RETIREMENT PLAN

12 Months Ended

Aug. 31, 2011

NOTE 7 - RETIREMENT PLAN

Defined Contribution Plans

PriceSmart offers a defined contribution retirement and 401(k) plan to its U.S. employees, which allows employees to enroll in the plan after 90 days of employment. Enrollment in these plans begins on the first of the month following the employee's eligibility. Effective January 1, 2011, the Company makes nondiscretionary contributions to the 401(k) plan with a 4% "Company Contribution" based on the employee's salary regardless of the employee's own contributions to the plan up to the IRS maximum allowed. Prior to January 1, 2011, the Company made nondiscretionary contributions to the 401(k) plan equal to 100% of the participant's contribution up to an annual maximum of 4% of base compensation up to the IRS maximum allowed. The annual increase to expense from this change was approximately $334,000. Employer contributions to the 401(k) plan for the Company's U.S. employees were $900,000, $566,000 and $486,000 during fiscal years 2011, 2010 and 2009, respectively. The Company has defined contribution plans for its employees in Panama, Costa Rica, Trinidad, and Jamaica and contributes a percentage of the respective employees' salary. Amounts contributed under these plans were $497,000, $409,000 and $413,000 during fiscal years 2011, 2010 and 2009, respectively.

Defined Benefit Plan

On January 21, 2011, PS Operations Ltd. (" a subsidiary of the Company") in Trinidad signed a collective labor agreement with the Oil Workers Trade Union on behalf of the hourly rated weekly paid and hourly rated bi-monthly paid employees who are members of the Union. Management has determined that the agreement contains a Defined Benefit Plan within the contract for retirement pay. The Company will not be funding the obligation. As a result, the entire amount of the benefit obligation is presented as a long-term liability on the consolidated balance sheets. The Company will make payments on any obligation that becomes due from available cash. The following table summarizes the amount of the funding obligation and the line items at which it is recorded on the consolidated balance sheets and consolidated statements of income as of and for the fiscal year ended August 31, 2011 (in thousands):

	Other Long-Term Liability			Accumulated Other Comprehensive Loss			Operating Expenses
Service cost	$	(91	)	$	-		$	90
Interest cost		(13	)		-			13
Prior service cost (including amortization)		(359	)		355			9
Actuarial gains/(losses)		(9	)		9			-
Totals	$	(472	)	$	364	(1)	$	112

(1)	The Company has recorded a deferred tax asset amount of $91,000, with the unrealized expense on deferred benefit plan and recorded net of tax, accumulated other comprehensive loss for $273,000.

Valuation Assumptions Used in the Accounting of the Plan:	Percentage
Discount rate		5	%
Future salary escalation		4	%
Percentage of employees assumed to withdraw from Company without a benefit ("turnover")		7	%
Percentage of employees assumed to withdraw from Company with a benefit ("disability")		1	%