Independent Auditor’s Report
Statements of Financial Position Note 6: Other Postretirement Benefit Plans In addition to providing pension benefits, the Society provides certain health-care insurance benefits for qualified employees retiring after September 21, 1982, under two separate benefit plans. Administrative employees are eligible for benefits when they have reached ten years of service and 62 years of age while working for the Society. Orchestra employees are eligible for benefits when they have reached ten years of service and 60 years of age while working for the Society. Prior to fiscal-year 1996, the cost of retiree health-care benefits was recognized as expense in the fiscal year during which related costs for annual insurance premiums were incurred. The amount of the expected postretirement benefit obligation is presented in the following table: Year Ended August 31 (in thousands)
2011
Expected postretirement benefit obligation Fair value of plan assets at end of year Funded status (obligation in excess of assets)
$
Service cost— benefits earned during the period Interest cost on expected benefit obligation Net amortization and deferral Net periodic postretirement benefit cost
$
$
$
2010
(2,904) 0 (2,904)
$
79 149 34 262
$
$
(2,940) 0 (2,940) 67 162 24 253
$
Weighted-average assumptions: 5.35%
Discount rate
5.15%
For the year ended August 31, Benefit cost Benefits paid
$ $
262 106
$ $
253 102
The accrued expected postretirement benefit cost recognized in the statements of financial position for the Orchestra and Office Plans for fiscal-year 2011 was $2,364,000 and $540,000, respectively. The accrued benefit cost recognized in the statements of financial position for the Orchestra and Office Plans for fiscal-year 2010 was $2,391,000 and $549,000, respectively. For measurement purposes, a 4.25% annual rate of increase in the per capita cost of covered benefits was assumed for both fiscal-year 2011 and fiscal-year 2010. There were no employer or employee contributions to the Plans in either fiscal-year 2011 or fiscalyear 2010.
Note 7: Unrestricted Net Deficit It is the Society's intent to meet the accumulated pension obligations as they become due. Management believes the Society will have sufficient resources to meet these obligations.