Ricoh 2008 Annual Report Download - page 54

53 ANNUAL REPORT 2008
The projected benefit obligations and the fair value of plan assets for the pension plans with projected benefit obligations in excess of plan assets, and the
accumulated benefit obligations and the fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets are as
follows:
Thousands of
Millions of Yen U.S. Dollars
2007 2008 2008
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations ¥240,593 ¥379,662 $3,796,620
Fair value of plan assets 150,746 284,268 2,842,680
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations ¥221,023 ¥362,827 $3,628,270
Fair value of plan assets 145,278 279,585 2,795,850
13. SHAREHOLDERS’ INVESTMENT
The Corporation Law of Japan provides that an amount equal to 10% of cash dividends and other distributions from retained earnings paid by
the Company and its domestic subsidiaries be appropriated as additional paid-in capital or legal reserve. No further appropriation is required
when the total amount of the additional paid-in capital and legal reserve equals to 25% of common stock. Certain foreign subsidiaries are also
required to appropriate their earnings to legal reserves under the laws of the respective countries. Legal reserves included in retained earnings
as of March 31, 2007 and 2008 were ¥17,318 million and ¥17,462 million ($174,620 thousand), respectively, and are restricted from being
used as dividends.
The Corporation Law of Japan requires a company to obtain the approval of shareholders for transferring on amount between common stock
and additional paid-in capital. The Law also permits a company to transfer an amount of common stock or additional paid-in capital to retained
earnings in principle upon approval of shareholders.
Cash dividends are approved by the shareholders after the end of each fiscal period or are declared by the Board of Directors after the end of
each interim six-month period. Such dividends are payable to shareholders of record at the end of each such fiscal or interim six-month
period. At the Ordinary General Meeting of Shareholders held on June 26, 2008, the shareholders approved the declaration of a cash dividend
(¥17 per share) on the common stock totaling ¥12,256 million ($122,560 thousand), which would be paid to shareholders of record as of
March 31, 2008. The declaration of this dividend has not been reflected in the consolidated financial statements as of March 31, 2008.
The amount of retained earnings legally available for dividend distribution is that recorded in the Company’s non-consolidated books and
amounted to ¥424,067 million ($4,240,670 thousand) as of March 31, 2008.
Ricoh’s benefit plan asset allocation as of March 31, 2007 and 2008 are as
follows:
2007 2008
Equity securities 51.5% 45.7%
Debt securities 17.0% 20.9%
Life insurance company general accounts 24.2% 15.1%
Other 7.3% 18.3%
Total 100.0% 100.0%
Common stock and bonds of the Company and certain of its domestic
subsidiaries included in plan assets were immaterial at March 31, 2007
and 2008.
Ricoh’s investment policies and strategies for the pension benefits do not
use target allocations for the individual asset categories. Ricoh’s
investment goals are to maximize returns subject to specific risk
management policies. Its risk management policies permit investments in
mutual funds and debt and equity securities and prohibit direct investment
in derivative financial instruments. Ricoh addresses diversification by the
use of mutual fund investments whose underlying investments are in
domestic and international fixed income securities and domestic and
international equity securities. These mutual funds are readily marketable
and can be sold to fund benefit payment obligations as they become
payable.
Ricoh uses a December 31 measurement date for the pension plans.
Ricoh expects to contribute ¥13,100 million ($131,000 thousand) to its
pension plans for the year ending March 31, 2009. The estimated net
actuarial loss and prior service cost for Ricoh’s pension fund plans that
will be amortized from accumulated other comprehensive income (loss)
into net periodic pension cost over the next fiscal year ending March, 2009
are ¥5,094 million ($50,940 thousand) and ¥(4,124) million ($(41,240)
thousand), respectively.
The following benefit payments, which reflect expected future service, as
appropriate, are expected to be paid:
Thousands of
Years ending March 31 Millions of Yen U.S. Dollars
2009 ¥ 20,801 $208,010
2010 21,162 211,620
2011 19,926 199,260
2012 20,211 202,110
2013 21,487 214,870
2014– 2018 111,082 1,110,820
Employees of certain domestic subsidiaries not covered by the employee’s
pension fund (“EPF”) plan are primarily covered by unfunded retirement
allowances plans.