ANNUAL REPORT 2004 - Luxottica Group

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. Holdings used 8.50% as the expected rate of
return on plan assets for fiscal year 2004. This
assumption was developed using the building
block method. Under this approach, the
assumption was arrived at by applying historical
average total returns by asset class over various
time horizons to the plan’s current and target asset
allocation. The resulting assumption was also
benchmarked against the assumptions used by
other U.S. corporations and the pension trust’s
Asset category
Equity securities
Debt securities
Other
Total
The actual percentages at any given time may vary
from these targeted amounts.
The defined pension plans’ investment policies
provide the framework within which investment
decisions are made, and establish standards to
measure investment manager performance, outline
roles and responsibilities and describe the ongoing
review process. The plans’ investment strategies
include established allocation targets and ranges to
maximize investment return within reasonable and
prudent levels of risk so as to minimize contributions
In thousands of Euro
2005
2006
2007
2008
2009
2010 - 2014
132
Asset allocation
target
65%
35%
0%
100%
actual investment performance over ten and 20 year
periods.
PLAN ASSETS
The weighted-average target asset allocations and
weighted average actual asset allocations by asset
category as of September 30, 2003 and 2004 are
as follows:
2004
64%
35%
1%
100%
needed over time to reach a full funding level and
maintain sufficient liquidity to meet monthly benefit
payments.
BENEFIT PAYMENTS
Luxottica pension
plan assets
2003
62%
35%
3%
100%
Cole pension
plan assets
2004
65%
33%
2%
100%
The following estimated future benefit payments,
which reflect expected future service, are expected to
be paid in the years indicated for both the Luxottica
and Cole plans (translated for convenience at the
December 31, 2004 noon buying rate):
Pension plans
8,644
8,647
9,419
10,392
11,366
78,619
Supplemental plans
263
153
204
864
323
3,339