Lenovo 2016 Annual Report Download - page 151

149
2015/16 Annual Report Lenovo Group Limited
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 plus a
cash balance plan with contributions of 7% of pay. The plan is funded by Company contributions to a qualified pension
fund, which is held for the sole benefit of participants and beneficiaries.
For the year ended March 31, 2016, an amount of Yen 1,056,175,048 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, 2016 were the following:
• The actuarial valuation was prepared by JP Actuary Consulting Co., Ltd. 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: 0.50%
– Expected return on plan assets: 0.50%
– Future salary increases: Age-group based
• The plan was 58% funded at the actuarial valuation date.
• There was a net liability of Yen 11,059,816,518 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. The Company also operates a defined
benefit plan for Motorola Mobility employees.
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. Employees of Motorola Mobility have a defined benefit based on a final pay formula.
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, 2016, an amount of EUROS 2,685,920 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, 2016 were the following:
• The actuarial valuation was prepared by Kern, Mauch & Kollegen (Motorola Mobility valuation prepared by
AonHewitt). 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: 1.00%
– Future salary increases: Age-group based
– Future pension increases: 2.00%
• The plans were 18% funded at the actuarial valuation date.
• There was a net liability of EUROS 181,806,936 under this plan at the actuarial valuation date.