Report for the academic year - Libraries - Institute for Advanced Study

Notes to financial statements
E. PENSION PLANS AND OTHER POST RETIREMENT BENEFITS
Separate voluntary defined contribution retirement plans are in effect for faculty members
and eligible staff personnel, both of which provide for annuities which are funded to the
Teachers Insurance and Annuity Association and/or the College Retirement Equities
Fund. Contributions are based on the individual participants' compensation in accordance
with the formula set forth in the plan documents on a nondiscriminatory basis. Contribu-
tions for the year ended June 30, 2000 totaled approximately $1,131,750.
In addition to providing pension benefits, the Institute provides certain health care and life
insurance benefits for retired employees and faculty. Substantially all of the Institute's
employees may become eligible for these benefits if they meet minimum age and service
requirements. The Institute accrues these benefits over a period in which active employ-
ees become eligible under existing benefit plans.
The components of the periodic expense for these postretiremen! benefits for 2000 are as
follows:
Postretirement Benefit Costs:
Service Cost
- benefits attributable to service during the year $ 139,436
Interest Cost on Accumulated Postretirement Benefit Obligation 309,388
Total
$ 448,824
The actuarial and recorded liabilities for these benefits, none of which have been funded,
are as follows at June 30, 1996 (a recomputation of the accumulated postretirement bene-
fit obligation as of June 30, 2000 was not performed due to the immaterial change from the
prior measurement date):
Accumulated Postretirement Benefit Obligation
Retirees
Fully Eligible Active Plan Participants
Other Active Plan Participants
Total
$1,810,053
604,638
948,829
$3.363,520
For measurement purposes, a 13.0% Pre-62 trend rate was used for 1997 health care costs,
with the rate decreasing ratably until the year 2006, then remaining constant at 5.50%
thereafter. In addition, a 10.0% Post-62 trend rate was used for 1997, declining ratably to
5.50% in 2006 and remaining constant thereafter. The health care cost trend rate assump-
tion has a significant effect on the amounts reported. For example, a 1% increase in the
health care trend rate would increase the accumulated postretirement benefit obligation by
$672,501 at June 30, 1997 and the net periodic cost by $1 15,444 for the year. The weight-
ed average discount rate used in determining the accumulated postretirement benefit
obligation was 7.5%.
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