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Pension Plans

12 Months Ended

Mar. 31, 2025

17. Pension Plans

The Company and certain subsidiaries have contributory and

non-contributory

pension plans covering substantially all of their employees. Those contributory funded pension plans include defined benefit pension plans and defined contribution pension plans. Under the plans, employees are entitled to

lump-sum

payments at the time of termination of their employment or pension payments. Defined benefit pension plans consist of a plan of which the amounts of such payments are determined on the basis of length of service and remuneration at the time of termination and a cash balance plan.

The Company and certain subsidiaries’ funding policy is to contribute annually the amounts actuarially determined. Assets of the plans are invested primarily in debt securities and marketable equity securities.

The funded status of the defined benefit pension plans, which consists of Japanese plans and overseas plans, as of March 31, 2024 and 2025 are as follows:


	Millions of yen
	Japanese plans						Overseas plans
	2024			2025			2024			2025
Change in benefit obligation:
Benefit obligation at beginning of year	¥	109,759		¥	105,109		¥	108,416		¥	129,934
Service cost		5,542			5,078			2,999			3,268
Interest cost		1,216			1,421			3,395			4,091
Actuarial loss (income)		(3,586	)		(7,621	)		3,448			(11,712	)
Plan participant’s contributions		0			0			233			233
Benefits paid		(5,014	)		(5,032	)		(2,499	)		(2,375	)
Business combinations		0			86			0			0
Divestitures		(2,808	)		(1,937	)		0			0
Plan amendments		0			0			360			179
Settlements		0			(3,300	)		0			0
Foreign currency exchange rate change		0			0			13,582			(874	)

Benefit obligation at end of year		105,109			93,804			129,934			122,744

Change in plan assets:
Fair value of plan assets at beginning of year		136,803			143,101			122,204			153,803
Actual return on plan assets		12,103			449			15,799			(1,435	)
Employer contribution		4,195			3,855			2,262			2,446
Plan participant’s contributions		0			0			233			233
Benefits paid		(4,392	)		(4,404	)		(2,314	)		(2,182	)
Divestitures		(5,608	)		(3,272	)		0			0
Settlements		0			(2,017	)		0			0
Foreign currency exchange rate change		0			0			15,619			(1,046	)

Fair value of plan assets at end of year		143,101			137,712			153,803			151,819

The funded status of the plans	¥	37,992		¥	43,908		¥	23,869		¥	29,075

Amount recognized in the consolidated balance sheets consists of:
Prepaid benefit cost included in other assets	¥	53,641		¥	59,111		¥	25,723		¥	30,809
Accrued benefit liability included in other liabilities		(15,649	)		(15,203	)		(1,854	)		(1,734	)

Net amount recognized	¥	37,992		¥	43,908		¥	23,869		¥	29,075

Amount recognized in accumulated other comprehensive income (loss),

pre-tax,

at March 31, 2024 and 2025 consisted of:


	Millions of yen
	Japanese plans				Overseas plans
	2024		2025		2024			2025
Net prior service credit	¥	1,016	¥	666	¥	(28	)	¥	(502	)
Net actuarial gain (loss)		866		5,750		9,735			12,865
Net transition obligation		0		0		7			8

Total recognized in accumulated other comprehensive loss, pre-tax	¥	1,882	¥	6,416	¥	9,714		¥	12,371

The accumulated benefit obligations for all Japanese defined benefit pension plans were ¥95,069 million and ¥85,077 million, respectively, at March 31, 2024 and 2025. The accumulated benefit obligations for all overseas defined benefit pension plans were ¥123,600 million and ¥117,478 million, respectively, at March 31, 2024 and 2025.

