U-Haul 2016 Annual Report Download - page 83

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AMERCO AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (CONTINUED)
F-27
The fiscal 2016 and fiscal 2015 post retirement benefit liability included the following components:
Years Ended March 31,
2016
2015
(In thousands)
Beginning of year
$
18,554
$
16,119
Service cost for benefits earned during the period
961
827
Interest cost on accumulated post retirement benefit
752
720
Net benefit payments and expense
(541)
(450)
Actuarial loss
1,065
1,338
Accumulated postretirement benefit obligation
20,791
18,554
Current liabilities
658
513
Non-current liabilities
20,133
18,041
Total post retirement benefit liability recognized in statement of
financial position
20,791
18,554
Components included in accumulated other comprehensive
income (loss):
Unrecognized net loss
(2,847)
(1,817)
Cumulative net periodic benefit cost (in excess of employer
contribution)
$
17,944
$
16,737
The discount rate assumptions in computing the information above were as follows:
Years Ended March 31,
2016
2015
2014
(In percentages)
Accumulated postretirement benefit obligation
3.89%
3.99%
4.49%
In December 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003
became law. Net periodic post retirement benefit cost above includes the effect of the subsidy. The
discount rate represents the expected yield on a portfolio of high grade (AA to AAA rated or equivalent)
fixed income investments with cash flow streams sufficient to satisfy benefit obligations under the plan
when due. Fluctuations in the discount rate assumptions primarily reflect changes in U.S. interest rates.
The assumed health care cost trend rate used to measure the accumulated postretirement benefit
obligation as of the end of fiscal 2016 was 7.3% in the initial year and was projected to decline annually to
an ultimate rate of 4.5% in fiscal 2038. The assumed health care cost trend rate used to measure the
accumulated post retirement benefit obligation as of the end of fiscal 2015 (and used to measure the
fiscal 2016 net periodic benefit cost) was 7.3% in the initial year and was projected to decline annually to
an ultimate rate of 4.5% in fiscal 2029.
If the estimated health care cost trend rate assumptions were increased by one percent, the
accumulated post retirement benefit obligation as of fiscal year-end would increase by $219,243 and the
total of the service cost and interest cost components would increase by $26,180. A decrease in the
estimated health care cost trend rate assumption of one percent would decrease the accumulated post
retirement benefit obligation as of fiscal year-end by $314,603 and the total of the service cost and
interest cost components would decrease by $30,103.
Post employment benefits provided by us, other than upon retirement, are not material.