Pension costs for Japanese companies are contributing to a loss of profitability compared with leading U.S. rivals, a report said this week. Pension expenses at 23 major Japanese firms sliced their aggregate pretax profit by 32.1% in the financial year that ended in March, the leading business daily Nihon Keizai Shimbun said. In sharp contrast, a review of 27 firms in the Dow Jones Industrial Average shows that their pension expenses depressed pretax income by only 2.7% the report said. It attributed the wide gap to the fact that U.S. firms are generating higher investment returns in their pension programs than their Japanese rivals, in large part because of stellar gains in U.S. stocks. It also noted that Japanese companies are still shouldering the burden of huge unfunded pension liabilities, while a number of their U.S. counterparts moved to eliminate their pension fund shortfalls in the early 1990s. The Japanese companies, including Sony Corp., Honda Motor Co. Ltd. and Toshiba Corp., issue financial statements under U.S. accounting standards. Under the U.S. formula, companies are required to add to their income statements the pension costs that are left over after subtracting investment gains on pension assets.