Amtrak 2015 Annual Report Download - page 42

National Railroad Passenger Corporation and Subsidiaries (Amtrak)
Notes to Consolidated Financial Statements (continued)
11. Environmental Matters (continued)
40
as receivables. The ultimate liability for environmental remediation is difficult to determine with certainty
due to, among other factors, the number of potentially responsible parties, site-specific cost sharing
arrangements, the degree and types of contamination, potentially unidentified contamination, developing
remediation technology, and evolving statutory and regulatory standards related to environmental matters.
Subsequent to September 30, 2015, the Company discovered polychlorinated biphenyl (PCB) contaminants
in one of the railway stations it owns in areas not previously identified as having PCBs. Cleanup work has
commenced and as of September 30, 2015, the Company has accrued $6.9 million, its best estimate of the
costs to complete the first phase of the cleanup. It is probable that there will be a second phase to the cleanup,
but those costs cannot yet be estimated and accordingly have not been accrued. The Company will accrue
such costs at the time they become estimable.
Amtrak’s management and counsel believe that additional future remedial actions for known environmental
matters will not have a material adverse effect on the Company’s results of operations or financial condition.
12. Postretirement Employee Benefits
Amtrak has a qualified non-contributory defined benefit retirement plan (the Retirement Income Plan) whose
assets are held in trust covering certain nonunion employees and certain union employees who at one time
held nonunion positions.
Amtrak provides medical benefits to its qualifying retirees and life insurance to some retirees in limited
circumstances under its postretirement benefits program. Railroad union employees’ life insurance benefits
are covered by a separate policy purchased by Amtrak. Under Amtrak’s postretirement benefits program,
substantially all salaried employees hired prior to April 1, 2013 may become eligible for medical benefits if
they meet the service requirement and reach age 55 while they are working for Amtrak. Company-provided
medical benefits are reduced when covered individuals become eligible for Medicare benefits or reach age
65, whichever comes first. Medical benefits are subject to co-payment provisions and other limitations.
On March 18, 2015, Amtrak’s Board of Directors approved an amendment to freeze benefits under the
Retirement Income Plan, effective June 30, 2015. This change resulted in no additional benefits being earned
by participants based on service or pay after June 30, 2015. These plan changes resulted in a curtailment and
required a remeasurement as of March 31, 2015. The curtailment and the remeasurement resulted in a net
decrease in the projected benefit obligation as of the remeasurement date of $64.5 million which was offset
against existing unrecognized losses.
Also on March 18, 2015, Amtrak’s Board of Directors approved an amendment to modify its postretirement
medical benefits program for nonunion employees. Effective June 30, 2015:
• Excluding certain Grandfathered Retirees and Executives, retirees age 65 and older have to obtain
medical coverage through a third-party medical exchange. Amtrak funds a tax-advantaged health
reimbursement account to assist retirees with medical expenses.
• Eligibility requirements for future retirees were changed to age 55 with ten years of service, or age
60 with five years of service for employees who were age 50 or over as of June 30, 2015.