Investor Presentaiton
Assumptions for the expected long-term rate of return on plan assets are based on future expectations for returns for each asset
class and the effect of periodic target asset allocation rebalancing. We adjust the results for the payment of reasonable expenses
of the plan from plan assets. We believe our assumptions are appropriate based on the investment mix and long-term nature of the
plans' investments. Assumptions used for the non-U.S. defined benefit plans reflect the different economic environments within the
various countries.
The target allocation ranges for the plans that hold a substantial majority of the defined benefit assets are as follows:
Asset Category
Non-U.S.
Defined Benefit
U.S. Defined
Benefit
Fixed income securities and cash equivalents
Equity securities
65%
U.S. Retiree
Health Care
50%-65%
35%
35% - 50%
60% - 100%
0% - 40%
We rebalance the plans' investments when they are not within the target allocation ranges.
Weighted average asset allocations as of December 31 are as follows:
Asset Category
Fixed income securities and cash equivalents
Equity securities.
U.S. Defined
Benefit
U.S. Retiree
Health Care
2016 2015 2016 2015
66% 65% 52% 50%
34% 35% 48% 50%
Non-U.S.
Defined Benefit
2016 2015
72% 70%
28% 30%
None of the plan assets related to the defined benefit pension plans and retiree health care benefit plan are directly invested in TI
common stock. As of December 31, 2016, we do not expect to return any of the defined benefit pension plans' assets to TI in the
next 12 months.
The following assumed future benefit payments to plan participants in the next 10 years are used to measure our benefit
obligations. Almost all of the payments, which may vary significantly from these assumptions, will be made from plan assets
and not from company assets.
U.S. Defined
Benefit
U.S. Retiree
Health Care
Non-U.S.
Defined Benefit
2017
$ 128
$ 32
$ 82
2018
120
32
84
2019
86
33
87
2020
91
33
89
2021
101
32
91
2022 2026
450
151
489
Assumed health care cost trend rates for the U.S. retiree health care benefit plan as of December 31 are as follows:
2016
2015
Assumed health care cost trend rate for next year
Ultimate trend rate
Year in which ultimate trend rate is reached
6.75% 7.00%
5.00% 5.00%
2024 2024
A one percentage point increase or decrease in health care cost trend rates over all future periods would have increased or
decreased the accumulated postretirement benefit obligation for the U.S. retiree health care benefit plan as of December 31, 2016,
by $2 million. The service cost and interest cost components of 2016 plan expense would have increased or decreased by less
than $1 million.
Deferred compensation arrangements
We have a deferred compensation plan that allows U.S. employees whose base salary and management responsibility exceed a
certain level to defer receipt of a portion of their cash compensation. Payments under this plan are made based on the participant's
distribution election and plan balance. Participants can earn a return on their deferred compensation based on notional
investments in the same investment funds that are offered in our defined contribution plans.
TEXAS INSTRUMENTS . 2016 FORM 10-K
53
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