Nissan 2006 Annual Report Download - page 72

FINANCIAL SECTION
Nissan Annual Report 2005
70
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. Effective
July 1, 2005, a portion of the benefit obligations under the above plans was transferred to newly established defined contribution plans. In this
connection, the pension plan assets of ¥45,762 million were also transferred to these defined contribution plans during the year ended March
31, 2006.
Certain foreign consolidated subsidiaries have defined benefit and/or defined 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, 2006 and 2005 for the Company’s and the consolidated subsidiaries’ defined benefit plans: Thousands of
Millions of yen U.S. dollars
2005 2004 2005
As of Mar. 31, 2006 Mar. 31, 2005 Mar. 31, 2006
Retirement benefit obligation....................................................................................................................................... ¥(1,239,004) ¥(1,217,260) $(10,589,778)
Plan assets at fair value.................................................................................................................................................... 817,371 500,815 6,986,077
Unfunded retirement benefit obligation............................................................................................................... (421,633) (716,445) (3,603,701)
Unrecognized net retirement benefit obligation at transition............................................................. 99,966 120,718 854,410
Unrecognized actuarial loss........................................................................................................................................... 120,920 154,689 1,033,505
Unrecognized prior service cost................................................................................................................................. (66,714) (66,720) (570,205)
Net retirement benefit obligation .............................................................................................................................. (267,461) (507,758) (2,285,991)
Prepaid pension cost........................................................................................................................................................... 234 445 2,000
Accrued retirement benefits.......................................................................................................................................... ¥ (267,695) ¥ (508,203) $ (2,287,991)
Certain domestic subsidiaries received the approval from the Minister of Health, Labour and Welfare in the years ended March 31, 2006, 2005,
and 2004 with respect to their application for an exemption from the obligation for benefits related to future employee services and for the return
of the past benefit obligation and related pension plan assets under the substitutional portion of the WPFP.
The components of retirement benefit expenses for the years ended March 31, 2006, 2005 and 2004 are outlined as follows:
Thousands of
Millions of yen U.S. dollars
2005 2004 2003 2005
For the years ended Mar. 31, 2006 Mar. 31, 2005 Mar. 31, 2004 Mar. 31, 2006
Service cost........................................................................................................................................................................... ¥41,022 ¥47,802 ¥48,418 $350,615
Interest cost .......................................................................................................................................................................... 36,809 33,288 33,012 314,607
Expected return on plan assets............................................................................................................................ (29,581) (17,999) (15,523) (252,829)
Amortization of net retirement benefit obligation at transition.................................................... 11,265 12,009 14,169 96,282
Amortization of actuarial loss.................................................................................................................................. 12,542 12,298 18,689 107,197
Amortization of prior service cost........................................................................................................................ (5,967) (5,431) (7,049) (51,000)
Other........................................................................................................................................................................................... 2,476 179 57 21,162
Retirement benefit expenses ................................................................................................................................. 68,566 82,146 91,773 586,034
Gain on return of the substitutional portion of
welfare pension fund plans................................................................................................................................... (772) (1,107) (5,594) (6,598)
Loss on implementation of defined contribution plans..................................................................... 3,570 —— 30,513
Total............................................................................................................................................................................................. ¥71,364 ¥81,039 ¥86,179 $609,949
The assumptions used in accounting for the above plans were as follows:
2005 2004
For the years ended Mar. 31, 2006 Mar. 31, 2005
Discount rates Domestic companies....................................................................................................... 2.1% - 2.3% 2.3% - 2.5%
Overseas companies ....................................................................................................... 2.5% - 6.0% 2.5% - 9.5%
Expected rates of return on plan assets Domestic companies....................................................................................................... Mainly 3.0% Mainly 3.0%
Overseas companies ....................................................................................................... 3.0% - 9.0% 2.2% - 9.5%
Amortization period of prior service cost ............................................................................................................................................................... Mainly 9-15 Mainly 9-15
................................................................................................................................................................................................................................................................... years years
Recognition period of actuarial loss............................................................................................................................................................................ Mainly 9-18 Mainly 8-18
................................................................................................................................................................................................................................................................... years years