Employee Retirement Plans

6 Months Ended

Jun. 30, 2011

Employee Retirement Plans [Abstract]

Employee Retirement Plans

Note 14. Employee Retirement Plans.

The Bank participates in the Pentegra Defined Benefit Plan for Financial Institutions (“DB Plan”). In addition, the Bank maintains a Benefit Equalization Plan (“BEP”) that restores defined benefits and contribution benefits to those employees who have had their qualified defined benefit and defined contribution benefits limited by IRS regulations. The Bank also offers a Retiree Medical Benefit Plan, which is a postretirement health benefit plan. There are no funded plan assets that have been designated to provide postretirement health benefits.

Retirement Plan Expenses — Summary

The following table presents employee retirement plan expenses¹ for the three and six months ended June 30, 2011 and the same periods in 2010 (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2011		2010		2011		2010
Defined Benefit Plan	$	2,525	$	1,311	$	28,992	$	2,623
Benefit Equalization Plan (defined benefit)		695		570		1,390		1,140
Defined Contribution Plan		353		374		704		609
Postretirement Health Benefit Plan		284		281		569		562
Total retirement plan expenses	$	3,857	$	2,536	$	31,655	$	4,934

¹ In March 2011, the FHLBNY contributed $24.0 million to its Defined Benefit Plan to eliminate a funding shortfall. Prior to the contribution the DB Plan’s adjusted funding target attainment percentage (“AFTAP”) was 79.9% (80%). The AFTAP equals DB Plan assets divided by plan liabilities. Under the Pension Protection Act of 2006 (“PPA”), if the AFTAP in any future year is less than 80%, then the DB Plan will be restricted in its ability to provided increased benefits and /or lump sum distributions. If the AFTAP in any future year is less than 60%, then benefit accruals will be frozen. The contribution to the DB Plan was charged to Net income for the three months ended March 31, 2011. Subsequent to the contribution, the AFTAP was about 96%.

Components of the net periodic pension cost for the defined benefit component of the BEP, an unfunded plan, were as follows (in thousands):

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Service cost	$	165		$	163		$	330		$	326
Interest cost		323			279			646			558
Amortization of unrecognized prior service cost		(13	)		(16	)		(26	)		(33	)
Amortization of unrecognized net loss		220			144			440			289
Net periodic benefit cost	$	695		$	570		$	1,390		$	1,140

Key assumptions and other information for the actuarial calculations to determine current period’s benefit obligations for the BEP plan were as follows (dollars in thousands):

	June 30, 2011			December 31, 2010
Discount rate *		5.35	%		5.35	%
Salary increases		5.50	%		5.50	%
Amortization period (years)		8			8
Benefits paid during the period	$	(1,006)	**	$	(515	)

*	The discount rate was based on the Citigroup Pension Liability Index at December 31, 2010 and adjusted for duration.
**	Forecast for the entire year.

Postretirement Health Benefit Plan

The FHLBNY has a postretirement health benefit plan for retirees called the Retiree Medical Benefit Plan. Employees over the age of 55 are eligible provided they have completed ten years of service after age 45. Components of the net periodic benefit cost for the postretirement health benefit plan were (in thousands):

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
Service cost (benefits attributed to service during the period)	$	181		$	156		$	361		$	313
Interest cost on accumulated postretirement health benefit obligation		220			229			441			458
Amortization of loss		66			79			133			157
Amortization of prior service cost/(credit)		(183	)		(183	)		(366	)		(366	)
Net periodic postretirement health benefit cost	$	284		$	281		$	569		$	562

The measurement date used to determine current period’s benefit obligation was December 31, 2010. Key assumptions and other information to determine current period’s obligation for the postretirement health benefit plan were as follows:

	June 30, 2011			December 31, 2010
Weighted average discount rate		5.35	%		5.35	%
Health care cost trend rates:
Assumed for next year		9.00	%		9.00	%
Pre 65 Ultimate rate		5.00	%		5.00	%
Pre 65 Year that ultimate rate is reached		2016			2016
Post 65 Ultimate rate		6.00	%		6.00	%
Post 65 Year that ultimate rate is reached		2016			2016
Alternative amortization methods used to amortize
Prior service cost	Straight - line			Straight - line
Unrecognized net (gain) or loss	Straight - line			Straight - line

The discount rate was based on the Citigroup Pension Liability Index at December 31, 2010 and adjusted for duration.