Toyota 2015 Annual Report Download - page 186

TOYOTA MOTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
20. Employee benefit plans:
Pension and severance plans -
Upon terminations of employment, employees of the parent company and subsidiaries in Japan are entitled,
under the retirement plans of each company, to lump-sum indemnities or pension payments, based on current
rates of pay and lengths of service or the number of “points” mainly determined by those. Under normal
circumstances, the minimum payment prior to retirement age is an amount based on voluntary retirement.
Employees receive additional benefits on involuntary retirement, including retirement at the age limit.
Effective October 1, 2004, the parent company amended its retirement plan to introduce a “point” based
retirement benefit plan. Under the new plan, employees are entitled to lump-sum or pension payments
determined based on accumulated “points” vested in each year of service.
There are three types of “points” that vest in each year of service consisting of “service period points” which
are attributed to the length of service, “job title points” which are attributed to the job title of each employee, and
“performance points” which are attributed to the annual performance evaluation of each employee. Under normal
circumstances, the minimum payment prior to retirement age is an amount reflecting an adjustment rate applied
to represent voluntary retirement. Employees receive additional benefits upon involuntary retirement, including
retirement at the age limit.
Effective October 1, 2005, the parent company partly amended its retirement plan and introduced the quasi
cash-balance plan under which benefits are determined based on the variable-interest crediting rate rather than
the fixed-interest crediting rate as was in the pre-amended plan.
The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans,
which are pursuant to the Corporate Defined Benefit Pension Plan Law (CDBPPL). The contributions to the
plans are funded with several financial institutions in accordance with the applicable laws and regulations. These
pension plan assets consist principally of common stocks, government bonds and insurance contracts.
Most foreign subsidiaries have pension plans or severance indemnity plans covering substantially all of their
employees under which the cost of benefits are currently invested or accrued. The benefits for these plans are
based primarily on lengths of service and current rates of pay.
Toyota uses a March 31 measurement date for its benefit plans.
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