Sony 1998 Annual Report Download - page 66

Download and view the complete annual report

Please find page 66 of the 1998 Sony 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 80

  • 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

[64] Sony Corporation Annual Report 1998
The parent company and most subsidiaries in Japan have contributory funded defined benefit pension plans,
which are pursuant to the Japanese Welfare Pension Insurance Law. The contributory pension plans cover a por-
tion of the governmental welfare pension program, under which the contributions are made by the companies and
their employees, and an additional portion representing the substituted noncontributory pension plans. Under the
contributory pension plans, the defined benefits representing the noncontributory portion of the plans, in general,
cover 60% of the indemnities under the existing regulations to employees. The remaining indemnities are covered
by severance payments by the companies. The pension benefits are determined based on years of service and the
compensation amounts, as stipulated in the aforementioned regulations, are payable at the option of the retiring
employee in a lump-sum amount or on a monthly pension. Contributions to the plans are funded through several
financial institutions in accordance with the applicable laws and regulations.
Most foreign subsidiaries have defined benefit pension plans or severance indemnity plans which substantially
cover all of their employees, under which the cost of benefits is currently funded or accrued. Benefits awarded under
these plans are based primarily on current rate of pay and lengths of service.
Net pension and severance costs and the related pension plans’ funded status including the employees’ contribu-
tory portion and rate assumptions are shown below:
Japanese plans:
Yen in millions Dollars in thousands
Year ended March 31 Year ended
1996 1997 1998 March 31, 1998
Net pension and severance cost (credit):
Service cost — benefits earned during the year . . . . . . . ¥29,276 ¥32,772 ¥39,436 $298,758
Interest cost on projected benefit obligation. . . . . . . . . 11,090 11,959 13,303 100,780
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . (9,545) (14,373) (7,843) (59,417)
Net amortization and deferral . . . . . . . . . . . . . . . . . . . 7,245 14,053 7,037 53,311
Actuarial net pension and severance cost for the year . . . . 38,066 44,411 51,933 393,432
Employee contributions . . . . . . . . . . . . . . . . . . . . . . . . . (4,098) (4,073) (4,118) (31,197)
Net pension and severance cost for the year . . . . . . . . . . . ¥33,968 ¥40,338 ¥47,815 $362,235
Foreign plans:
Yen in millions Dollars in thousands
Year ended March 31 Year ended
1996 1997 1998 March 31, 1998
Net pension and severance cost (credit):
Service cost — benefits earned during the year . . . . . . . ¥10,790 ¥15,988 ¥15,625 $118,371
Interest cost on projected benefit obligation. . . . . . . . . 3,197 4,108 4,911 37,204
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . (4,122) (3,897) (6,149) (46,583)
Net amortization and deferral . . . . . . . . . . . . . . . . . . . 1,860 870 2,365 17,917
Net pension and severance cost for the year . . . . . . . . . . . ¥11,725 ¥17,069 ¥16,752 $126,909