FAS-106 CALCULATIONS

Beginning in 1995, employers have been required to recognize the liability for post-retirement health benefits in their financial statements. Since then, Huttleston Associates, Incorporated has been working with employers of all sizes to help them comply.

We produce a report based on the employers FASB-106 obligation that includes an estimate of the annual liability (Net Periodic Post-retirement Benefit Cost) for the current financial period and the total fund (Accumulated Post-retirement Benefit Obligation).

We will also include a sensitivity analysis as part of our service. Both FASB and actuarial standards of practice require the analysis, which is the effect of increasing the medical trend assumption by one percentage point. In our report, we also indicate the sensitivity of a one percent change in the discount rate as well. The assumptions on medical trend and discount rate are discussed and compared in relation to the factors used by other employers declaring FAS-106 liabilities.

To learn more regarding how we provide FAS-106 Calculations, please contact Jeff Frey.