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POST EMPLOYMENT PLANS
 12 Months Ended
Aug. 31, 2024
Retirement Benefits [Abstract]  
POST EMPLOYMENT PLANS POST EMPLOYMENT PLANS
Defined Contribution Plans
PriceSmart offers a defined contribution 401(k) retirement plan to its U.S. employees, including warehouse club employees in the U.S. Virgin Islands, which auto-enrolls employees in the plan immediately on the first day of employment. The Company makes non-discretionary 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. The Company also makes incremental non-discretionary contributions to the 401(k) plan to the employees who defer up to 2% of their salary. Employer contributions to the 401(k) plan for the Company's U.S. employees were $3.4 million during fiscal year 2024 and $2.9 million during fiscal years 2023 and 2022.
PriceSmart also offers defined contribution retirement plans in many of its subsidiaries. The Company makes non-discretionary contributions to these plans based on the employee’s salary, regardless of the employee’s own contributions to the plan, up to the maximum allowed. The expenses associated with the plans for the Company’s non-U.S. employees were $4.6 million, $4.5 million and $3.6 million during fiscal years 2024, 2023 and 2022, respectively.
Defined Benefit Plans
The Company's subsidiaries located in three countries have unfunded post-employment benefit plans (defined benefit plans) in which the subsidiary is required to pay a specified benefit upon retirement, voluntary departure or death of the employee. The amount of the benefit is predetermined by a formula based on the employee's earnings history, tenure of service and age. Because the obligation to provide benefits arises as employees render the services necessary to earn the benefits pursuant to the terms of the plan, the Company recognizes the cost of providing the benefits over the projected employee service periods. These payments are only due if an employee reaches certain thresholds, such as tenure and/or age. Therefore, these plans are treated as defined benefit plans. For these defined benefit plans, the Company has engaged actuaries to assist with estimating the current costs associated with these future benefits. The liabilities for these unfunded plans are recorded as non-current liabilities.
The following table summarizes the amount of the funding obligation and the line items in which it is recorded on the consolidated balance sheets as of August 31, 2024 and 2023 and consolidated statements of income for the fiscal years ended August 31, 2024, 2023 and 2022 (in thousands):
Other Long-Term
Liability		Accumulated Other
Comprehensive Loss		Operating Expenses
August 31,Year Ended August 31,
202420232024202320242023 2022
Start of period$(5,843)$(2,976)$3,604$1,205$—$—$—
Service cost(601)(303)——555365315
Interest cost(289)(139)——289139129
Prior service cost (including amortization)— —(24)(26)242636
Actuarial gains/(losses)1,223 (2,425)(1,223)2,42537312292
Totals$(5,510)$(5,843)$2,357 $3,604 
(1)
$1,241 $652 $572 
(1)The Company has recorded a deferred tax asset of $756,000 and $1,106,000 as of August 31, 2024 and 2023, respectively, relating to the unrealized expense on defined benefit plans. The Company also recorded accumulated other comprehensive loss, net of tax, for $1,602,000 and $2,500,000 as of August 31, 2024 and 2023, 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:20242023
Discount rate
5.0% to 9.7%
4.6% to 6.4%
Future salary escalation
3.5% to 4.0%
3.0% to 5.2%
Percentage of employees assumed to withdraw from Company without a benefit (“turnover”)
7.5% to 15.0%
6.7% to 15.0%
Percentage of employees assumed to withdraw from Company with a benefit (“disability”)
0.5% to 1.5%
0.5% to 1.5%
For the fiscal year ending August 31, 2025, the Company expects to recognize, as components of net periodic benefit cost, the following amounts currently recorded in accumulated other comprehensive loss (in thousands):
Prior service cost$26
Amortization of actuarial loss286
$312
Other Post-Employment Benefit Plans
Some of the Company’s 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. 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 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. Therefore, these plans are not treated as defined benefit plans. 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,
202420232024202320242023202420232022
Other Post Employment Plans$850 $738 $5,694 $5,077 $5,389 $4,859 $2,130 $1,754 $1,423 
(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.