Omron 2007 Annual Report Download - page 70

Download and view the complete annual report

Please find page 70 of the 2007 Omron annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 85

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85

69
The assets in the retirement benefit trust at March 31, 2007
consisted of 99.7% equity securities and 0.3% other.
The Company investment policies are designed to ensure
that adequate plan assets are available to provide future pay-
ments of pension benefits to eligible participants. Taking into
account the expected long-term rate of return on plan assets, the
Company formulates a model portfolio comprised of the opti-
mal combination of equity and debt securities in order to pro-
duce a total return that will match the expected return on a mid-
term to long-term basis.
Target allocation of plan assets is 20% equity securities,
66% debt securities and life insurance company general account
and 14% other for both 2007 and 2006.
The Company evaluates the gap between expected return
and actual return of invested plan assets on an annual basis to
determine if such differences necessitate a revision in the model
portfolio. The Company revises the model portfolio to the extent
considered necessary to achieve the expected long-term rate
of return on plan assets.
Equity securities include a common stock of the Company in
the amounts of ¥1 million ($10 thousand) (0.00% of total domes-
tic plan assets), and ¥11 million (0.01% of total domestic plan
assets) at March 31, 2007, and 2006, respectively.
Cash Flows
Contributions
The Companies expect to contribute ¥5,178 million ($43,881
thousand) to their domestic termination and retirement benefit
plans in the year ending March 31, 2008.
Estimated Future Benefit Payments
The following benefit payments, which reflect expected future
service, as appropriate, are expected to be paid:
Weighted-average assumptions used to termination and retirement benefit cost for the years ended March 31, 2007, 2006 and
2005 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.
Discount rate
Compensation increase rate
Expected long-term rate of return on plan assets
2006
2007 2005
2.0%
2.0%
3.0%
2.0%
2.0%
3.0%
2.0%
2.0%
3.0%
Plan assets
The Company’s pension plan weighted-average asset allocation (except for assets in retirement benefit trust) by asset category is as
follows:
Years ending March 31
2008
2009
2010
2011
2012
2013 — 2017
Millions of yen Thousands of
U.S. dollars
¥4,492
5,698
6,532
6,883
6,629
34,340
$38,068
48,288
55,356
58,331
56,178
291,017
Asset Category
Cash
Equity Securities
Debt Securities
Life insurance company general accounts
Other
Total
2007 2006
0.0%
21.1%
48.8%
13.8%
16.3%
100.0%
0.1%
23.9%
46.1%
14.1%
15.8%
100.0%