Mitsubishi 2008 Annual Report Download - page 70

68 mitsubishi motors corporation annual report 2008
15. Retirement Benefits
MMC and its consolidated subsidiaries have defined benefit pension plans for their employees. The plans include contributory plans in
accordance with the Welfare Pension Institute Law of Japan, tax-qualified plans, and non-contributory severance plans. Additional retire-
ment benefits are paid in certain cases upon an employee’s retirement. Certain foreign consolidated subsidiaries have defined contribu-
tion pension plans. At March 31, 2008, MMC and its consolidated subsidiaries have 1 fund for contributory plans in accordance with the
Welfare Pension Insurance Law, and 13 funds for tax-qualified plans. MMC and its consolidated subsidiaries have 15 non-contributory
severance plans.
The funded status of multi-employer pension plans included in the above plans which are accounted for as defined contribution
schemes as of March 31, 2008 was as follows:
In millions of yen
In thousands of
U.S. dollars
Pension Plan assets ¥36,138 $360,694
Benefit obligations under pension plan rules 24,625 245,783
Difference 11,513 114,911
The ratio of MMC and its consolidated subsidiaries’ payments to total contributions of the multi-employer plans as of March 31, 2008
was 42.7%. This ratio does not equal to the ratio of the amount actually contributed by the MMC group.
Defined Benefit Plans
The discount rates used to determine the retirement benefit obligation were 1.5% – 2.5% for MMC and its domestic consolidated
subsidiaries, 5.1% – 7.8% for its foreign consolidated subsidiaries, and 1.5% – 2.5% for MMC and its domestic consolidated subsidiaries,
4.0% – 5.8% for its foreign consolidated subsidiaries at March 31, 2008 and 2007, respectively. The rates of return on plan assets assumed
were 0.8% – 4.0% for MMC and its domestic consolidated subsidiaries, 4.9% – 8.0% for its foreign consolidated subsidiaries, and 0.8%
– 4.0% for MMC and its domestic consolidated subsidiaries, 4.0% – 8.0% for its foreign consolidated subsidiaries for the year ended March
31, 2008 and 2007, respectively.
Prior service cost is amortized using the straight line method over periods of 1 to 21 years, and 5 to 21 years for the years ended March
31, 2008 and 2007. These periods are within the estimated average remaining service years of the employees, respectively.
The amortization period for actuarial gains and losses starts from the subsequent fiscal year and actuarial gains and losses are amor-
tized by the straight line method over the periods of 5 to 21 years for the years ended March 31, 2008 and 2007. These periods are within
the estimated average remaining service years of the employees.
Unrecognized net obligations and assets at the date of initial application are amortized within one year.
The retirement benefit obligation for MMC and its consolidated subsidiaries’ employees’ defined benefit plans at March 31, 2008 and
2007 are summarized as follows:
In millions of yen
In thousands of
U.S. dollars
2008 2007 2008
Retirement benefits obligation ¥(184,183) ¥(191,009) $(1,838,341)
Pension plan assets at fair value 67,122 76,310 669,955
Unfunded status (117,060) (114,698) (1,168,385)
Unrecognized actuarial losses 17,327 11,557 172,945
Unrecognized prior service costs 3,304 2,812 32,980
Net recognized retirement benefits obligation (96,428) (100,329) (962,460)
Prepaid pension premiums 6,866 5,552 68,532
Accrued retirement benefits ¥(103,295) ¥(105,881) $(1,030,992)
Some of the consolidated subsidiaries adopt the simplified method for the calculation of retirement benefits obligation.