Sony 2005 Annual Report Download - page 109

Download and view the complete annual report

Please find page 109 of the 2005 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 137

  • 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
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137

106 Sony Corporation
Japanese plans:
March 31 2004 2005
Equity securities . . . . . . . . . . . . . . . . . . .
39.0% 28.0%
Debt securities . . . . . . . . . . . . . . . . . . . .
14.7 34.7
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . .
42.7 33.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.6 3.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
100.0% 100.0%
Weighted-average assumptions used to determine net pension and severance costs for the years ended March 31, 2003, 2004 and
2005 were as follows:
As required under FAS No. 87, the assumptions are reviewed
in accordance with changes in circumstances.
To determine the expected long-term rate of return on pen-
sion plan assets, Sony considers the current and expected
asset allocations, as well as historical and expected long-term
rate of returns on various categories of plan assets.
Japanese plans:
Years ended March 31 2003 2004 2005
Discount rate . . . . . . . . . . . .
2.4% 1.9% 2.4%
Expected return on plan
assets . . . . . . . . . . . . . . . .
4.0 4.0 3.2
Rate of compensation
increase . . . . . . . . . . . . . . .
3.0 3.0 3.3
Foreign plans:
Years ended March 31 2003 2004 2005
Discount rate . . . . . . . . . . . .
6.6% 6.3% 5.8%
Expected return on plan
assets . . . . . . . . . . . . . . . .
8.1 8.3 7.8
Rate of compensation
increase . . . . . . . . . . . . . . .
4.5 4.1 4.0
Following FAS132(R), the weighted-average rate of
compensation increase is calculated based on the pay-related
plans only. The point-based plan discussed above is excluded
from the calculation because payments made under the plan
are not based on employee compensation.
Foreign plans:
March 31 2004 2005
Equity securities . . . . . . . . . . . . . . . . . . .
63.2% 68.3%
Debt securities . . . . . . . . . . . . . . . . . . . .
26.6 23.4
Real estate . . . . . . . . . . . . . . . . . . . . . .
3.2 4.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.0 4.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . .
100.0% 100.0%
For the pension plans of Sony Corporation and most of its
subsidiaries, Sony’s asset investment policy is set so as to
compensate the appropriate level for employee’s benefit over
the long term.
For the pension plans of Sony Corporation and most of its
subsidiaries in Japan, the target allocation as of March 31,
2005, is, as a result of our Asset Liability management, 34% of
public equity, 56% of fixed income securities and 10% of other.
When determining an appropriate asset allocation, diversification
among assets is duly considered. The actual asset allocation as
of March 31, 2005 for Sony’s principal pension plans did not
meet the aforementioned target allocation as the Sony Employ-
ees’ Pension Fund tentatively held cash to be paid to the Japa-
nese government in relation to the transfer of the substitutional
portion of the benefit obligation and the related government-
specified portion of the plan assets discussed above. Such
transfer is expected to occur in the year ending March 31, 2006.
Sony makes contributions to its contributory funded defined
benefit pension plans as required by government regulation or
as deemed appropriate by management after considering the
fair value of plan assets, expected return on plan assets and the
present value of benefit obligations. Sony expects to contribute
approximately ¥35 billion ($327 million) to the Japanese plans
and approximately ¥6 billion ($56 million) to the foreign plans for
the year ending March 31, 2006.
The future benefit payments are expected as follows:
Japanese plans Foreign plans
Yen in Dollars in Yen in Dollars in
millions millions millions millions
Year ending March 31:
2006 . . . . . . . . . . . . .
¥018,281 $ 171 ¥ 5,625 $ 53
2007 . . . . . . . . . . . . .
19,734 184 5,977 56
2008 . . . . . . . . . . . . .
22,075 206 6,308 59
2009 . . . . . . . . . . . . .
24,600 230 6,860 64
2010 . . . . . . . . . . . . .
29,475 275 7,912 74
2011–2015 . . . . . . . .
181,527 1,697 51,919 485
Weighted-average pension plan asset allocations based on the fair value of such assets as of March 31, 2004 and 2005 were
as follows:
BH6/30 Adobe PageMaker 6.0J /PPC