GE 2008 Annual Report Download - page 69

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ge 2008 annual report 67
notes to consolidated financial statements
GE Pension Trust assets are invested subject to the following
additional guidelines:
Þ Short-term securities must generally be rated A1/P1 or better,
except for 15% of such securities that may be rated A2/P2.
Þ Real estate investments may not exceed 25% of total assets.
Þ Investments in restricted securities that are not freely tradable
may not exceed 30% of total assets (actual was 16% of trust
assets at December 31, 2008).
According to statute, the aggregate holdings of all qualifying
employer securities (e.g., GE common stock) and qualifying
employer real property may not exceed 10% of the fair value of
trust assets at the time of purchase. GE securities represented
3.5% and 5.6% of trust assets at year-end 2008 and 2007,
respectively.
Other pension plans
(weighted average)
2008 2007
Target Actual Actual
December 31 allocation allocation allocation
Equity securities 60% 57% 67%
Debt securities 30 32 25
Real estate 4 4 4
Other 6 7 4
PENSION ASSET (LIABILITY)
Principal pension plans Other pension plans
December 31 (In millions) 2008 2007 2008 2007
Funded status (a) $ (4,438) $16,753 $(2,374) $(1,603)
Pension asset (liability)
recorded in the Statement
of Financial Position
Pension asset $—$20,190 $ 9 $ 258
Pension liabilities
Due within one year (b) (117) (111) (51) (54)
Due after one year (b) (4,321) (3,326) (2,332) (1,807)
Net amount recognized $ (4,438) $16,753 $(2,374) $(1,603)
Amounts recorded in
shareowners’ equity
(unamortized)
Prior service cost $ 1,739 $ 2,060 $ 62 $ 65
Net actuarial loss (gain) 16,447 (4,974) 1,753 654
Total $18,186 $ (2,914) $ 1,815 $ 719
(a) Fair value of assets less PBO, as shown in the preceding tables.
(b) For principal pension plans, primarily represents the GE Supplementary Pension
Plan liability.
PLANS WITH ASSETS LESS THAN ABO
December 31 (In millions) 2008 2007
Funded plans with assets less than ABO
Plan assets $4,914 $3,639
Accumulated benefit obligations 5,888 3,974
Projected benefit obligations 6,468 4,595
Unfunded plans(a)
Accumulated benefit obligations 3,352 3,111
Projected benefit obligations 4,303 4,283
(a) Primarily related to the GE Supplementary Pension Plan.
FAIR VALUE OF PLAN ASSETS
Principal pension plans Other pension plans
(In millions) 2008 2007 2008 2007
Balance at January 1 $ 59,700 $54,758 $ 7,411 $6,435
Actual gain (loss) on
plan assets (16,569) 7,188 (1,743) 614
Employer contributions 153 136 627 730
Participant contributions 169 173 40 43
Benefits paid (2,723) (2,555) (383) (370)
Acquisitions
(dispositions) —net ——565 (372)
Exchange rate adjustments ——(1,143) 331
Balance at December 31 $ 40,730 $59,700 $ 5,374 $7,411
PLAN ASSET ALLOCATION
Principal pension plans
2008 2007
Target Actual Actual
December 31 allocation allocation allocation
U.S. equity securities 17 – 37% 25% 32%
Non-U.S. equity securities 17–37 14 20
Debt securities (including
cash equivalents) 10–40 31 24
Real estate 4–14 12 9
Private equities 5–15 12 9
Other 1–14 66
Plan fiduciaries of the GE Pension Plan set investment policies and
strategies for the GE Pension Trust and oversee its investment
allocation, which includes selecting investment managers, com-
missioning periodic asset-liability studies and setting long-term
strategic targets. Long-term strategic investment objectives include
preserving the funded status of the plan and balancing risk and
return. Target allocation ranges are guidelines, not limitations,
and occasionally plan fiduciaries will approve allocations above
or below a target range.