Lenovo 2009 Annual Report Download - page 72

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DIRECTORS’ REPORT (Continued)
2008/09 Annual Report Lenovo Group Limited
70
Retirement scheme arrangements (continued)
Defined benefit pensions plans (continued)
Japan-Pension Plan
The Company operates a hybrid plan that consists of a defined contribution up to the annual tax-deductible limit (Yen 216,000) plus
a cash balance plan with contributions of 7% of pay. The plan is funded by company contributions to a qualified pension fund and
an irrevocable trust fund which is held for the sole benefit of participants and beneficiaries.
For the year ended March 31, 2009, an amount of US$3,695,000 was charged to the income statement with respect to this plan.
The principal results of the most recent actuarial valuation of the plan at March 31, 2009 were the following:
• The actuarial valuation was prepared by Mitsubishi Trust Bank. The actuaries involved are fully qualified under the
requirements of Japanese law.
• The actuarial method used was the Projected Unit Credit Cost method and the principal actuarial assumptions were:
– Discount rate: 2.50%
– Future revaluation rate: 2.50%
– Future salary increases: 3.10%
• The plan was 58% funded at the actuarial valuation date.
• There was a deficit of US$33,987,000 under this plan at the actuarial valuation date.
Germany-Pension Plan
The Company operates a hybrid plan that provides a defined contribution for some participants and a final pay defined benefit for
other participants, depending on which former IBM plan they were in.
Employees hired by IBM before January 1, 1992 have a defined benefit based on a final pay formula. Employees hired from 1992 to
1999 have a combination of a defined benefit based on a final pay formula and a defined contribution plan with employee required
contributions of 7% of pay above the social security ceiling and a 100% company match. Employees hired in or after 2000 have a
combination of a cash balance plan with an employer contribution of 2.95% of pay below the social security ceiling, and a voluntary
defined contribution plan where employees can contribute specific amounts through salary sacrifice.
The plan is partially funded by company and employee contributions to an insured support fund with DBV-Winterthur up to the
maximum tax-deductible limits. In line with standard practice in Germany, the remainder is unfunded (book reserve).
For the year ended March 31, 2009, an amount of US$1,607,000 was charged to the income statement with respect to this plan.
The principal results of the most actuarial valuation of the plan at March 31, 2009 were the following:
• The actuarial valuation was prepared by Kern, Mauch & Kollegen. The actuaries involved are fully qualified under German law.
• The actuarial method used was the Projected Unit Credit Cost method and the principal actuarial assumptions were:
– Discount rate: 5.00%
– Future salary increases: 2.20%
– Future pension increases: 1.75%
• The plan was 63% funded at the actuarial valuation date.
• There was a deficit of US$8,909,000 under this plan at the actuarial valuation date.