Defined Contribution Plans

PriceSmart offers a defined contribution 401(k) retirement 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. 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. Employer contributions to the 401(k) plan for the Company's U.S. employees were $1.3 million, $1.2 million and $1.1 million during fiscal years 2015, 2014 and 2013, respectively.

Defined Benefit Plans

Some of the Company's subsidiaries are parties to unfunded post-employment benefit plans in which the subsidiary is required to pay a specified benefit upon retirement, voluntary departure or death of the employee. The amount of the benefit is predetermined by a formula based on the employee's earnings history, tenure of service and age. Because the obligation to provide benefits arises as employees render the services necessary to earn the benefits pursuant to the terms of the plan, the Company recognizes the cost of providing the benefits over the projected employee service periods. These payments are only due if an employee reaches certain thresholds, such as tenure and/or age. Therefore, these plans are treated as defined benefit plans. For these defined benefit plans, the Company has engaged actuaries to assist with estimating the current costs associated with these future benefits. The liabilities for these unfunded plans are recorded as non-current liabilities.

The following table summarizes the amount of the funding obligation and the line items in which it is recorded on the consolidated balance sheets and consolidated statements of income as of and for the fiscal years ended August 31, 2015 and 2014 (in thousands):



	Other Long-Term Liability						Accumulated Other Comprehensive Loss							Operating Expenses
	Year Ended August 31,
	2015			2014			2015			2014				2015			2014			2013
Start of Period	$	(628	)	$	(604	)	$	(148	)	$	204			$	—		$	—		$	—
Service cost	66			(355		)				—				192			356			106
Interest cost	(21		)	(14		)	—			—				21			14			17
Prior service cost (including amortization)	(311		)	—			407			(15		)		(232		)	15			15
Actuarial gains/(losses)	87			345			(87		)	(337		)		(91		)	(8		)	(27		)
Totals	$	(807	)	$	(628	)	$	172		$	(148	)	⁽¹⁾	$	(110	)	$	377		$	111


⁽¹⁾	The Company has recorded a deferred tax (liability)/asset of $59,000 and $(35,000) as of August 31, 2015 and 2014, respectively, relating to the unrealized expense on defined benefit plans. The Company also recorded accumulated other comprehensive income (loss), net of tax, for $(113,000) and $113,000 as of August 31, 2015 and 2014, respectively.

The valuation assumptions used to calculate the liability for the defined benefit plans differ based on the country where the plan applies. These assumptions are summarized as follows:



	Year Ended August 31,
Valuation Assumptions:	2015	2014
Discount rate	1.5% to 10.8%	1.5	%
Future salary escalation	3.0% to 5.5%	5.0	%
Percentage of employees assumed to withdraw from Company without a benefit (“turnover”)	3.5% to 19.5%	17.0	%
Percentage of employees assumed to withdraw from Company with a benefit (“disability”)	0.5% to 11.4%	0.5	%

Other Post-Employment Plans

Other Company subsidiaries are parties to funded and unfunded post-employment benefit plans based on services that the employees have rendered. These plans require the Company to pay a specified benefit on retirement, voluntary departure or death of the employee, or monthly payments to an external fund manager. The amount of these payments is predetermined by a formula based on the employee's earnings history and tenure of service. Since the obligation to provide benefits are based on services that the employees have rendered, the cost associated with providing the benefits is recognized as the employee provides those services. The employees' rights to receive payment on these plans are not dependent on their reaching certain thresholds like age or tenure. For these post-employment benefit plans, the Company has accrued liabilities that are recorded as accrued salaries and benefits and other long-term liabilities. The following table summarizes the amounts recorded on the balance sheet and amounts expensed on the consolidated statements of income (in thousands):



	Accrued Salaries and Benefits						Other Long-Term Liability						Restricted Cash Held ⁽¹⁾				Operating Expenses
	Years Ended August 31,
	2015			2014			2015			2014			2015		2014		2015		2014		2013
Other Post Employment Plans	$	(397	)	$	(341	)	$	(1,950	)	$	(929	)	$	1,403	$	1,226	$	2,817	$	1,628	$	1,296

⁽¹⁾ With some locations, local statutes require the applicable Company subsidiary to deposit cash in its own name with designated fund managers. The funds earn interest which the Company recognizes as interest income.