Hitachi 2005 Annual Report Download - page 67

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Hitachi, Ltd. Annual Report 2006 65
The objective of the Company’s investment policy is to ensure a stable return from the plan’s investments over the long
term, which allows the Company’s and certain subsidiaries’ pension funds to meet their future obligations. In order to
achieve the above objective, a target rate of return is established, taking into consideration composition of participants,
level of funded status, the Company’s and certain subsidiaries’ capacity to absorb risks and the current economic
environment. Also, a target asset allocation is established to achieve the target rate of return, based on expected rate of
return by each asset class, standard deviation of rate of return and correlation coefficient among the assets. The investments
are diversified primarily into domestic and foreign equity and debt securities according to the target asset allocation.
Rebalancing will occur if market fluctuates in excess of certain levels. The Company and certain subsidiaries periodically
review actual returns on assets, economic environments and their capacity to absorb risk and realign the target asset
allocation if necessary.
The Company and its subsidiaries expect to contribute ¥126,633 million ($1,082,233 thousand) to their defined benefit
plans for the year ending March 31, 2007.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid.
Thousands of
Years ending March 31 Millions of yen U.S. dollars
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥115,138 $ 984,085
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,640 1,014,017
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,948 1,093,573
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,010 1,153,932
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,409 1,165,889
2012–2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 656,315 5,609,530
(b) Defined contribution plans
The Company and certain subsidiaries have a number of defined contribution plans. The amount of cost recognized for
the Company’s and certain subsidiaries’ contributions to the plans for the years ended March 31, 2006, 2005 and 2004
were ¥11,776 million ($100,650 thousand), ¥10,749 million and ¥7,718 million, respectively.