The accumulated benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets at March 31, 2024 and 2025 are as follows:


	Millions of yen
	Japanese plans				Overseas plans
	2024		2025		2024		2025
Accumulated benefit obligations	¥	17,886	¥	14,525	¥	7,952	¥	2,075
Fair value of plan assets		2,854		0		6,151		389

The projected benefit obligations and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets at March 31, 2024 and 2025 are as follows:


	Millions of yen
	Japanese plans				Overseas plans
	2024		2025		2024		2025
Projected benefit obligations	¥	18,503	¥	15,203	¥	8,004	¥	3,844
Fair value of plan assets		2,854		0		6,151		2,110

Net pension cost of the plans for fiscal 2023, 2024 and 2025 consists of the following:


	Millions of yen
	2023			2024			2025
Japanese plans:
Service cost	¥	5,704		¥	5,542		¥	5,078
Interest cost		731			1,216			1,421
Expected return on plan assets		(2,739	)		(2,702	)		(2,766	)
Amortization of prior service credit		(47	)		(84	)		(72	)
Amortization of net actuarial loss		79			59			(93	)
Plan amendments		(44	)		0			0
Settlements		0			0			(1,347	)

Net periodic pension cost	¥	3,684		¥	4,031		¥	2,221

Overseas plans:
Service cost	¥	3,432		¥	2,999		¥	3,268
Interest cost		2,309			3,395			4,091
Expected return on plan assets		(4,982	)		(6,362	)		(6,996	)
Amortization of prior service credit		(329	)		(354	)		(322	)
Amortization of net actuarial loss		9			11			9
Amortization of transition obligation		1			1			1

Net periodic pension cost	¥	440		¥	(310	)	¥	51


Note:		Net periodic pension cost is charged in personnel expenses, which is included in selling, general and administrative expenses in the consolidated statements of income.

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) for fiscal 2023, 2024 and 2025 are summarized as follows:


	Millions of yen
	2023			2024			2025
Japanese plans:
Current year actuarial gain (loss)	¥	650		¥	12,990		¥	5,125
Amortization of net actuarial loss		79			59			(93	)
Prior service credit due to amendments		881			0			(278	)
Amortization of prior service credit		(47	)		(84	)		(72	)
Settlements		0			0			(148	)

Total recognized in other comprehensive income, pre-tax	¥	1,563		¥	12,965		¥	4,534

Overseas plans:
Current year actuarial gain (loss)	¥	4,810		¥	5,728		¥	3,226
Amortization of net actuarial loss		9			11			9
Prior service credit due to amendments		(36	)		(145	)		(179	)
Amortization of prior service credit		(329	)		(354	)		(322	)
Amortization of transition obligation		1			1			1
Foreign currency exchange rate change		60			641			(78	)

Total recognized in other comprehensive income (loss), pre-tax	¥	4,515		¥	5,882		¥	2,657

Significant assumptions of Japanese pension plans and overseas pension plans used to determine these amounts are as follows:


Japanese plans	2023			2024			2025
Weighted-average assumptions used to determine benefit obligations at March 31:
Discount rate		1.1	%		1.4	%		2.1	%
Rate of increase in compensation levels		4.3	%		4.3	%		3.4	%
Interest crediting rate for cash balance plans		1.5	%		1.5	%		1.5	%
Weighted-average assumptions used to determine net periodic pension cost for years ended March 31:
Discount rate		0.6	%		1.1	%		1.4	%
Rate of increase in compensation levels		4.0	%		4.3	%		4.3	%
Expected long-term rate of return on plan assets		2.0	%		2.0	%		2.0	%
Interest crediting rate for cash balance plans		1.5	%		1.5	%		1.5	%

Overseas plans	2023			2024			2025
Weighted-average assumptions used to determine benefit obligations at March 31:
Discount rate		3.3	%		3.3	%		3.8	%
Rate of increase in compensation levels		2.3	%		2.3	%		2.3	%
Interest crediting rate for cash balance plans		—			—			—
Weighted-average assumptions used to determine net periodic pension cost for years ended March 31:
Discount rate		1.7	%		3.3	%		3.3	%
Rate of increase in compensation levels		2.2	%		2.3	%		2.3	%
Expected long-term rate of return on plan assets		4.9	%		4.6	%		4.7	%
Interest crediting rate for cash balance plans		—			—			—

The Company and certain subsidiaries determine the expected long-term rate of return on plan assets annually based on the composition of the pension asset portfolios and the expected long-term rate of return on these portfolios. The expected long-term rate of return is designed to approximate the long-term rate of return actually earned on the plans’ assets over time to ensure that funds are available to meet the pension obligations that result from the services provided by employees. The Company and certain subsidiaries use a number of factors to determine the expected rate of return, including actual historical returns on the asset classes of the plans’ portfolios and independent projections of returns of the various asset classes.

