Canon 2008 Annual Report Download - page 84

82
Weighted-average assumptions used to determine net
periodic bene
fi
t cost are as
f
ollows
:
Years en
d
e
d
Decem
b
er 3
1
J
apanese plan
s
F
oreign plan
s
2008 2
00
7 2
006
2008 2
00
7 2
006
D
iscou
n
t
r
ate
2.5%
2
.5
%
2.5
%
5.1% 4.5
%
4.8
%
Assumed rate o
f
increase
in
f
uture compensation level
s
2.9%
2
.9
%
2.9
%
3.1% 2.9
%
2.6
%
E
xpected long-term rate o
f
return on plan asset
s
3.7%
3
.9
%
4.5
%
6.5%
6
.0
%
6
.4
%
Canon determines the expected lon
g
-term rate o
f
return
based on the expected lon
g
-term return o
f
the various asset
categories in w
h
ic
h
it invests. Canon consi
d
ers t
h
e current
ex
p
ectations for future returns and the actual historical returns
o
f
each plan asset cate
g
or
y.
December 3
1
J
apanese p
l
an
s
F
oreign p
l
an
s
2008
200
7
T
arget
a
ll
ocat
i
on
2008
200
7
T
arget
a
ll
ocat
i
on
Asset category
:
E
quit
y
securitie
s
22.7%
3
3.6
%
31.9
%
43.3% 52.4
%
30.3%
D
ebt
secu
ri
t
i
es
52.0 45.
2
4
6
.7 42.5
33
.
8
5
9
.
9
Cas
h
0.6 1.1 0.1 1.3
—
1
.6
Life insurance company general account
s
23.8 1
9
.
5
20
.4 —
—
—
Ot
h
e
r0.9
0
.
6
0
.
9
12.9 1
3
.
8
8
.
2
100.0% 100.0
%
100.0
%
100.0% 100.0
%
100.0
%
Plan asset
s
The wei
g
hted-avera
g
e asset allocations o
f
Canon’s bene
fi
t plans
at Decem
b
er 31, 2008 an
d
2007 an
d
tar
g
et asset a
ll
ocation
by
asset category are as follows
:
Canon’s investment po
l
icies are
d
esigne
d
to ensure a
d
equate
plan assets are available to provide future payments of pension
bene
fi
ts to eligible participants. Taking into account the expected
lon
g
-term rate o
f
return on plan assets, Canon
f
ormulates a
“model”
p
ortfolio com
p
rised of the o
p
timal combination of
equity securities an
d
d
e
b
t securities. P
l
an assets are investe
d
in
individual equity and debt securities using the guidelines of the
“model” port
f
olio in order to produce a total return that will
matc
h
t
h
e expecte
d
return on a mi
d
-term to
l
on
g
-term
b
asis.
Canon eva
l
uates t
h
e gap
b
etween expecte
d
return an
d
actua
l
return of invested
p
lan assets on an annual basis to determine if
such di
ff
erences necessitate a revision in the
f
ormulation o
f
the
“model” port
f
olio. Canon revises the “model” port
f
olio when
an
d
to t
h
e extent consi
d
ere
d
necessar
y
to ac
h
ieve t
h
e expecte
d
long-term rate of return on plan assets
.
The plan’s equit
y
securities include common stock o
f
the
Company and certain of its subsidiaries in the amounts of ¥485
million
(
$5,330 thousand
)
and ¥1,257 million at December 31,
2008 and 2007, respectively.
Co
n
t
ri
but
i
o
n
s
Canon ex
p
ects to contribute ¥14,439 million ($158,670
thousand) to its Ja
p
anese defi ned benefi t
p
ension
p
lans and
¥3,485 million (
$
38,297 thousand) to its forei
g
n defi ned benefi t
pension plans
f
or the
y
ear endin
g
December 31, 2009
.
Estimated future benefi t pa
y
ment
s
The
f
ollowing bene
fi
t payments, which re
fl
ect expected
f
uture
service, as appropriate, are expected to be paid
:
Year en
d
in
g
Decem
b
er 31
:
Ja
p
anese
p
lans Forei
g
n plans
M
illions of
y
e
n
T
h
ousa
n
ds
of
U
.
S
.
do
ll
a
r
s
M
illions of
y
e
n
Th
ousa
n
ds
o
f
U
.
S
.
do
ll
a
r
s
2009
¥ 11
,
77
9
$
129
,
440 ¥ 1
,
5
66
$
17
,
209
2
01
0
12,849 141,198 1,73
3
19,04
4
20
11 14
,
50
6
159
,
407 1
,
78
4
19
,
60
4
20
1
2
15,7
00
17
2
,5
2
7 1,
902
20
,
90
1
2
01
3
16,91
8
185,912 1,851 20,341
2
014—201
8
105
,
70
6
1
,
161
,
604 12
,
48
3
137
,
176
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CANON INC. AND SUBSIDIARIES