Pfizer 2008 Annual Report Download - page 77

Notes to Consolidated Financial Statements
Pfizer Inc and Subsidiary Companies
E. Plan Assets
The following table presents the weighted-average long-term target asset allocations and the percentages of the fair value of plan
assets for our U.S. qualified and international pension plans and postretirement plans by investment category as of December 31:
TARGET
ALLOCATION
PERCENTAGE OF
PLAN ASSETS
(PERCENTAGES) 2008 2008 2007
U.S. qualified pension plans:
Global equity securities 55.0 40.6 61.4
Debt securities 35.0 41.2 23.6
Alternative investments(a) 10.0 15.9 10.9
Cash and cash equivalents — 2.3 4.1
Total 100.0 100.0 100.0
International pension plans:
Global equity securities 57.1 48.5 63.2
Debt securities 28.2 31.6 23.3
Alternative investments(b) 14.5 11.2 7.9
Cash and cash equivalents 0.2 8.7 5.6
Total 100.0 100.0 100.0
U.S. postretirement plans(c):
Global equity securities 69.4 57.9 72.3
Debt securities 27.8 37.0 23.8
Alternative investments(a) 2.8 4.5 2.8
Cash and cash equivalents — 0.6 1.1
Total 100.0 100.0 100.0
(a) Private equity, venture capital, private debt and real estate.
(b) Real estate, insurance contracts and other investments.
(c) Reflects postretirement plan assets, which support a portion of our U.S. retiree medical plans.
All long-term asset allocation targets reflect our asset class return expectations and tolerance for investment risk within the context
of the respective plans’ long-term benefit obligations. The long-term asset allocation is supported by an analysis that incorporates
historical and expected returns by asset class, as well as volatilities and correlations across asset classes and our liability profile.
This analysis, referred to as an asset-liability analysis, also provides an estimate of expected returns on plan assets, as well as a
forecast of potential future asset and liability balances. Due to market conditions and other factors, actual asset allocations may vary
from the target allocation outlined above. For the U.S. qualified pension plans, in late 2007, we modified our strategic asset target
allocation to reduce the volatility of our plan funded status and the probability of future contribution requirements. Our target
allocations were revised to increase the debt securities allocation by 10% and to reduce the global equity securities allocation by a
corresponding amount. The year-end 2008 cash allocations of 2.3% for U.S. qualified pensions plans and 8.7% for international
pension plans were above the target allocation, primarily due to cash raised from the termination of certain investment strategies,
which will be redeployed during 2009. The assets are periodically rebalanced back to the target allocation.
The U.S. qualified pension plans held no shares of our common stock as of December 31, 2008 and 2007. The plans received no
dividends on shares of our common stock in 2008 and approximately $12 million in dividends on shares of our common stock in
2007.
F. Cash Flows
It is our practice to fund amounts for our qualified pension plans that are at least sufficient to meet the minimum requirements set
forth in applicable employee benefit laws and local tax laws.
The following table presents expected cash flow information:
PENSION PLANS POST-
RETIREMENT
PLANS
FOR THE YEAR ENDED DECEMBER 31,
(MILLIONS OF DOLLARS)
U.S.
QUALIFIED
U.S. SUPPLEMENTAL
(NON-QUALIFIED) INTERNATIONAL
Employer contributions:
2009 (estimated) $ 2 $107 $ 309 $161
Expected benefit payments:
2009 $ 625 $107 $ 279 $182
2010 453 65 283 185
2011 464 68 292 190
2012 477 67 306 192
2013 497 70 314 195
2014–2018 2,868 373 1,745 942
2008 Financial Report 75