NYCB 2017 Annual Report

122 discounted based on a portfolio of high-quality rated bonds (above-median AA curve) for which the Company relies on the Citigroup Pension Liability Index that is published as of the measurement date. The components of net periodic pension credit were as follows for the years indicated: Years Ended December 31, (in thousands) 2017 2016 2015 Components of net periodic pension credit: Interest cost $ 5,616 $ 5,881 $ 6,063 Expected return on plan assets (16,290) (15,627) (17,559) Amortization of net actuarial loss 8,209 9,050 8,208 Net periodic pension credit $ (2,465) $ (696) $ (3,288) The following table indicates the weighted average assumptions used in determining the net periodic benefit cost for the years indicated: Years Ended December 31, 2017 2016 2015 Discount rate 3.9% 4.1% 4.0% Expected rate of return on plan assets 7.5 7.5 8.0 As of December 31, 2017, Retirement Plan assets were invested in two diversified investment portfolios of the Pentegra Retirement Trust (the “Trust”) (formerly known as “RSI Retirement Trust”), a private placement investment fund. The Company (in this context, the “Plan Sponsor”) chooses the specific asset allocation for the Retirement Plan within the parameters set forth in the Trust’s Investment Policy Statement. The long -term investment objectives are to maintain the Retirement P lan’s assets at a level that will sufficiently cover the Plan Sponsor’s long -term obligations, and to generate a return on those assets that will meet or exceed the rate at which the Plan Sponsor’s long -term obligations will grow. The Retirement Plan allocates its assets in accordance with the following targets: • To hold 55% of its assets in equity securities via investment in the Trust’s Long -Term Growth — Equity (“LTGE”) Portfolio, a diversified portfolio that invests in a number of actively and passivel y managed equity mutual funds and collective trusts in order to diversify within U.S. and non-U.S. equity markets; • To hold 44% of its assets in intermediate-term investment- grade bonds via investment in the Trust’s Long - TermGrowth —Fixed Income (“LTGFI” ) Portfolio, a diversified portfolio that invests in a number of fixed- income mutual funds and collective investment trusts, primarily including intermediate-term bond funds with a focus on U.S. investment grade securities and opportunistic allocations to below-investment grade and non-U.S. investments; and • To hold 1% of its assets in a cash-equivalent portfolio for liquidity purposes. In addition, the Retirement Plan holds Company shares, the value of which is approximately equal to 11% of the assets that are held by the Trust. The LTGE and LTGFI portfolios are designed to provide long-term growth of equity and fixed-income assets with the objective of achieving an investment return in excess of the cost of funding the active life, deferred vesting, and all 30-year term and longer obligations of retired lives in the Trust. Risk and volatility are further managed in accordance with the distinct investment objectives of the Trust’s respective portfolios.