Motorola 2012 Annual Report Download - page 86

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The weighted-average asset allocation for plan assets by asset categories:
Actual Mix
December 31 2012 2011
Equity securities 64% 59%
Fixed income securities 32% 36%
Cash and other investments 4% 5%
Within the equity securities asset class, the investment policy provides for investments in a broad range of publicly-traded
securities including both domestic and foreign stocks. Within the fixed income securities asset class, the investment policy
provides for investments in a broad range of publicly-traded debt securities including U.S. Treasury issues, corporate debt
securities, mortgages and asset-backed issues, as well as foreign debt securities. In the cash asset class, investments may be in
cash and cash equivalents.
The Company expects to make no cash contributions to the Postretirement Health Care Benefits Plan in 2013. The
following benefit payments are expected to be paid:
Year
2013 $28
2014 26
2015 25
2016 24
2017 23
2018-2022 101
The health care cost trend rate used to determine the December 31, 2012 accumulated postretirement benefit obligation is
8.50% for 2013, then grading down to a rate of 5% in 2020. The health care cost trend rate used to determine the December 31,
2011 accumulated postretirement benefit obligation was 7.25% for 2012, remaining flat at 7.25% through 2015, then grading
down to a rate of 5% in 2019.
Changing the health care trend rate by one percentage point would change the accumulated postretirement benefit
obligation and the net Postretirement Health Care Benefits Plan expenses as follows:
1% Point
Increase
1% Point
Decrease
Increase (decrease) in:
Accumulated postretirement benefit obligation $2$
(2)
Net Postretirement Health Care Benefit Plan expenses ——
The Company maintains a lifetime cap on postretirement health care costs, which reduces the liability duration of the
plan. A result of this lower duration is a decreased sensitivity to a change in the discount rate trend assumption with respect to
the liability and related expense.
The Company has no significant Postretirement Health Care Benefit Plans outside the United States.
Other Benefit Plans
The Company maintains a number of endorsement split-dollar life insurance policies that were taken out on now-retired
officers under a plan that was frozen prior to December 31, 2004. The Company had purchased the life insurance policies to
insure the lives of employees and then entered into a separate agreement with the employees that split the policy benefits
between the Company and the employee. Motorola Solutions owns the policies, controls all rights of ownership, and may
terminate the insurance policies. To effect the split-dollar arrangement, Motorola Solutions endorsed a portion of the death
benefits to the employee and upon the death of the employee, the employee’s beneficiary typically receives the designated
portion of the death benefits directly from the insurance company and the Company receives the remainder of the death
benefits. It is currently expected that minimal cash payments will be required to fund these policies.
The net periodic pension cost for these split-dollar life insurance arrangements was $5 million for the years ended
December 31, 2012, 2011, and 2010. The Company has recorded a liability representing the actuarial present value of the
future death benefits as of the employees’ expected retirement date of $58 million and $56 million as of December 31, 2012
and December 31, 2011, respectively.