securities 44% 43%
International equity securities 13 13
Fixed income securities 31 31
Alternative investments 9 9
Cash equivalents 34
Total 100% 100%
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