Toyota 2011 Annual Report Download - page 92

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Employee benefit plans:
19
0822
Financial Section and
Investor Information
Business and
Performance Review
Special FeatureMessage/Vision
Management and
Corporate Information
Notes to Consolidated Financial Statements
Upon terminations of employment, employees of
the parent company and subsidiaries in Japan are
entitled, under the retirement plans of each
company, to lump-sum indemnities or pension
payments, based on current rates of pay and
lengths of service or the number of “points” mainly
determined by those. Under normal circum-
stances, the minimum payment prior to retirement
age is an amount based on voluntary retirement.
Employees receive additional benefits on involun-
tary retirement, including retirement at the age
limit.
Effective October 1, 2004, the parent company
amended its retirement plan to introduce a “point”
based retirement benefit plan. Under the new
plan, employees are entitled to lump-sum or
pension payments determined based on accumu-
lated “points” vested in each year of service.
There are three types of “points” that vest in
each year of service consisting of “service period
points” which are attributed to the length of service,
“job title points” which are attributed to the job title
of each employee, and “performance points”
which are attributed to the annual performance
evaluation of each employee. Under normal
circumstances, the minimum payment prior to
retirement age is an amount reflecting an adjust-
ment rate applied to represent voluntary retirement.
Employees receive additional benefits upon
involuntary retirement, including retirement at the
age limit.
Effective October 1, 2005, the parent company
partly amended its retirement plan and introduced
the quasi cash-balance plan under which benefits
are determined based on the variable-interest
crediting rate rather than the fixed-interest crediting
rate as was in the pre-amended plan.
The parent company and most subsidiaries in
Japan have contributory funded defined benefit
pension plans, which are pursuant to the Corporate
Defined Benefit Pension Plan Law (CDBPPL). The
contributions to the plans are funded with several
financial institutions in accordance with the
applicable laws and regulations. These pension
plan assets consist principally of common stocks,
government bonds and insurance contracts.
Most foreign subsidiaries have pension plans
or severance indemnity plans covering substan-
tially all of their employees under which the cost of
benefits are currently invested or accrued. The
benefits for these plans are based primarily on
lengths of service and current rates of pay.
Toyota uses a March 31 measurement date
for its benefit plans.
Pension and severance plans Yen in millions
U.S. dollars in millions
March 31, March 31,
2010 2011 2011
Change in benefit obligation
Benefit obligation at beginning of year ¥1,632,779 ¥1,726,747 $20,767
Service cost 75,558 82,422 991
Interest cost 50,559 52,502 631
Plan participants’ contributions 657 1,046 13
Plan amendments (3,080) (1,429) (17)
Net actuarial loss 56,843 3,830 46
Acquisition and other (2,829) (57,928) (697)
Benefits paid (83,740) (78,012) (938)
Benefit obligation at end of year 1,726,747 1,729,178 20,796
Change in plan assets
Fair value of plan assets at beginning of year 979,012 1,179,051 14,180
Actual return on plan assets 171,043 24,216 291
Acquisition and other 158 (39,374) (474)
Employer contributions 111,815 96,458 1,160
Plan participants’ contributions 763 1,046 13
Benefits paid (83,740) (78,012) (938)
Fair value of plan assets at end of year 1,179,051 1,183,385 14,232
Funded status ¥ 547,696 ¥ 545,793 $ 6,564
Information regarding Toyota’s defined benefit plans is as follows:
Amounts recognized in the consolidated balance sheet as of March 31, 2010 and 2011 are comprised
of the following:
Yen in millions
U.S. dollars in millions
March 31, March 31,
2010 2011 2011
Accrued expenses (Accrued pension and severance costs) ¥ 28,573 ¥ 24,677 $ 297
Accrued pension and severance costs 678,677 668,022 8,034
Investments and other assets - other (Prepaid pension and severance costs)
(159,554) (146,906) (1,767)
Net amount recognized ¥ 547,696 ¥ 545,793 $ 6,564
92
TOYOTA ANNUAL REPORT 2011