Navy Federal Credit Union 2013 Annual Report Download - page 61
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Navy Federal Credit Union • 2013 Financial Section
41
2013 ANNUAL REPORT
Retiree Medical Plan (the Plan)
Navy Federal provides post-retirement benefits to certain retired employees in the form of a
contributory group medical plan and supplemental retirement income to oset the cost of medical
insurance premiums or out-of-pocket medical expenses. Under the provisions of the Plan, the retirees
are responsible for the payment of most of the medical insurance premiums. The supplemental
retirement income benefit is an annual benefit of $75 or $100 (depending on the retiree’s age on
September 1, 2008), multiplied by the number of years of continuous service the retiree provided
Navy Federal. There are no assets set aside to pre-fund the liability associated with the Plan.
Medical cost trends have a negligible impact on the determination of the retiree medical benefit
obligation. Employees hired on or after January 1, 2009 will not receive the medical supplement but
will be eligible for medical coverage at age 55 with 10 years of service by paying full cost.
The following table sets forth the over/(under) funded status of the pension and retiree medical
benefit plans:
Retiree Medical
(dollars in thousands)
Fair value of plan assets $ 1,141,342 $ 973,676 $ — $ —
Benefit obligations 856,149 936,457 44,559 50,090
$ $ $ $
The weighted-average assumptions used to determine the projected benefit obligation for the pension
and retiree medical benefit plans were as follows:
Retiree Medical
Discount rate 5.05% 4.10% 5.05% 4.10%
Rate of compensation increase 4.25% 4.25% N/A N /A
The following table sets forth the net periodic benefit cost, contributions received, and benefits paid for
the benefit plans:
Retiree Medical
(dollars in thousands)
Benefit cost $ 24,889 $ 30,268 $ 5,142 $ 4,949
Employer contribution 25,000 55,000 1,200 1,680
Plan participants’ contributions — — 1,401 720
Benefits paid 29,884 30,035 2,602 2,400