HP 2015 Annual Report Download - page 126

Table of Contents
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plan assets and post-retirement benefit plan assets in private market securities such as private equity funds to provide diversification and a higher expected
return on assets.
Outside the U.S., asset allocation decisions are typically made by an independent board of trustees for the specific plan. As in the U.S., investment
objectives are designed to generate returns that will enable the plan to meet its future obligations. In some countries, local regulations may restrict asset
allocations, typically leading to a higher percentage of investment in fixed income securities than would otherwise be deployed. HP reviews the investment
strategy and provides a recommended list of investment managers for each country plan, with final decisions on asset allocation and investment managers
made by the board of trustees for the specific plan.
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The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plan invests and the weight of
each asset class in the target mix. Expected asset returns reflect the current yield on government bonds, risk premiums for each asset class and expected real
returns which considers each country's specific inflation outlook. Because HP's investment policy is to employ primarily active investment managers who
seek to outperform the broader market, the expected returns are adjusted to reflect the expected additional returns net of fees.
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As of October 31, 2015, HP (including Hewlett Packard Enterprise) expects to contribute approximately $384 million to its non-U.S. pension plans and
approximately $37 million to cover benefit payments to U.S. non-qualified plan participants and approximately $46 million to cover benefit claims for HP's
post-retirement benefit plans in fiscal 2016. Subsequent to the Separation, HP Inc. expects to contribute approximately $18 million to its non-U.S. pension
plans, approximately $36 million to cover benefit payments to U.S. non-qualified plan participants and approximately $43 million to cover benefit claims for
HP's post-retirement benefit plans in fiscal 2016. HP's policy is to fund its pension plans so that it makes at least the minimum contribution required by local
government, funding and taxing authorities.
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As of October 31, 2015, HP Inc. estimates that the future benefits payments for the retirement and post-retirement plans are as follows:
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   
2016 $ 879 $ 22 $ 82
2017 636 24 71
2018 645 26 58
2019 670 28 54
2020 705 29 51
Next five fiscal years to October 31, 2025 3,785 188 197
Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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