Trust Recovery Growth Vitalization - Marubeni

9 Employees’ Retirement Benefits
The Company and certain of its subsidiaries have unfunded lumpsum
retirement plans which, in general, cover all employees other
than directors. In addition, the Company and certain of its subsidiaries
have contributory and non-contributory funded pension plans with
independent trustees covering eligible employees. Under the terms
of the lump-sum retirement plans, eligible employees are entitled
under most circumstances, upon mandatory retirement or earlier
voluntary severance, to indemnities based on their compensation as
of the date of severance and years of service.
Effective April 1, 2003, the Company amended its welfare
pension plan to introduce a cash balance plan and to reduce benefits
of certain eligible people, and received approval from the Japanese
government on June 5, 2003.
On April 15, 2003 and May 1, 2004, the Marubeni Welfare
Pension Fund received approval from the Japanese government to
transfer the future and past benefit obligations related to the
substitutional portion for the government-defined benefit prescribed
by the Welfare Pension Insurance Law of Japan, respectively. On
August 25, 2005 the Company transferred them to the government.
According to the consensus reached by the Emerging Issue Task
Force on Issue No. 03-2, Accounting for the Transfer to the Japanese
Marubeni Corporation 2005 84 / 85
Government of the Substitutional Portion of Employee Pension Fund
Liabilities, and Statement of Financial Accounting Standards No. 88,
Employers’ Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits, the Company
accounted for the entire process as a settlement upon completion of
the transfer to the Japanese government of the substitutional portion
of the future and past benefit obligations and the related plan asset.
During the year ended March 31, 2003, the Company contributed
¥22,246 million to a trust which was established to provide pension
benefits and to maintain sound funding status, and is legally
segregated from the Company. During the years ended March 31,
2005 and 2004, the Company withdrew cash of ¥15,000 million
($140,187 thousand) and ¥5,000 million from the trust, respectively,
since the plan assets exceeded the benefit obligations due to an
increase in fair value of plan assets and the transfer of the above
benefit obligations.
The measurement date used to determine pension benefit
obligations and plan assets was mainly March 31.
The reconciliation of beginning and ending balances of the
projected benefit obligation and plan assets, and the funded status of
the Company’s and certain subsidiaries’ plans are as follows:
Millions of yen
Thousands of
U.S. dollars
2005 2004 2005
Change in projected benefit obligation
Projected benefit obligation at beginning of year .......................................................... ¥245,034 ¥244,268 $2,290,037
Service cost .............................................................................................................. 6,040 6,051 56,449
Interest cost .............................................................................................................. 5,838 6,245 54,561
Actuarial (gains) losses .............................................................................................. (97) 2,987 (907)
Foreign currency exchange rate changes ................................................................. (491) (1,595) (4,589)
Benefits paid ............................................................................................................. (10,843) (12,522) (101,336)
Plan amendment ....................................................................................................... – (400) –
Transfer of the substitutional portion of the employee pension fund and other ....... (35,990) – (336,355)
Projected benefit obligation at end of year ...................................................................
Change in plan assets
209,491 245,034 1,957,860
Fair value of plan assets at beginning of year ............................................................... 251,310 232,943 2,348,692
Actual return on plan assets ..................................................................................... 8,653 29,795 80,869
Foreign currency exchange rate changes ................................................................. (409) (1,374) (3,822)
Employees’ contributions ......................................................................................... 257 253 2,402
Employer’s contribution ............................................................................................ 2,327 3,537 21,748
Benefits paid ............................................................................................................. (8,809) (8,844) (82,327)
Transfer of the substitutional portion of the employee pension fund and other ....... (36,521) (5,000) (341,319)
Fair value of plan assets at end of year ......................................................................... 216,808 251,310 2,026,243
Funded status ............................................................................................................... 7,317 6,276 68,383
Unrecognized prior service cost .................................................................................... (17,242) (18,028) (161,140)
Unrecognized net loss .................................................................................................. 90,139 113,583 842,421
Net amount recognized ................................................................................................. ¥ 80,214 ¥101,831 $ 749,664
Amounts recognized in the consolidated balance sheet consist of:
Prepaid benefit cost – current ................................................................................... ¥ 2,106 ¥ 1,784 $ 19,683
Prepaid benefit cost – noncurrent ............................................................................. 84,709 105,797 791,673
Accrued benefit liability ............................................................................................. (9,319) (8,786) (87,093)
Intangible assets ....................................................................................................... 1,612 1,981 15,065
Accumulated other comprehensive income, before tax ........................................... 1,106 1,055 10,336
Net amount recognized ................................................................................................. ¥ 80,214 ¥101,831 $ 749,664