Page 36 - RFCUNY Annual Report 2016

Research Foundation of The City University of New York and Related Entities

Notes to Consolidated Financial Statements
Years ended June 30, 2016 and 2015

2016 2015
Components of net periodic cost:
Service cost $ 4,422,423 4,116,500
Interest cost 5,491,728 4,726,235
Expected return on plan assets (6,384,377) (5,745,343)
Amortization of transition obligation 757,413 757,413
Recognized prior service credit 129,543 (253,479)
Net periodic benefit cost $ 4,416,730 3,601,326
Weighted average assumptions for the year ended June 30:
Discount rate used to determine benefit obligation 3.50% 4.35%
Discount rate used to determine net periodic benefit cost 4.35 4.20
Expected return on plan assets 5.00 5.00

For measurement purposes, increases in healthcare costs (7% in 2016) were assumed to decrease by
1% for two years and then by .5% for three years until an ultimate rate of 3% in 2022 and after.
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 2016:

1% Increase 1% Decrease
Effect on total of service and interest cost components $ 1,853,640 (1,636,980)
Effect on postretirement benefit obligation 19,783,645 (18,834,745)

For the years ended June 30, 2016 and 2015, the Foundation made contributions to the postretire-
ment plan of $11,097,000 and $10,250,263, respectively. In addition, for the years ended June 30, 2016
and 2015, the Foundation paid claims and expenses of $4,150,163 and $4,011,555, respectively. The
Foundation expects to contribute or pay claims and expenses aggregating to approximately $4,000,000
in 2017.
The benefits expected to be paid in each fiscal year from 2017 through 2021 and the five subsequent
years are:

Year(s):
2017 $ 4,488,263
2018 5,001,102
2019 5,459,771
2020 5,902,412
2021 6,360,282
2022-2026 36,730,223

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