Securities Report 7/12

Toyota Motor Corporation
24 June 2004


                                    FY2004
                     For the year ended March 31, 2004

19    Employee benefit plans

(1)Pension and severance plans

On terminating employment, employees of the parent company and subsidiaries in
Japan are entitled, under most circumstances, to lump-sum indemnities or pension
payments as described below, based on current rates of pay and lengths of
service.  Under normal circumstances, the minimum payment prior to retirement
age is an amount based on voluntary retirement.  Employees receive additional
benefits on involuntary retirement, including retirement at the age limit.

The parent company and most subsidiaries in Japan have contributory funded
defined benefit pension plans, which are pursuant to the Japanese Welfare
Pension Insurance Law.  The contributory pension plans cover a portion of the
governmental welfare pension program ('Substitutional Portion'), under which the
contributions are made by the companies and their employees, and an corporate
portion representing the noncontributory pension plans.  The pension benefits
are determined based on years of service and the compensation amounts as
stipulated in the aforementioned regulations, and are payable, at the option of
the retiring employee, as a monthly pension payment or in a lump-sum amount. 
The contributions to the plans are funded with several financial institutions in
accordance with the applicable laws and regulations.  These pension plan assets
consist principally of investments in government obligations, equity and fixed
income securities, and insurance contracts.

The parent company and most of subsidiaries in Japan revised their defined
benefit pension plans during the years ended March 31, 2001 and 2002, which
resulted in the reductions of projected benefit obligations.  These effects of
the reductions in the projected benefit obligations have been reflected as an
unrecognized prior service cost.

During the year ended March 31, 2003, the parent company revised its lump-sum
indemnities plan and the benefits under the lump-sum indemnities plan were
reduced by approximately 12.5% in exchange for assets of an equivalent amount
being contributed to a newly established defined contribution plan.  This plan
amendment reduced accumulated benefit obligations of the lump-sum indemnities
plan by 36,807 million yen, which is equivalent to the benefits transferred to
the defined contribution plan, and the difference between this amount and the
relevant amount of projected benefit obligation resulted in 10,401 million yen
being treated as negative unrealized prior service cost.

Most foreign subsidiaries have defined benefit pension plans or severance
indemnity plans covering substantially all of their employees under which the
cost of benefits is currently invested or accrued.  The benefits for these plans
are based primarily on current rate of pay and lengths of service.





                                    FY2004

                    For the year ended March 31, 2004

(2)  Transfer to the government of the Substitutional Portion of the Employee 
Pension Fund Liabilities

The parent company had maintained the Toyota Motor Pension Fund, a employees'
pension fund (EPF) pursuant to the Japanese Welfare Pension Insurance Law
(JWPIL).  The EPF consisted of two tiers, 'Substitutional Portion', in which the
EPF, in lieu of the government's social insurance program, collected
contributions, funded them and paid benefits to the employees with respect to
the pay-related portion of the old-age pension benefits prescribed by JWPIL, and
'Corporate Portion' which was established at the discretion of each employer.

In June 2001, the Corporate Defined Benefit Pension Plan Law was enacted and
allows any EPF to terminate its operation relating to 'Subsititutional Portion'
that in the past an EPF had operated and managed in lieu of the government,
subject to approval from the Japanese Minister of Health, Labour and Welfare. 
In September 2003, in response to the enactment, Toyota Motor Pension Fund
obtained the approval from the Minister for the exemption from benefit payments
related to employee services of 'Subsititutional Portion'.  In January 2004,
Toyota Motor Pension Fund completed the transfer of the plan assets equivalent
to 'Subsititutional Portion' to the government.  In addition, during the year
ended March 31, 2004, certain subsidiaries and affiliates in Japan that had EPFs
also completed the transfer of the plan assets equivalent to 'Subsititutional
Portion' to the government in compliance with the same procedure as did the
parent company.  Certain other subsidiaries and affiliates in Japan that have
EPFs are currently in process of obtaining the approval from the Minister for
the exemption from the benefit payments related to employee service of
'Subsititutional Portion' and upon approval will transfer the plan assets
equivalent to 'Subsititutional Portion' to the government.

In accordance with the consensus on EITF Issue No. 03-2, Accounting for the
Transfer to the Japanese Government of the Substitutional Portion of Employee
Pension Fund Liabilities ('EITF 03-2'), Toyota accounted the entire separation
process, upon completion of transfer of the plan assets to the government, as a
single settlement ransaction. During the year ended March 31, 2004, Toyota
recognized a settlement loss of 323,715 million yen as part of net periodic
pension costs which is the proportionate amount of the net unrecognized loss
immediately prior to the separation related to the entire EPF, and which is
determined based on the proportion of the projected benefit obligation settled
to the total projected benefit obligation immediately prior to the separation. 
Toyota also recognized as a reduction of net periodic pension costs at gain of
109,885 million yen which resulted from the derecognition of previously accrued
salary progression.  In addition, Toyota recognized a gain of 320,867 million
yen which represented the difference between the obligation settled and the
assets transferred to the government. These gains and losses are reflected in
the consolidated statement of income for the year ended March 31, 2004 as
follows:

                                                                  Yen in millions
                                                         For the year ended March 31, 2004
                                                Costs of          Selling, gengral           Total
                                             products sold       and administrative

Settlement losses                             (288,177)              (35,538)              (323,715)

Gains on derecognition of previously            98,079                11,806                109,885
accrued salary progression

Gains on difference between the                      -               320,867                320,867
obligation settled and the assets
transferred

Total                                         (190,098)              297,135                107,037



All these gains and losses are non-cash gains and losses, and reported on a net
basis in 'Pension and severance costs, less payments' in the consolidated
statement of cash flow for the year ended March 31, 2004

Toyota uses a March 31 measurement date for the majority of its benefit plans.




