U-Haul 2007 Annual Report Download - page 98

AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Insurance Plans
Oxford insured various group life and group disability insurance plans covering employees of the Company. Premiums
earned by Oxford on these policies were $3.3 million, $3.5 million and $3.3 million for the years ended December 31,
2006, 2005, and 2004, respectively. The group life premiums were paid by the Company and those amounts were
eliminated from the Company’ s financial statements in consolidation. Oxford discontinued its participation in this program
effective October 2006. The employee group life coverage is now provided by an unrelated third party insurer. Oxford was
the insurance carrier for the employee disability plan through April 30, 2007. This program is now provided to employees
by an unrelated third party insurer. The group disability premiums are paid by the covered employees.
Post Retirement and Post Employment Benefits
The Company provides medical and life insurance benefits to its eligible employees and their dependents upon
retirement from the Company. The retirees must have attained age sixty-five and earned twenty years of full-time service
upon retirement for coverage under the medical plan. The medical benefits are capped at a $20,000 lifetime maximum per
covered person. The benefits are coordinated with Medicare and any other medical policies in force. Retirees who have
attained age sixty-five and earned at least ten years of full-time service upon retirement from the Company are entitled to
group term life insurance benefits. The life insurance benefit is $2,000 plus $100 for each year of employment over ten
years. The plan is not funded and claims are paid as they are incurred. In prior years the Company elected to use a
December 31 measurement date for its post retirement benefit disclosures as of March 31.
Effective March 31, 2007, the Company adopted SFAS 158, which requires that the Consolidated Balance Sheet
reflect the unfunded status of the Company’ s postretirement benefit plan and measure these benefits as of the end of the
fiscal year. Previously, the Company had measured these benefits on a three month lag, as allowed by SFAS 106. SFAS
158 requires the valuation be performed as of the balance sheet date. The provisions of SFAS 158 do not permit
retrospective application. The portion of the net periodic cost associated with the elimination of the timing gap was $0.1
million, net of taxes, and recorded as an adjustment to retained earnings in fiscal 2007. Additionally, SFAS 158 requires
the unrecognized net gain or loss now be reclassified to accumulated other comprehensive income. As of March 31, 2007
this resulted in a reduction of other comprehensive income in the amount of $0.2 million, net of tax.
The components of net periodic post retirement benefit cost were as follows:
2007 2006 2005
Service cost for benefits earned during the period $ 572 $ 373 $ 316
Interest cost on accumulated postretirement benefit 464 306 313
Other components (63) (299) (317)
Net periodic postretirement benefit cos
t
$973 $ 380 $ 312
Year Ended March 31,
(In thousands)
The fiscal 2007 and fiscal 2006 post retirement benefit liability included the following components:
2007 2006
Beginning of year $ 8,183 $ 5,376
Service cost for benefits earned during the period 715 373
Interest cost on accumulated post retirement benefit 580 306
Net benefit payments and expense (429) (417)
Actuarial (gain) loss 1,735 2,545
Accumulated postretirement benefit obligation 10,784 8,183
Unrecognized net gain - 1,563
Total post retirement benefit liability recognized in statement of financial position 10,784 9,746
Components included in accumulated other comprehensive income:
Unrecognized net gain (loss) (251) -
Cumulative net periodic benefit cost (in excess of employer contribution) $ 10,533 $ 9,746
Year Ended March 31,
(In thousands)
F-33