Toyota 2005 Annual Report Download - page 109

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS >107
The following pension benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
U.S. dollars
Years ending March 31, Yen in millions in millions
2006 ................................................................................................................................................................. ¥72,184 $672
2007 ................................................................................................................................................................. 78,137 728
2008 ................................................................................................................................................................. 77,379 721
2009 ................................................................................................................................................................. 79,998 745
2010 ................................................................................................................................................................. 79,568 741
from 2011 to 2015........................................................................................................................................... 388,551 3,617
Total ............................................................................................................................................................ 775,817 7,224
The expected rate of return on plan assets is determined
after considering several applicable factors including, the
composition of plan assets held, assumed risks of asset
management, historical results of the returns on plan
assets, Toyota’s principal policy for plan asset manage-
ment, and forecasted market conditions.
Toyota’s policy and objective for plan asset manage-
ment is to maximize returns on plan assets to meet future
benefit payment requirements under risks which Toyota
considers permissible. Asset allocations under the plan
asset management are determined based on Toyota’s plan
asset management guidelines which are established to
achieve the optimized asset compositions in terms of the
long-term overall plan asset management. Prior to making
individual investments, Toyota performs in-depth assess-
ments of corresponding factors including risks, transac-
tion costs and liquidity of each potential investment under
consideration. To measure the performance of the plan
asset management, Toyota establishes bench mark return
rates for each individual investment, combines these
individual bench mark rates based on the asset composi-
tion ratios within each asset category, and compares the
combined rates with the corresponding actual return rates
on each asset category.
Toyota expects to contribute ¥83,862 million ($781
million) to its pension plan in the year ending March 31,
2006.
Toyota’s pension plan weighted-average asset allocations as of March 31, 2004 and 2005, by asset category are as follows:
Plan assets at March 31,
2004 2005
Equity securities................................................................................................................................................. 49.4% 64.0%
Debt securities.................................................................................................................................................... 16.9 21.5
Real estate........................................................................................................................................................... 0.3 0.5
Other .................................................................................................................................................................. 33.4 14.0
Total............................................................................................................................................................... 100.0% 100.0%
Weighted-average assumptions used to determine net periodic pension cost for the years ended March 31, 2003, 2004
and 2005 are as follows:
For the years ended March 31,
2003 2004 2005
Discount rate.......................................................................................................................... 2.5% 2.1% 2.2%
Expected return on plan assets ............................................................................................. 2.7% 2.1% 2.1%
Rate of compensation increase ............................................................................................. 1.5–6.0% 0.8–9.7% 0.5–9.7%