How are the invested assets of the U.K. Plan held for Dollar Rent A Car?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
| (In millions) | | December 31, 2024 | | December 31, 2023 | | | | | | | |-----------------------------------------|---------|-------------------|-----------------------|-------------------|-----------|-----------------------|--|--|--|--| | Asset Category | Level 1 | Level 2 | Measured at NAV(1) | Level 1 | Level 2 | Measured at NAV(1) | | | | | | Cash | $ 7 | $ — | $ — | $ 9 | $ — | $ — | | | | | | Short Term Investments | — | 23 | — | — | 36 | — | | | | | | Equity Funds(2): | | | | | | | | | | | | U.S. Large Cap | — | — | — | — | 45 | — | | | | | | U.S. Small Cap | — | — | — | — | 5 | — | | | | | | International Large Cap | — | — | — | — | 20 | — | | | | | | International Small Cap | — | — | — | — | 3 | — | | | | | | International Emerging Markets | — | — | — | — | 5 | 4 | | | | | | Fixed Income Securities: | | | | | | | | | | | | U.S. Treasuries | — | 9 | — | — | 1 | — | | | | | | Corporate Bonds | — | 108 | 33 | — | 155 | 32 | | | | | | Government Bonds | — | 4 | — | — | 4 | — | | | | | | Municipal Bonds | — | 2 | — | — | 4 | — | | | | | | Non-Investment Grade Fixed Income(2) | — | 139 | — | — | 19 | — | | | | | | Total fair value of pension plan assets | $ 7 | $ 285 | $ 33 | $ 9 | $ 297 | $ 36 | | | | | (1) Includes certain investments where the fair value measurement utilizes the net asset value ("NAV"), and as such, are not classified in the fair value levels above.
The U.K. Plan
The Company's U.K. pension plan (the "U.K. Plan") has a target allocation of 12% actively managed diversified growth and multi-asset credit funds, 8% passive equity funds and 80% protection portfolio that consists of liability driven investments, Sterling liquidity fund and U.K. corporate bonds. The actively managed diversified growth and multi-asset credit funds are intended to deliver a long-term equity-like return but with reduced levels of volatility. The protection portfolio is designed to partially hedge the interest rate and inflation expectation exposure of the liabilities which are measured on a local regulatory basis. The amount that is required to be invested in each fund to maintain target hedge ratios will vary over time as the value of the liabilities change and the allocations within the protection portfolio will be allowed to vary accordingly. All of the invested assets of the U.K. Plan are held via pooled funds managed by professional investment managers. The U.K. Plan assumes a 5.1% expected long-term weighte
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the invested assets of the U.K. Plan are managed through pooled funds. These funds are overseen by professional investment managers.
The U.K. Plan's assets are strategically allocated across different investment types. A portion, 12%, is invested in actively managed diversified growth and multi-asset credit funds, which aim to provide equity-like returns with lower volatility. Another 8% is allocated to passive equity funds. The largest portion, 80%, is dedicated to a protection portfolio that includes liability-driven investments, a Sterling liquidity fund, and U.K. corporate bonds. This protection portfolio is designed to hedge against interest rate and inflation risks associated with the plan's liabilities.
The allocation strategy allows for adjustments over time to maintain target hedge ratios, responding to changes in the value of liabilities. The fair value measurements of the U.K. Plan assets rely on observable inputs, including quoted prices for identical assets or liabilities in active markets (Level 1) and significant observable inputs (Level 2) that reflect quoted prices for similar assets or liabilities in active markets. The U.K. Plan assumes a 5.1% expected long-term weighted-average rate of return on assets for the Plan in total.