Profit Sharing Plans

We provide tax-qualified profit sharing retirement plans for the benefit of eligible employees, former employees and retirees in the United States 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 Directors (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 2019, 2018 or 2017.

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. We make annual contributions to the ESOP equal to the ESOP’s debt service. 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 $11.3 million, $11.4 million and $10.7 million for fiscal 2019, 2018 and 2017, respectively.

Listed below is a summary of these financing arrangements as of fiscal year-end:

		Outstanding as of		Interest Payments
Financing Date		March 31, 2019		2019		2018		2017
		(In thousands)
June, 1991	$	–	$	1	$	1	$	2
July, 2009		233		17		26		36
February, 2016		4,966		190		242		–

Leveraged contributions to the Plan Trust during fiscal 2019, 2018 and 2017 were $1.0 million, $1.0 million and $0.2 million, respectively. In fiscal 2019, 2018 and 2017, the Company made non-leveraged contributions of $5.0 million, $11.0 and $11.0 million, respectively to the Plan Trust. In both fiscal 2018 and 2017, $0.1 million of dividends from unallocated shares were applied to debt.

Shares held by the Plan were as follows:

		Years Ended March 31,
		2019		2018
		(In thousands)
Allocated shares		1,069		1,112
Unreleased shares - leveraged		16		19
Fair value of unreleased shares - leveraged	$	6,019	$	6,448
Unreleased shares - non-leveraged		–		13
Fair value of unreleased shares - non-leveraged	$	–	$	4,557

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, 2019 and March 31, 2018, respectively. During fiscal 2019, we released for allocation 3,661 leveraged shares and 27,969 non-leveraged shares. As of December 31, 2019, it is estimated there will be 16,260 shares committed to be released.

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,
		2019		2018		2017
		(In thousands)
Service cost for benefits earned during the period	$	1,108	$	1,073	$	1,026
Other components of net periodic benefit costs:
Interest cost on accumulated postretirement benefit		943		869		814
Other components		70		58		88
Total other components of net periodic benefit costs		1,013		927		902
Net periodic postretirement benefit cost	$	2,121	$	2,000	$	1,928

The fiscal 2019 and fiscal 2018 post retirement benefit liability included the following components:

		Years Ended March 31,
		2019		2018
		(In thousands)
Beginning of year	$	23,316	$	22,247
Service cost for benefits earned during the period		1,108		1,073
Interest cost on accumulated post retirement benefit		943		869
Net benefit payments and expense		(979)		(644)
Actuarial (gain) loss		1,429		(229)
Accumulated postretirement benefit obligation		25,817		23,316

Current liabilities		1,037		802
Non-current liabilities		24,780		22,514

Total post retirement benefit liability recognized in statement of financial position		25,817		23,316
Components included in accumulated other comprehensive income (loss):
Unrecognized net loss		(3,890)		(2,530)
Cumulative net periodic benefit cost (in excess of employer contribution)	$	21,927	$	20,786

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

	Years Ended March 31,
	2019	2018	2017
	(In percentages)
Accumulated postretirement benefit obligation	3.83%	3.98%	3.94%

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 2019 was 6.7% 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 2018 (and used to measure the fiscal 2019 net periodic benefit cost) was 6.9% in the initial year and was projected to decline annually to an ultimate rate of 4.5% in fiscal 2038.

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 $274 thousand and the total of the service cost and interest cost components would increase by $27 thousand. 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 $309 thousand and the total of the service cost and interest cost components would decrease by $31 thousand.

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:
2020	$	1,037
2021		1,227
2022		1,445
2023		1,665
2024		1,906
2025 through 2028		11,863
Total	$	19,143