Mitsubishi 2013 Annual Report Download - page 53

MITSUBISHI MOTORS CORPORATION
Annual Report 2013 51
17. Retirement Benefits
MMC and its consolidated subsidiaries have defined benefit pension
plans including contributory plans in accordance with the Welfare
Pension Institute Law of Japan, defined benefit corporate pension
plans and lump-sum payment plans, and defined contribution pen-
sion plans. Additional retirement benefits are paid in certain cases
upon an employee’s retirement and similar.
Information of multi-employer pension plans included in the above
plans for which the required contribution has been accounted for as
pension expense was as follows at March 31, 2012 and 2011:
(In millions of yen)
March 31,
2012 2011
Pension Plan assets ¥24,581 ¥24,702
Benefit obligations under pension plan rules 26,078 25,165
Difference ¥ (1,497) ¥ (463)
The approximate ratio of MMC and its consolidated subsidiaries’
share of accumulated contributions in the multi-employee plan
obligation is 59.2% and 58.0% as of March 31, 2012 and 2011.
This ratio does not necessarily match the amount of MMC and its
consolidated subsidiaries’ share of the actuarially estimated pension
benefit obligation.
Defined Benefit Plans
The discount rates used to determine the retirement benefit
obligation were 0.9% ~ 2.0% and 1.5% ~ 2.0% for MMC and
its domestic consolidated subsidiaries at March 31, 2013 and
2012, respectively, 3.4% ~ 5.7% and 3.5% ~ 6.2% for its foreign
consolidated subsidiaries at March 31, 2013 and 2012, respectively.
The rates of return on plan assets assumed were 0.7% ~ 4.0% for
MMC and its domestic consolidated subsidiaries, 5.0% ~ 8.0% for
its foreign consolidated subsidiaries at March 31, 2013 and 2012.
Prior service cost is amortized by the straight line method over
periods of 1 to 14 years and 1 to 15 years for the years ended
March 31, 2013 and 2012. This period is within the estimated
average remaining service years of the employees.
The amortization period for actuarial gains and losses starts from
the subsequent year and actuarial gains and losses are amortized
by the straight line method over periods of 5 to 14 years and 5 to
15 years for the years ended March 31, 2013 and 2012. This period
is 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, 2013
and 2012 are summarized as follows:
(In millions of yen)
(In thousands
of U.S. dollars)
March 31,
2013 2012 2013
Retirement benefits obligation
¥(185,113) ¥(175,551) $(1,968,242)
Pension plan assets at fair
value
75,217 61,962 799,756
Unfunded status
(109,896) (113,588) (1,168,485)
Unrecognized actuarial losses
18,858 24,600 200,512
Unrecognized prior service
costs
(9,867) (10,724) (104,914)
Net recognized retirement
benefits obligation
(100,905) (99,712) (1,072,886)
Prepaid pension premiums
10,755 8,889 114,355
Provision for retirement
benefits
¥(111,660) ¥(108,602) $(1,187,242)
Some of the consolidated subsidiaries adopt the simplified
method for the calculation of retirement benefits obligation.
Pension expenses for MMC and its consolidated subsidiaries’
employees’ retirement defined benefit plans for the years ended
March 31, 2013 and 2012 consisted of the following:
(In millions of yen)
(In thousands
of U.S. dollars)
For the years ended March 31,
2013 2012 2013
Service cost ¥8,136 ¥7,818 $ 86,510
Interest cost 4,311 4,177 45,845
Expected return on plan
assets (3,570) (3,302) (37,967)
Amortization of actuarial
losses 2,703 4,137 28,747
Amortization of prior service
costs (30) (1,770) (322)
Pension expenses ¥11,550 ¥11,060 $122,814
Pension expenses of consolidated subsidiaries, which adopt the
simplified method, are included in service cost.
18. Income Taxes
MMC and its domestic consolidated subsidiaries are subject to
corporate, resident and enterprise taxes based on their taxable
income. Income taxes of the foreign consolidated subsidiaries
are generally calculated based on the tax rates applicable in their
countries of incorporation. The consolidated tax payment system is
applied at March 31, 2013 and 2012.