Page 39 - RFCUNY-2010AnnualReport

For measurement purposes, healthcare costs, other than Medicare Part B, were assumed to decrease by 0.5% in 2011, then decrease by 1% in years 2012 through 2014 to an ultimate rate of 5%. Medicare Part B costs were assumed to increase by 4% annually. Assumed healthcare trend rates have a significant effect on the amounts reported for postretirement plans. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects for 2010:

1% Increase 1% Decrease Effect on total of service and interest cost

components $ 1,600,853 (1,417,502) Effect on post retirement ben-

efit obligation 15,247,198 (13,620,102) For the years ended June 30, 2010 and 2009, the Organization made contributions to the postretirement plan of $4,846,610 and $6,000,000, respectively. In addition, for the years ended June 30, 2010 and 2009, the Organization paid claims and expenses of $2,827,348 and $2,362,373, respectively. The Organization expects to contribute or pay claims and expenses aggregating to approximately $8,800,000 in 2011.

The benefits expected to be paid in each fiscal year from 2011 through 2015 and the five subsequent years are: Year:

2011 $ 3,129,919 2012 3,581,180 2013 4,011,979 2014 4,439,923 2015 4,934,925 2016–2020 29,841,503 At June 30, 2010 and 2009, the items not yet rec-ognized as a component of net periodic benefit cost are as follows:

2010 2009 Transition obligation $ 5,907,811 6,665,224 Prior service credit (3,369,643) (4,148,684) Net loss 32,225,588 30,694,407 Total unamortized

items $34,763,756 33,210,947

The transition obligation, prior service credit, and actuarial loss that are expected to be amortized into net periodic cost in fiscal year 2011 are as follows: Transition obligation $ 757,413 Prior service credit 799,041 Actuarial loss 2,459,612

Investment allocation and strategy decisions are generally made by management and the Foundation’s board of directors. The postretirement plan’s weighted average asset allocations at June 30, 2010 and 2009 by asset category are as follows:

Target Allocation

2010 2009 2010 2009 Domestic equity securities 14%–68% 30%–66% 74.0% 60.0% Debt securities 30%–60% 30%–60% 21.0 23.0 Commodities 0%–10% 0%–5% — — International equity securities 10%–20% 10%–20% 1.0 — Cash equivalents 4.0 17.0

The Foundation’s plan assets are measured at fair value. Investments in equity securities and mutual funds with readily determinable fair values and all investments in debt securities are reported at fair

value based upon quoted market prices. Investments in nonpublic equity funds are reflected at fair value based upon the net asset value, as a practical expedi-ent, of the funds provided by the investment managers.