[New Publication] "MUFG Total Reward Report July Issue" Provides Insight into Current HR and Pension Matters

MUFG Trust and Banking Corporation (President: Hiroshi Kubota) has announced the publication of the "MUFG Total Reward Report July Issue" on its website.

We are pleased to provide you with an excerpt from this monthly publication.

Initial Review of Equivalent Contributions to Other Systems – Practical Points Following Revisions to DC Contribution Limits

With the revision of DC contribution limits in 2024, each DB plan stipulates the equivalent contributions to other systems in its DB rules. After the first actuarial recalculation following the enforcement, the calculation method will switch from simplified to standard.

As a result of the initial review, it has been confirmed that there are increases or decreases in the equivalent contributions to other systems due to differences in calculation methods, etc., which are expected to impact corporate DC and iDeCo contribution limits and practical operations.

<Distribution of Equivalent Contributions to Other Systems (Comparison Before and After Initial Review)>

Source: Prepared by the author based on data from our DB general trustee clients.

Do Stock-Based Compensation Plans Foster Employee Engagement?

Stock-based compensation has primarily spread among executives, with adoption for general employees remaining limited.

Stock-based compensation is highly compatible with human capital management and is ideally a system that should be offered to all employees.

Stock-based compensation has the potential to generate significant economic value, offering an impact that cannot be achieved through salary and bonuses, and fosters employee engagement through changes in values and behavior.

It takes time to realize the value of stock-based compensation, and understanding deepens only through experience.

Companies are required to design systems that make employees stakeholders in value creation, leading to sustainable growth.

<Relationship Between "Company Costs" and "Employee Returns" of Stock-Based Compensation>

Source: Prepared by the author.

Disclosure Rules for Diversity Metrics in Annual Securities Reports

Amendments to the "Cabinet Office Ordinance on Disclosure of Corporate Information, etc." (hereinafter referred to as the "Disclosure Ordinance"), which stipulate the disclosure rules for annual securities reports, were promulgated from February to April 2026.

Regarding content related to the ratio of female managers, etc., there are no fundamental changes, only a relocation of the disclosure section and minor changes to legal terminology.

The disclosure rules for the ratio of female managers, etc., based on the amendments to the Disclosure Ordinance, are as follows:

- The definition and scope of companies subject to disclosure for the ratio of female managers, etc., will follow the disclosure rules of the Act on Promotion of Women's Participation and Success in the Workplace, etc.

- Supplementary explanations regarding background, factors, etc., can be provided for the actual results of the ratio of female managers, etc.

The disclosure rules for the ratio of female managers, etc., are clearly defined, making cross-company comparisons easier.

<Status of Supplementary Explanations>

Source: Prepared by the author based on the 2025 fiscal year annual securities reports of TOPIX100 companies (80 companies with March fiscal year-end).

Practical Aspects of DB Plan Changes 1 – From Plan Design to Procedures with Administrative Bodies –

When changing a Defined Benefit (DB) pension plan, it is essential to design a schedule that takes into account the practical steps from plan design and amendment procedures.

Amending the rules requires labor-management agreement depending on the plan type and the nature of the changes. For changes affecting benefits, it is necessary to proceed carefully with explanations and consent from participants.

After the policy for the plan design proposal is decided, in cooperation with the entrusted institution, we will carry out regulatory checks, draft the rules, perform actuarial calculations, and prepare internal regulations and plan management data.

Since administrative procedures with government bodies vary in terms of procedure categories, required documents, and deadlines depending on the changes, it is important to plan the preparation of application documents in cooperation with the entrusted institution.

<Example Schedule for Plan Changes (for Contracted Plans)>

Source: Prepared by the author.

Column: Thoughts on the Stock Market Rally

Read the full report here.

URL:

https://www.tr.mufg.jp/houjin/jutaku/nenkinjoho/pdf/mutb_202607.pdf?utm_source=newsletter&utm_medium=email&utm_campaign=prtimes