Panasonic Corp., the Japanese electronics giant, announced Friday it would change its retirement benefits program to a defined contribution plan from its current defined benefit plan.
In a separate news release on the day the Osaka-based company announced its results for the fiscal year ended March 31, Panasonic said the company's contributions on behalf of employees on or after July 1 will go into the DC plan.
Panasonic will report a ¥79.8 billion ($804.8 million) gain in “other income" for its fiscal quarter ending June 30, with the release noting that accounting rules require that, at the time of a decision to shift to DC from DB, “any decrease in projected benefit obligations due to a plan amendment in the past is required to be immediately recognized in the profit and loss.”
James Bell, a Tokyo-based spokesman for the firm, said Panasonic already had obtained the consent of two-thirds of the company's employees needed by law to make the change to its retirement benefits program. With that consent, the Panasonic release said the company will apply for approval of the change to the Ministry of Health, Labor and Welfare in the near future, and it will become effective upon the ministry's authorization.
Mr. Bell couldn't immediately provide details on the size of Panasonic's pension fund. It is believed to be one of the biggest corporate plans in Japan.