Omron 2004 Annual Report Download - page 54

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52
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation increase rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.0%
2.0
2.0%
2.0
2004 2003
Service cost, less employees’ contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost on projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥19,611
5,804
(4,072)
2,742
¥14,085
$ 75,292
46,868
(39,717)
33,302
$115,745
Thousands of
U.S. dollars
Millions of yen
2003 2004
¥ 7,981
4,968
(4,210)
3,530
¥12,269
2004
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation increase rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5%
3.0
4.0
3.0%
3.0
4.0
2003
2.0%
2.0
3.0
2004 2002
Components of Net Periodic Benefit Cost
The expense recorded for the contributory termination and retirement plans included the following components for the years ended
March 31:
The provisions of SFAS No. 87, “Employers’ Accounting for Pensions,” require the recognition of an additional minimum pension lia-
bility for each defined benefit plan to the extent that a plan’s accumulated benefit obligation exceeds the fair value of plan assets and
accrued pension liabilities. The net change in the minimum pension liability is reflected as other comprehensive income, net of related
tax effect. The unrecognized net actuarial loss and the prior service credit are being amortized over 15 years.
Measurement Date
The Company and certain of its domestic subsidiaries use a December 31measurement date for the majority of their plans. Subsequent
to the measurement date, in February 2004, the Company amended its plan to establish a new formula for determining pension bene-
fits. The effect of this amendment was a decrease of ¥15,546 million($146,660 thousand) in the projected benefit obligation and will be
recorded in the year ending March 31, 2005.
Assumptions
Weighted-average assumptions used to determine benefit obligations at March 31, 2004 and 2003 are as follows:
Weighted-average assumptions used to determine net periodic benefit cost for the years ended March 31,2004, 2003 and 2002 are
as follows:
The expected return on plan assets is determined by estimating the future rate of return on each category of plan assets considering
actual historical returns and current economic trends and conditions.