Toshiba Corp., the Tokyo-based electronics giant, announced Monday it will add a defined contribution plan to a company retirement benefits lineup that's been dominated by a defined benefit plan and a lump-sum payout provision.
A news release on the company's website said starting Oct. 1 the defined contribution plan will be offered to a combined 95,000 employees of the company and 88 of its affiliates, with plans to gradually extend the plan to more affiliates later.
Nobuji Kawahara, president of Toshiba Pension Fund, didn't respond to e-mailed questions. A Toshiba spokesman couldn't be reached for further comment.
The news release said half of the future reserves slated for an individual employee's lump-sum payout will be redirected to the defined contribution plan.
The DC plan will facilitate workforce mobility, while improving the company's financial strength by controlling the increase in retirement obligations, according to the release.
In the company's annual report for the fiscal year ended March 31, 2014, Toshiba listed accrued pension and severance costs of ¥611 billion ($5.9 billion).