Honda 2007 Annual Report Download - page 104

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102
The estimated actuarial loss (gain), net transition obliga-
tion and prior service benefit for all domestic defined pension
plans that will be amortized from accumulated other compre-
hensive income into net periodic benefit cost over the next
fiscal year are ¥14,290 million, ¥1,741 million and ¥7,289
million, respectively. And the estimated actuarial loss (gain),
net transition obligation and prior service cost for all foreign
defined pension plans that will be amortized from accumu-
lated other comprehensive income into net periodic benefit
cost over the next fiscal year are ¥4,341 million, ¥41 million
and ¥772 million, respectively.
Weighted-average assumptions used to determine benefit obligation at March 31, 2006 and 2007 were as follows:
2006 2007
Japanese plans:
Discount rate 2.0% 2.0%
Rate of salary increase 2.2% 2.3%
Foreign plans:
Discount rate 4.9–5.8% 5.2–6.0%
Rate of salary increase 3.5–5.2% 2.9–6.4%
Weighted-average assumptions used to determine net periodic benefit cost for each of the years in the three-year period
ended March 31, 2007 were as follows:
2005 2006 2007
Japanese plans:
Discount rate 2.0% 2.0% 2.0%
Rate of salary increase 2.3% 2.3% 2.2%
Expected long-term rate of return 4.0% 4.0% 4.0%
Foreign plans:
Discount rate 5.8–6.8% 5.4–6.3% 4.9–5.8%
Rate of salary increase 3.5–6.7% 3.5–6.7% 3.5–5.2%
Expected long-term rate of return 6.8–8.5% 6.8–8.0% 6.8–8.0%
Honda determines the expected long-term rate of return based on the expected long-term return of the various asset
categories. Honda considers the current expectations for future returns and the actual historical returns of each plan asset
category.
Measurement date
Honda uses a March 31 measurement date for their plans excluding certain foreign subsidiaries which use a December 31
measurement date for their plans.
Plan Assets
Honda’s domestic and foreign pension plan weighted-average asset allocations at March 31, 2006 and 2007, by asset category
are as follows:
2006 2007
Japanese plans:
Equity securities 48% 43%
Debt securities 37% 36%
Other 15% 21%
100% 100%
Foreign plans:
Equity securities 65% 70%
Debt securities 24% 27%
Other 11% 3%
100% 100%