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Notes to Consolidated Financial Statements
13. PENSION AND SEVERANCE COSTS
The Company and most of its domestic consolidated subsidiaries have contributory and noncontributory defined benefit plans
and lump-sum retirement benefit plans, while the Company and some of its subsidiaries have defined contribution plans and
prepaid retirement allowance plans. Some overseas subsidiaries have defined benefit plans.
The following table sets forth the employee benefit obligations, plan assets and funded status of the Company and its consolidated
subsidiaries at March 31, 2012 and 2011.
Thousands of
Millions of yen
U.S. dollars
2012 2011 2012
Benefit obligation at the end of the fiscal year............................................. ¥(252,293) ¥(250,795) $(3,069,631)
Fair value of plan assets at the end of the fiscal year.................................. 222,670 218,486 2,709,210
Funded status:
Plan assets in excess of (less than) benefit obligation.............................. (29,623) (32,309) (360,421)
Unrecognized actuarial differences.......................................................... 64,657 69,170 786,677
Unrecognized prior service cost.............................................................. (1,411) (1,716) (17,167)
Subtotal..................................................................................................... 33,623 35,145 409,089
Advances to funded pension plans............................................................. 63,729 64,029 775,387
Accrued pension and severance costs for employees
in the consolidated balance sheets........................................................... ¥ (30,106) ¥ (28,884) $ (366,298)
In addition, retirement benefits for directors and corporate auditors of certain subsidiaries of ¥1,516 million (US$18,445 thousand)
and ¥1,497 million are included in accrued pension and severance costs as of March 31, 2012 and 2011, respectively.
Pension and severance costs of the Company and its consolidated subsidiaries consist of the following components for the
years ended March 31, 2012 and 2011:
Thousands of
Millions of yen
U.S. dollars
2012 2011 2012
Service cost............................................................................................... ¥ 9,111 ¥ 9,411 $110,853
Interest cost............................................................................................... 6,023 6,152 73,281
Expected return on plan assets.................................................................. (2,853) (2,806) (34,712)
Amortization:
Actuarial differences................................................................................ 7,591 7,582 92,359
Prior service cost.................................................................................... 618 (147) 7,519
Net periodic pension and severance costs................................................. ¥20,490 ¥20,192 $249,300
Assumptions used in the accounting for the defined benefit plans for the years ended March 31, 2012 and 2011 are as
follows:
Method of attributing benefits to periods of service........................................
2012 2011
Straight-line basis
(Some subsidiaries
adopt point basis.)
Straight-line basis
(Some subsidiaries
adopt point basis.)
Discount rates................................................................................................ Mainly 2.5% Mainly 2.5%
Long-term rates of expected return on plan assets........................................ 0.0%–5.6% 0.0%–6.8%
Amortization period for prior service cost....................................................... Mainly 15 years Mainly 15 years
Amortization period for actuarial differences...................................................
Average remaining
service period or less
(mainly 15 years)
Average remaining
service period or less
(mainly 15 years)
Annual Report 2012
SUMITOMO ELECTRIC
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