The Company and certain subsidiaries’ investment policies are designed to ensure adequate plan assets are available to provide future payments of pension benefits to eligible participants. The Company and certain subsidiaries formulate a policy portfolio appropriate to produce the expected long-term rate of return on plan assets and to ensure that plan assets are allocated under this policy portfolio. The Company and certain subsidiaries periodically have an external consulting firm monitor the results of actual return and revise the policy portfolio if necessary.

The fair value of Japanese pension plan assets at March 31, 2024 and 2025, by asset category, are as follows. The three levels of input used to measure fair value are described in Note 2 “Fair Value Measurements.”


	Millions of yen
	March 31, 2024
	Total Carrying Value in Consolidated Balance Sheets		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
Japan
Pooled funds*1	¥	17,445	¥	0	¥	0	¥	0
Other than Japan
Pooled funds*2		25,645		0		0		0
Debt securities:
Japan
Pooled funds*3		26,799		0		0		0
Other than Japan
Pooled funds*4		37,243		0		0		0
Other assets:
Life insurance company general accounts*5		31,655		0		31,655		0
Others*6		4,314		0		4,314		0

	¥	143,101	¥	0	¥	35,969	¥	0

*1	These funds invest in listed shares including shares of ORIX Corporation in the amounts of ¥32 million at March 31, 2024.

*2	These funds invest in listed shares.

*3	These funds invest approximately 70% in Japanese government bonds, and approximately 30% in Japanese corporate bonds. These funds include corporate bonds of ORIX Corporation in the amounts of ¥24 million at March 31, 2024.

*4	These funds invest approximately 90% in foreign government bonds and approximately 10% in foreign corporate bonds.

*5	Life insurance company general accounts are accounts with guaranteed capital and minimum interest rate, in which life insurance companies manage funds on several contracts.

*6	Others include derivative instruments held for hedging change in the fair value of equity securities, and short-term instruments.

At March 31, 2024, our policy for the portfolio of plans consists of three major components: approximately 30% is invested in equity securities, approximately 40% is invested in debt securities and approximately 30% is invested in other assets, primarily consisting of investments in life insurance company general accounts.

Level 2 assets are comprised principally of investments in life insurance company general accounts. Investments in life insurance company general accounts are valued at conversion value. Pooled funds are valued at the net asset value per share at the measurement date and they have not been classified in the fair value hierarchy.


	Millions of yen
	March 31, 2025
	Total Carrying Value in Consolidated Balance Sheets		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
Japan
Pooled funds*1	¥	15,268	¥	0	¥	0	¥	0
Other than Japan
Pooled funds*2		19,447		0		0		0
Debt securities:
Japan
Pooled funds*3		28,787		0		0		0
Other than Japan
Pooled funds*4		32,738		0		0		0
Other assets:
Life insurance company general accounts*5		29,136		0		29,136		0
Others*6		12,336		0		12,336		0

	¥	137,712	¥	0	¥	41,472	¥	0

*1	These funds invest in listed shares including shares of ORIX Corporation in the amounts of ¥30 million at March 31, 2025.

*2	These funds invest in listed shares.

*3	These funds invest approximately 70% in Japanese government bonds, and approximately 30% in Japanese corporate bonds. These funds include corporate bonds of ORIX Corporation in the amounts of ¥7 million at March 31, 2025.

*4	These funds invest approximately 100% in foreign government bonds.

*5	Life insurance company general accounts are accounts with guaranteed capital and minimum interest rate, in which life insurance companies manage funds on several contracts.

