Fujitsu 2002 Annual Report Download - page 38

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10. Retirement benefits
The Company and the majority of the consolidated subsidiaries in Japan have unfunded lump-sum retirement plans
which, in general, cover all employees who retire before a retirement age prescribed by in their internal codes. The
employees are entitled to the benefits primarily based on their length of service and basic salary as of the retirement date.
In addition, the Company and the majority of the consolidated subsidiaries in Japan participate in Group contributory
defined benefit plans which cover substantially all employees. The major contributory defined benefit plan (the “Plan”),
which is referred to as the Fujitsu Welfare Pension Fund, entitles employees upon retirement at the normal retirement age
to either a lump-sum payment or pension annuity payments for life commencing at age 60 or a combination of both based
on their length of service, basic salary as of the retirement date and the number of years of participation in the Plan. The
contributions of the Company and the subsidiaries covered by the Plan and their employees are made to the Fujitsu
Welfare Pension Fund which is an external organization.
For the year ended March 31, 2001, the government portion of the projected benefit obligation of the Welfare Pension
Fund for the Company and the subsidiaries was reduced under the revision of Japanese Welfare Pension Insurance Law,
effective in March 2000.
The majority of the consolidated subsidiaries outside Japan have defined benefit plans and/or defined contribution
plans covering substantially all their employees.
The balances of the projected benefit obligation and plan assets, funded status and the amounts recognized in the
consolidated financial statements as of March 31, 2001 and 2002 and the components of net periodic benefit cost for the
year ended March 31, 2001 and 2002 are summarized as follows :
Projected benefit obligation and plan assets Yen U.S.Dollars
(millions) (thousands)
At March 31 (Consolidated domestic accounts) 2001 2002 2002
Projected benefit obligation ¥(1,567,189) ¥(1,659,772) $(12,479,489)
Plan assets 1,009,503 989,237 7,437,872
Projected benefit obligation in excess of plan assets (557,686) (670,535) (5,041,617)
Unrecognized net obligation at transition 235,396 210,036 1,579,218
Unrecognized actuarial loss 317,350 435,814 3,276,797
Unrecognized prior service cost (reduced obligation) (87,269) (78,188) (587,879)
Prepaid pension cost (10,654) (13,611) (102,338)
Accrued retirement benefits ¥(102,863) ¥(116,484) $ (875,819)
Components of net periodic benefit cost Yen U.S.Dollars
(millions) (thousands)
Years ended March 31 (Consolidated domestic accounts) 2001 2002 2002
Service cost ¥69,229 ¥59,307 $ 445,917
Interest cost 47,601 46,777 351,707
Expected return on plan assets (41,792) (41,400) (311,278)
Amortization of unrecognized obligation for retirement benefits:
Amortization of net obligation at transition 26,264 26,311 197,827
Amortization of actuarial loss 0 18,508 139,158
Amortization of prior service cost (3,801) (9,095) (68,384)
Net periodic benefit cost ¥97,501 ¥100,408 $ 754,947
The assumptions used in accounting for the plans at March 31, 2001 and 2002 were as follows
Years ended March 31 (Consolidated domestic accounts) 2001 2002
Discount rate 3.0% 3.0%
Expected rate of return on plan assets 3.3% 4.1%
Method of allocating actuarial loss Straight-line method over the Straight-line method over
employees’ average remaining the employees’ average remaining
service period service period
Method of allocating prior service obligation Straight-line method over Straight-line method over
10 years 10 years
Amortization period for net obligation at transition The Company : The Company :
Fully recognized at transition Fully recognized at transition
Consolidated subsidiaries in Consolidated subsidiaries in
Japan : 10 years Japan : 10 years
FINANCIAL
SECTION