Fluctuations in Discount Rates and Pension Investment Returns
First written in FY2016. 4 of 6 entries say "Materialised", first in FY2017-Q1. Latest entry: FY2018.
Nankai moved to the "Worse" side of this theme in 2016, 5 years before the typical company in this theme (2021).
0 other companies' latest entry also says "Softened".
- FY2018SoftenedAnnual report
「If the assumptions used to calculate the obligations change, or if investment returns deteriorate further, this may adversely affect the Group's performance and financial condition.」
The explicit reference to a "decline in the discount rate" was removed from the risk disclosure, which was reorganized around changes in the assumptions used to calculate the obligations and deteriorating investment returns. - FY2017MaterialisedAnnual report
「Under these economic conditions, the Group continued implementing various measures based on the second year of its medium-term management plan, the "Shinten 133 Plan." As a result, during the fiscal year under review, passenger transportation related to airports remained strong, while retirement benefit expenses increased due to the decline in the discount rate used to calculate retirement benefit obligations. Operating revenue increased by ¥2,624 million, or 1.2%, from the previous fiscal year to ¥221,690 million, while operating income decreased by ¥477 million, or 1.5%, to ¥31,840 million,」
The increase in retirement benefit expenses associated with the lower discount rate materialized as a factor reducing full-year operating income. - FY2017-Q3MaterialisedAnnual report
「Due in part to an increase in retirement benefit expenses resulting from the decline in the discount rate used to calculate retirement benefit obligations, operating income decreased by ¥921 million, or 3.4%, from the first nine months of the previous fiscal year to ¥26,437 million, ordinary income decreased by ¥497 million, or 2.1%, to ¥23,095 million, and net income attributable to owners of the parent decreased by ¥1,049 million, or 6.6%, to ¥14,792 million.」
The increase in retirement benefit expenses associated with the lower discount rate continued to materialize as declines in each profit measure for the first nine months. - FY2017-Q2MaterialisedAnnual report
「Due in part to an increase in retirement benefit expenses resulting from the decline in the discount rate used to calculate retirement benefit obligations, operating income decreased by ¥207 million, or 1.2%, from the first six months of the previous fiscal year to ¥17,693 million, ordinary income decreased by ¥79 million, or 0.5%, to ¥15,232 million, and net income attributable to owners of the parent decreased by ¥917 million, or 8.7%, to ¥9,614 million.」
The increase in retirement benefit expenses associated with the lower discount rate continued to materialize as declines in quarterly operating income, ordinary income and net income. - FY2017-Q1MaterialisedAnnual report
「Due in part to an increase in retirement benefit expenses resulting from the decline in the discount rate used to calculate retirement benefit obligations, operating income decreased by ¥149 million, or 1.7%, from the previous first quarter of the previous fiscal year to ¥8,848 million, ordinary income decreased by ¥172 million, or 2.2%, to ¥7,718 million, and net income attributable to owners of the parent decreased by ¥874 million, or 16.6%, to ¥4,392 million.」
The decline in the discount rate actually led to lower profit through an increase in retirement benefit expenses. - FY2016First statedAnnual report
「Actuarial differences are expensed from the following consolidated fiscal year using the straight-line method over a certain number of years, within the employees' average remaining service period at the time the differences arise, ranging from 3 to 11 years. If the assumptions used to calculate the obligations change, or if discount rates decline further or investment returns deteriorate, this may adversely affect the Group's performance and financial condition.」
The disclosure described the amortization period for actuarial differences and the risks of lower discount rates and deteriorating investment returns.