*6	Others include derivative instruments held for hedging change in the fair value of equity securities, and short-term instruments.

At March 31, 2025, our policy for the portfolio of plans consists of three major components: approximately 30% is invested in equity securities, approximately 40% is invested in debt securities and approximately 30% is invested in other assets, primarily consisting of investments in life insurance company general accounts.

The fair value of overseas pension plan assets at March 31, 2024 and 2025, by asset category, are as follows. The three levels of input used to measure fair value are described in Note 2 “Fair Value Measurements.”


	Millions of yen
	March 31, 2024
	Total Carrying Value in Consolidated Balance Sheets		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
Other than Japan
Shares	¥	61,210	¥	61,210	¥	0	¥	0
Pooled funds*1		1,100		0		0		0
Debt securities:
Other than Japan
Government bonds		79,773		79,773		0		0
Municipal bonds		4,506		0		4,506		0
Other assets:
Life insurance company general accounts*2		471		0		471		0
Others*3		6,743		0		6,743		0

	¥	153,803	¥	140,983	¥	11,720	¥	0

*1	These funds invest in listed shares.

*2	Life insurance company general accounts are accounts with guaranteed capital and minimum interest rate, in which life insurance companies manage funds on several contracts.

*3	Others include derivative instruments held for hedging change in the fair value of equity securities, and short-term instruments.

At March 31, 2024, our policy for the portfolio of plans consists of three major components: approximately 40% is invested in equity securities, approximately 50% is invested in debt securities and approximately 10% is invested in other assets, primarily consisting of investments in life insurance company general accounts.

Each level into which assets are categorized is based on inputs used to measure the fair value of the assets. Level 1 assets are comprised principally of equity securities and debt securities, which are valued using unadjusted quoted market prices in active markets with sufficient volume and frequency of transactions. Level 2 assets are comprised principally of debt securities and investments in life insurance company general accounts. Investments in life insurance company general accounts are valued at conversion value. Pooled funds are valued at the net asset value per share at the measurement date and they have not been classified in the fair value hierarchy.


	Millions of yen
	March 31, 2025
	Total Carrying Value in Consolidated Balance Sheets		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities:
Other than Japan
Shares	¥	54,119	¥	54,119	¥	0	¥	0
Pooled funds*1		722		0		0		0
Debt securities:
Other than Japan
Government bonds		85,685		85,685		0		0
Municipal bonds		4,094		0		4,094		0
Other assets:
Life insurance company general accounts*2		455		0		455		0
Others*3		6,744		0		6,744		0

	¥	151,819	¥	139,804	¥	11,293	¥	0

*1	These funds invest in listed shares.

*2	Life insurance company general accounts are accounts with guaranteed capital and minimum interest rate, in which life insurance companies manage funds on several contracts.

*3	Others include derivative instruments held for hedging change in the fair value of equity securities, and short-term instruments.

At March 31, 2025, our policy for the portfolio of plans consists of

two

major components: approximately 40% is invested in equity securities and approximately 60% is invested in debt securities.

The Company and certain subsidiaries expect to contribute ¥3,843 million to its Japanese pension plans and ¥2,305 million to its overseas pension plans during the year ending March 31, 2026.

At March 31, 2025, the benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five years thereafter are as follows:


	Millions of yen
Years ending March 31,	Japanese plans		Overseas plans
2026	¥	5,919	¥	3,106
2027		5,150		3,208
2028		5,145		3,236
2029		5,852		3,260
2030		5,847		3,441
2031-2035		31,513		20,193

Total	¥	59,426	¥	36,444

The cost recognized for Japanese defined contribution pension plans of the Company and certain of its subsidiaries for fiscal 2023, 2024 and 2025 were ¥2,100 million, ¥2,146 million and ¥2,118 million, respectively. The cost recognized for overseas defined contribution pension plans of the Company and certain of its subsidiaries for fiscal 2023, 2024 and 2025 were ¥3,498 million, ¥4,219 million and ¥5,046 million, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
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-Name Accounting Standards Codification
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480266/715-60-50-3

+ Details