Notes to Consolidated Financial Statements10

HOKURIKU ELECTRIC POWER COMPANY AND CONSOLIDATED SUBSIDIARIES
March 31, 2016

13. Employees' Retirement Benefits

 The Company and its consolidated subsidiaries have the defined benefit plans, including lump-sum retirement benefit plan, defined benefit corporate pension plan, welfare pension fund plan and company sponsored pension plan´╝îand they also provides employees with the options of either the defined contribution pension plan or the prepayment plan other than the defined benefit plan. The Company also pays employees lump-sum retirement benefit extra accordingly.
 Some subsidiaries adopt a short-cut method in computing projected benefit obligation and retirement benefit expense.

(1) Defined benefit plan

 The changes in the retirement benefit obligation during the year ended March 31, 2016 and 2015 were as follows:

Millions of yen  /  Millions of yen / Thousands of U.S. dollars

201620152016
Retirement benefit obligation at April 1¥96,524¥96,320$856,549
Cumulative effects of changes in accounting policies-(4,388)-
Restated balance96,52491,931856,549
Service cost4,2884,08038,055
Interest cost1,3721,31612,176
Actuarial loss7,587(122)67,327
Retirement benefit paid(4,404)(4,265)(39,081)
Increase of consolidated subsidiaries-3,774-
Other-(190)-
Retirement benefit obligation at March 31¥105,368¥96,524$935,028

 The changes in plan assets during the year ended March 31, 2016 and 2015 were as follows:

Millions of yen  /  Millions of yen / Thousands of U.S. dollars

201620152016
Plan assets at April 1¥89,643¥76,826$795,483
Expected return on plan assets1,7921,53615,909
Actuarial loss(1,157)10,358(10,268)
Contributions by the Company2,0412,42118,116
Retirement benefits paid(1,705)(1,499)(15,132)
Plan assets at March 31¥90,614¥89,643$804,108

 The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31, 2016 and 2015 for the Company's and the consolidated subsidiaries' defined benefit plans:

Millions of yen  /  Millions of yen / Thousands of U.S. dollars

201620152016
Funded retirement benefit obligation¥74,057¥66,009$657,180
Plan assets at fair value(90,614)(89,643)(804,108)
¥(16,557)¥(23,633)$(146,927)
Unfunded retirement benefit obligation¥31,310¥30,515$277,847
Net liability for retirement benefits in the balance sheet¥14,753¥6,881$130,920
Liability for retirement benefits¥31,310¥30,515$277,847
Asset for retirement benefits¥(16,557)¥(23,633)$(146,927)
Net liability for retirement benefits in the balance sheet¥14,753¥6,881$130,920

 The components of retirement benefit expense for the year ended March 31, 2016 and 2015 were as follows:

Millions of yen  /  Millions of yen / Thousands of U.S. dollars

201620152016
Service cost¥4,288¥4,080$38,055
Interest cost1,3721,31612,176
Expected return on plan assets(1,792)(1,536)(15,909)
Amortization of actuarial loss(5,264)(99)(46,720)
Amortization of prior service cost-(1,310)-
Retirement benefit expense¥(1,397)¥2,450$(12,397)

 In addition, additional retirement benefit expense of ¥1,888 million ($16,753 thousand) and ¥2,262 million was accounted for as an operating expense for the year ended March 31, 2016 and 2015.


 Prior service cost and actuarial loss included in accumulated other comprehensive income (before tax effect) as of March 31, 2016 and 2015 were as follows:

Millions of yen  /  Millions of yen  /  Thousands of U.S. dollars

201620152016
Prior service cost¥ -¥(1,310)$ -
Actuarial gain or loss(14,009)10,380(124,316)
Total¥(14,009)¥9,070$(124,316)

 Unrecognized prior service cost and unrecognized actuarial loss included in accumulated other comprehensive income (before tax effect) as of March 31, 2016 and 2015 were as follows:

Millions of yen  /  Millions of yen / Thousands of U.S. dollars

201620152016
Unrecognized actuarial gain or loss¥3,382¥(10,626)$30,014

 Fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2016 and 2015 were as follows:

20162015
Stock36%44%
Bonds24%23%
General account of life insurance39%31%
Others1%2%
Total100%100%

 The expected return on assets has been estimated based on the anticipated allocation to each asset class and the expected long-term returns on assets held in each category.


The assumptions used in accounting for the above plans were as follows:

20162015
Discount ratesMainly 1.0%Mainly 1.5%
Expected rates of return on plan assets2.0%2.0%

(2) Defined contribution pension plan and prepaid retirement benefit plan

 Contributions related to defined contribution pension plan were accounted ¥709 million ($6,294 thousand) and ¥754 million , the payments related to prepaid retirement benefit plan were accounted ¥53 million ($470 thousand) and ¥55 miliion for the year ended March 31, 2016 and 2015.

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