                                    FY2004

                     For the year ended March 31, 2004

(3)  Information regarding Toyota's defined benefit plans
Information regarding Toyota's defined benefit plans is as follows:

                                                               Yen in millions
                                                               March 31, 2004
Change in benefit obligation:
Benefit obligation at beginning of year                           2,346,127
Service cost                                                      75,988
Interest cost                                                     48,674
Plan participants' contributions                                  2,245
Plan amendments                                                   (7,903)
Projected benefit obligation settled due to                       (752,646)
the separation of substitutional portion
Actuarial gain                                                    (11,280)
Acquisition and other                                             265,969
Benefits paid                                                     (76,123)
Benefit obligation at end of year                                 1,891,051

Change in plan assets:
Fair value of plan assets at beginning of year                    932,166
Actual return on plan assets                                      171,600
Acquisition and other                                             128,031
Employer contributions                                            213,790
Plan participants' contributions                                  2,245
Assets transferred to the government due to                       (321,894)
the separation of substitutional portion
Benefits paid                                                     (76,123)
Fair value of plan assets at end of year                          1,049,815
Funded status                                                     841,236
Unrecognized actuarial loss                                       (478,830)
Unrecognized prior service costs                                  129,965
Unrecognized net transition obligations                           (27,572)
Net amount recognized                                             464,799



In connection with the enactment of the Corporate Defined Benefit Pension Plan
Law and the transfer of the 'Substitutional Portion', the parent company
performed the pension financing calculation of Toyota Motor Pension Fund as
required by the Law and contributed 115,294 million yen to plan assets in cash,
equivalent to unfunded amount in the calculation of the Fund also as required by
the Law.

Amounts recognized in the consolidated balance sheets are comprised of the
following:

                                                              Yen in millions
                                                               March 31, 2004

Accrued pension and severance costs                               725,569
Prepaid pension and severance costs                               (164,176)
Investments and other assets                                      (18,627)
Accumulated other comprehensive income                            (77,967)
Net amount recognized                                             464,799




                                   FY2004

                    For the year ended March 31, 2004

The accumulated benefit obligation for all defined benefit pension plans was
1,688,666 million yen at March 31, 2004.

The projected benefit obligation, accumulated benefit obligation and fair value
of plan assets for which the accumulated benefit obligations exceed plan assets
are as follows:


                                                                Yen in millions
                                                                 March 31, 2004


Projected benefit obligation                                      1,051,841
Accumulated benefit obligation                                    954,158
Fair value of plan assets                                         349,217


Components of net periodic (benefit) cost are as follows:

                                                              Yen in millions
                                                            For the year ended 
                                                              March 31, 2004

Service cost                                                      75,988
Interest cost                                                     48,674
Expected return on plan assets                                    (24,991)
Amortization of prior service costs                               (15,092)
Recognized net actuarial loss                                     45,653
Settlement loss resulted from the transfer                        213,830
of the subsitutional portion
Amortization of net transition obligation                         18,963
Net periodic pension cost                                         363,025


In addition to net periodic pension costs, Toyota recorded an additional minimum
liability totaling 96,594 million yen at March 31, 2004, for plans where the
accumulated benefit obligation exceeded the fair market value of plan assets and
accrued pension and severance costs.  Minimum pension liability adjustments
included in other comprehensive income are as follows:


                                                             Yen in millions
                                                        For the year ended March
                                                                31, 2004

Minimum pension liability adjustments, included in other        273,265
comprehensive income


Weighted-average assumptions used to determine benefit obligations as of March 
31, 2004 are as follows:


Discount rate                                                       2.2%
Rate of compensation increase                                 0.5 - 9.7%






                                   FY2004

                    For the year ended March 31, 2004

Weighted-average assumptions used to determine net periodic (benefit) cost for
the year ended March 31, 2004 are as follows:



Discount rate                                                         2.1%
Expected return on plan assets                                        2.1%
Rate of compensation increase                                   0.8 - 9.7%


The expected rate of return on plan assets is determined considering several
applicable factors mainly including, compositions of plan assets held, assumed
risks of asset management, historical results of the return on plan assets,
Toyota's principal policy for plan asset management, and forecasted market
conditions.

Toyota's pension plan weighted-average asset allocations as of March 31, 2004,
by asset category are as follows:


Equity securities                                                    49.4%
Debt securities                                                      16.9%
Real estate                                                           0.3%
Other                                                                33.4%
Total                                                               100.0%



Toyota's policy and objective for plan asset management is to maximize returns
on plan assets to meet future benefit payment requirements under risks which
Toyota considers permissible.  Asset allocations under plan asset management are
determined based on Toyota's plan asset management guideline established to
achieve the optimized asset compositions in terms of long-term overall plan
asset management.  To determine individual investments, Toyota performs in
advance sound assessments on corresponding factors mainly risks, transaction
costs and liquidity of each potential investee under the examination.  To
measure results of plan asset management, Toyota establishes benchmark return
rates for each individual investment, combines these individual benchmark rates
based on the asset composition ratios within each asset category, and compares
the combined rates with the corresponding actual return rates on each asset
category.

Toyota expects to contribute 96,888 million yen to its pension plan in the year
ending March 31, 2005.



(4)Postretirement benefits other than pensions and postemployment benefits

Toyota's U.S. subsidiaries provide certain health care and life insurance
benefits to eligible retired employees.  In addition, Toyota provides benefits
to certain former or inactive employees after employment, but before retirement.
These benefits are currently unfunded and provided through various insurance
companies and health care providers.  The cost of these benefits are recognized
over the period the employee provides credited service to Toyota.  Toyota's
obligations under these arrangements are not material.



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