Note 14. Employee Benefit Plans

Profit Sharing Plans

We provide tax-qualified profit sharing retirement plans for the benefit of eligible employees, former employees and retirees in the U.S. and Canada. The plans are designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis and provide for annual discretionary employer contributions. Amounts to be contributed are determined by the President and Chairman of the Board of the Company under the delegation of authority from the Board, pursuant to the terms of the Profit Sharing Plan. No contributions were made to the profit sharing plan during fiscal 2016, 2015 or 2014.

We also provide an employee savings plan which allows participants to defer income under Section 401(k) of the Internal Revenue Code of 1986.

ESOP Plan

We sponsor a leveraged ESOP that generally covers all employees with one year or more of service. The ESOP shares initially were pledged as collateral for its debt which was originally funded by U-Haul. As the debt is repaid, shares are released from collateral and allocated to active employees, based on the proportion of debt service paid in the year. ESOP shares are committed to be released monthly and ESOP compensation expense is recorded based on the current market price at the end of the month. These shares then become outstanding for the earnings per share computations. ESOP compensation expense was $11.6 million, $6.9 million and $6.6 million for fiscal 2016, 2015 and 2014, respectively. Listed below is a summary of these financing arrangements as of fiscal year-end:

		Outstanding as of		Interest Payments
Financing Date		March 31, 2016		2016		2015		2014
		(In thousands)
June, 1991	$	46	$	10	$	48	$	53
July, 2009		991		33		31		17
February, 2016		5,000		–		–		–

Leveraged contributions to the Plan Trust during fiscal 2016, 2015 and 2014 were $0.4 million, $1.0 million and $0.7 million, respectively. In fiscal 2016 and 2015, the Company made non-leveraged contributions of $4.0 and $8.0 million, respectively to the Plan Trust. In fiscal 2014, $0.6 million of common stock dividends paid to unallocated shares was applied towards debt service.

Shares held by the Plan were as follows:

		Years Ended March 31,
		2016		2015
		(In thousands)
Allocated shares		1,203		1,249
Unreleased shares - leveraged		22		14
Fair value of unreleased shares - leveraged	$	8,072	$	4,781
Unreleased shares - non-leveraged		8		25
Fair value of unreleased shares - non-leveraged	$	2,756	$	8,242

The fair value of unreleased shares issued prior to 1992 is defined as the historical cost of such shares. The fair value of unreleased shares issued subsequent to December 31, 1992 is defined as the trading value of such shares as of March 31, 2016 and March 31, 2015, respectively.

Post Retirement and Post Employment Benefits

We provide medical and life insurance benefits to our eligible employees and their dependents upon retirement from the Company. The retirees must have attained age sixty-five and earned twenty years of full-time service upon retirement for coverage under the medical plan. The medical benefits are capped at a $20,000 lifetime maximum per covered person. The benefits are coordinated with Medicare and any other medical policies in force. Retirees who have attained age sixty-five and earned at least ten years of full-time service upon retirement from the Company are entitled to group term life insurance benefits. The life insurance benefit is $2,000 plus $100 for each year of employment over ten years. The plan is not funded and claims are paid as they are incurred. We use a March 31 measurement date for our post retirement benefit disclosures.

The components of net periodic post retirement benefit cost were as follows:

		Years Ended March 31,
		2016		2015		2014
		(In thousands)
Service cost for benefits earned during the period	$	961	$	827	$	726
Interest cost on accumulated postretirement benefit		752		720		564
Other components		35		14		19
Net periodic postretirement benefit cost	$	1,748	$	1,561	$	1,309

The fiscal 2016 and fiscal 2015 post retirement benefit liability included the following components:

		Years Ended March 31,
		2016		2015
		(In thousands)
Beginning of year	$	18,554	$	16,119
Service cost for benefits earned during the period		961		827
Interest cost on accumulated post retirement benefit		752		720
Net benefit payments and expense		(541)		(450)
Actuarial loss		1,065		1,338
Accumulated postretirement benefit obligation		20,791		18,554

Current liabilities		658		513
Non-current liabilities		20,133		18,041

Total post retirement benefit liability recognized in statement of financial position		20,791		18,554
Components included in accumulated other comprehensive income (loss):
Unrecognized net loss		(2,847)		(1,817)
Cumulative net periodic benefit cost (in excess of employer contribution)	$	17,944	$	16,737

The discount rate assumptions in computing the information above were as follows:

In December 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 became law. Net periodic post retirement benefit cost above includes the effect of the subsidy. The discount rate represents the expected yield on a portfolio of high grade (AA to AAA rated or equivalent) fixed income investments with cash flow streams sufficient to satisfy benefit obligations under the plan when due. Fluctuations in the discount rate assumptions primarily reflect changes in U.S. interest rates. The assumed health care cost trend rate used to measure the accumulated postretirement benefit obligation as of the end of fiscal 2016 was 7.3% in the initial year and was projected to decline annually to an ultimate rate of 4.5% in fiscal 2038. The assumed health care cost trend rate used to measure the accumulated post retirement benefit obligation as of the end of fiscal 2015 (and used to measure the fiscal 2016 net periodic benefit cost) was 7.3% in the initial year and was projected to decline annually to an ultimate rate of 4.5% in fiscal 2029.

If the estimated health care cost trend rate assumptions were increased by one percent, the accumulated post retirement benefit obligation as of fiscal year-end would increase by $219,243 and the total of the service cost and interest cost components would increase by $26,180. A decrease in the estimated health care cost trend rate assumption of one percent would decrease the accumulated post retirement benefit obligation as of fiscal year-end by $314,603 and the total of the service cost and interest cost components would decrease by $30,103.

Post employment benefits provided by us, other than upon retirement, are not material.

Future net benefit payments are expected as follows:

		Future Net Benefit Payments
		(In thousands)
Year-ended:
2017	$	658
2018		773
2019		914
2020		1,073
2021		1,263
2022 through 2026		9,169
Total	$	13,850

Years Ended March 31,

(In percentages)

Accumulated postretirement benefit obligation