Sony 2015 Annual Report Download - page 189

SONY CORPORATION AND CONSOLIDATED SUBSIDIARIES
15. Pension and severance plans
(1) Defined benefit and severance plans
Upon terminating employment, employees of Sony Corporation and its subsidiaries in Japan are entitled,
under most circumstances, to lump-sum indemnities or pension payments as described below. Sony Corporation
and certain of its subsidiaries’ pension plans utilize a point-based plan under which a point is added every year
reflecting the individual employee’s performance over that year. Under the point-based plan, the amount of
payment is determined based on the sum of cumulative points from past services and interest points earned on the
cumulative points regardless of whether or not the employee is voluntarily retiring.
Under the plans, in general, the defined benefits cover 65% of the indemnities under existing regulations to
employees. The remaining indemnities are covered by severance payments by the companies. The pension
benefits are payable at the option of the retiring employee either in a lump-sum amount or monthly pension
payments. Contributions to the plans are funded through several financial institutions in accordance with the
applicable laws and regulations.
From April 1, 2012, Sony Corporation and substantially all of its subsidiaries in Japan have modified
existing defined benefit pension plans such that life annuities will no longer accrue additional service benefits,
with those participants instead accruing fixed-term annuities. The defined benefit pension plans were closed to
new participants and a defined contribution plan was also introduced.
In addition, several of Sony’s foreign subsidiaries have defined benefit pension plans or severance
indemnity plans, which cover substantially all of their employees. Under such plans, the related cost of benefits is
currently funded or accrued. Benefits awarded under these plans are based primarily on the current rate of pay
and length of service.
The components of net periodic benefit costs for the fiscal years ended March 31, 2014, 2015 and 2016
were as follows:
Japanese plans:
Yen in millions
Fiscal year ended March 31
2014 2015 2016
Service cost 24,827 24,350 24,670
Interest cost 12,152 11,583 8,689
Expected return on plan assets (17,822) (19,252) (20,853)
Recognized actuarial loss 11,480 9,867 8,588
Amortization of prior service costs (10,176) (9,614) (9,489)
Net periodic benefit costs 20,461 16,934 11,605
Foreign plans:
Yen in millions
Fiscal year ended March 31
2014 2015 2016
Service cost 3,032 3,188 3,504
Interest cost 12,068 13,040 12,096
Expected return on plan assets (11,480) (12,993) (14,117)
Amortization of net transition asset 12 10 10
Recognized actuarial loss 3,693 2,991 4,236
Amortization of prior service costs (643) (639) (478)
Losses on curtailments and settlements 1,074 31 354
Net periodic benefit costs 7,756 5,628 5,605
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