Pioneer 2008 Annual Report Download - page 56

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PIONEER CORPORATION
54
future cash requirements for pension benefit payments. For
primary domestic pension plans, the target asset allocation is
established based on long-term pension plan asset/liability
studies, and the weighted-average target asset allocation for
these plans at March 31, 2008 is: equity securities 55%, debt
securities 42% and other 3%. All the assets are externally
managed and investment managers have discretion to carry
out investment operations within their respective mandates
specified by the Company.
The Company expects to contribute ¥6,939 million
($69,390 thousand) to its defined benefit plans in the year
ending March 31, 2009.
The following benefit payments, which reflect expected
future service, as appropriate, are expected to be paid:
Years ending March 31 Millions of Yen
Thousands of
U.S. Dollars
2009 ¥ 3,115 $ 31,150
2010 3,409 34,090
2011 4,161 41,610
2012 4,200 42,000
2013 4,639 46,390
Years 2014–2018 27,159 271,590
The Company is subject to a number of different income taxes
which, in the aggregate, indicate a statutory tax rate of approx-
imately 41% for the years ended March 31, 2006, 2007 and
2008 in Japan.
14. Income taxes:
The Company’s provision for income taxes differed from
the provision for income taxes at the statutory tax rates in
Japan as follows:
Millions of Yen
Thousands of
U.S. Dollars
2006 2007 2008 2008
Computed tax expense at normal statutory tax rate ¥(29,178) ¥(3,164) ¥ 1,408 $ 14,080
Increase (decrease) resulting from:
Loss operations 39,814 6,900 23,079 230,790
Realization of tax benefi t of operating loss carryforwards (1,005) (1,797) (540) (5,400)
Expenses not deductible for tax purpose:
Domestic 192 200 263 2,630
Foreign 205 213 329 3,290
Difference in foreign and Japanese tax rates (1,383) (1,110) (2,511) (25,110)
Liquidation of ELDis, Inc. (13,503) – ––
Tax credit for research and development expenses (141) (97) (91) (910)
Other 339 613 (681) (6,810)
Provision for income taxes ¥ (4,660) ¥ 1,758 ¥21,256 $212,560
The unrecognized prior service gain/cost, the unrecog-
nized actuarial loss and the unrecognized net assets at the
date of initial application are being amortized over the average
remaining service period of employees.
The Company determines the expected long-term rate of
return on pension plan assets based on the weighted average
of expected long-term returns on various categories of plan
assets, reflecting the current and target allocation of pension
plan assets. Expected long-term return by asset category is
derived from historical studies by investment advisors.
The pension plan weighted-average asset allocation by
asset category at March 31, 2007 and 2008 is as follows:
Asset Category 2007 2008
Equity securities 56% 51%
Debt securities 39 43 
Other 5 6 
Total 100% 100%
The Company’s investment policy is to maintain a diversi-
fied portfolio of asset classes with the primary goal of produc-
ing an adequate return that, when combined with the
Company’s contribution, will maintain the fund’s ability to meet