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FINANCIAL SECTION
Nissan Annual Report 2004
82
9. RETIREMENT BENEFIT PLANS
The Company and its domestic consolidated subsidiaries have defined benefit plans, i.e., welfare pension fund plans (“WPFP”), tax-qualified
pension plans and lump-sum payment plans, covering substantially all employees who are entitled to lump-sum or annuity payments, the amounts
of which are determined by reference to their basic rates of pay, length of service, and the conditions under which termination occurs. Certain
foreign consolidated subsidiaries have defined benefit and contribution plans.
The following table sets forth the funded and accrued status of the plans, and the amounts recognized in the consolidated balance sheets as
of March 31, 2005 and 2004 for the Company’s and the consolidated subsidiaries’ defined benefit plans:
Thousands of
Millions of yen U.S. dollars
2004 2003 2004
As of Mar. 31, 2005 Mar. 31, 2004 Mar. 31, 2005
Retirement benefit obligation....................................................................................................................................... ¥(1,217,260) ¥(1,041,483) $(11,376,262)
Plan assets at fair value.................................................................................................................................................... 500,815 377,169 4,680,514
Unfunded retirement benefit obligation............................................................................................................... (716,445) (664,314) (6,695,748)
Unrecognized net retirement benefit obligation at transition ........................................................... 120,718 131,666 1,128,206
Unrecognized actuarial gain or loss........................................................................................................................ 154,689 152,867 1,445,691
Unrecognized prior service cost................................................................................................................................. (66,720) (61,833) (623,551)
Net retirement benefit obligation .............................................................................................................................. (507,758) (441,614) (4,745,402)
Prepaid pension cost........................................................................................................................................................... 445 652 4,159
Accrued retirement benefits.......................................................................................................................................... ¥ (508,203) ¥ (442,266) $ (4,749,561)
The substitutional portion of the benefits under the WPFP has been included in the amounts shown in the above table.
The Company received the approval from the Minister of Health, Labor and Welfare (“MHLW”) in the year ended March 31, 2003 with respect
to its application for exemption from the obligation for benefits related to future employee services under the substitutional portion of the WPFP.
Certain domestic consolidated subsidiaries received the same approval from MHLW during the year ended March 31, 2004. In accordance with
the transitional provision stipulated in “Practical Guidelines for Accounting for Retirement Benefits,” the Company and the domestic consolidated
subsidiaries accounted for the separation of the substitutional portion of the benefit obligation from the corporate portion of the benefit obligation
under their WPFPs as of the dates of approval for their exemption assuming that the transfer to the Japanese government of the substitutional
portion of the benefit obligation and related pension plan assets had been completed as of those dates. As a result, the Company recognized a
loss of ¥30,945 million for the year ended March 31, 2003 and the domestic consolidated subsidiaries recognized an aggregate gain of ¥3,669
million and an aggregate loss of ¥1,587 million for the year ended March 31, 2004. The pension assets to be transferred were calculated at
¥35,770 million for the domestic consolidated subsidiaries at March 31, 2004 and ¥241,203 million for the Company at March 31, 2003.
The components of retirement benefit expenses for the years ended March 31, 2005, 2004 and 2003 are outlined as follows:
Thousands of
Millions of yen U.S. dollars
2004 2003 2002 2004
For the years ended Mar. 31, 2005 Mar. 31, 2004 Mar. 31, 2003 Mar. 31, 2005
Service cost....................................................................................................................................................................... ¥47,802 ¥48,418 ¥ 51,543 $446,748
Interest cost ...................................................................................................................................................................... 33,288 33,012 45,269 311,103
Expected return on plan assets........................................................................................................................ (17,999) (15,523) (26,708) (168,215)
Amortization of net retirement benefit obligation at transition................................................ 12,009 14,169 24,280 112,234
Amortization of actuarial gain or loss........................................................................................................... 12,298 18,689 11,464 114,934
Amortization of prior service cost.................................................................................................................... (5,431) (7,049) (7,762) (50,757)
Other....................................................................................................................................................................................... 179 57 5 1,673
Retirement benefit expenses ............................................................................................................................. 82,146 91,773 98,091 767,720
(Gain) loss on return of the substitutional portion of
welfare pension fund plans............................................................................................................................... (1,107) (5,594) 30,945 (10,346)
Total......................................................................................................................................................................................... ¥81,039 ¥86,179 ¥129,036 $757,374