EFTA Document EFTA01382813

I/A Table of Contents FIRST DATA CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) The Company employs a building block approach in determining the long-term rate of return for plan assets with proper consideration of diversification and re-balancing. Historical markets are studied and long-term historical relationships between equities and fixed-income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. Peer data and historical returns are reviewed to chock for reasonableness and appropriateness. All assumptions are the responsibility of management. Plan assets The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities and plan funded status. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S. and global equity investments. In addition, private equity securities comprise a very small part of the equity allocation. The fixed income allocation is a combination of fixed income investment strategics designed to contribute to the total rate of return of all plan assets while minimizing risk and supporting the duration of plan liabilities. The Company's pension plan target allocation for the U.S. plans based on the investment policy as of December 31, 2014 was 40% equity securities and 60% debt securities. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset and liability studies. The general philosophy of the Benefit Committee in setting the allocation percentages for the domestic plan is to adhere to the appropriate allocation mix necessary• to support the underlying plan liabilities as influenced significantly by the demographics of the participants and the frozen nature of the plan. The goal of the Board of Trustees of the United Kingdom plan is the acquisition of secure assets of appropriate liquidity, which are expected to generate income and capital growth to meet, together with new contributions from the Company, the cost of current and future benefits, as set out in the Trust Deed and Rules. The Trustees, together with the plan's consultants and actuaries, further design the asset allocation to limit the risk of the assets failing to meet the liabilities over the long term. The Truster approach to the investment strategy is to allocate the assets into two pools: 1) Off-risk assets whereby the focus is risk management, protection. and insurance relative to the liability target invested in. but not limited to, debt, United Kingdom government bonds, and United Kingdom government index-linked bonds: and 2) On-risk assets whereby the focus is on retum generation and taking risk in a controlled manner. Such assets could include equities. government bonds, high-yield bonds, property. commodities, or hedge funds. The target allocation for this plan is 40% off-risk assets and 60% on-risk assts. F-46 httplAvvriv.sce.gov/Arehi valedgar/dataN83980/000119312515334479/d31022ds la.htmill 0/14/2015 9:06:38 AM] CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0082310 SONY GM_00228494 EFTA01382813