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Postretirement Benefits | 12 Months Ended
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May 31, 2016
Postemployment Benefits [Abstract] |
Postretirement Benefits | NOTE M – POSTRETIREMENT BENEFITS We sponsor several unfunded-health-care-benefit plans for certain of our retired employees as well as post-retirement life insurance for certain key employees. Eligibility for these benefits is based upon various requirements. The following table illustrates the effect on operations of these plans for the three years ended May 31, 2016:
|  | U.S. Plans |  |  | Non-U.S. Plans |
(In thousands) |  | 2016 |  | 2015 |  | 2014 |  |  | 2016 |  | 2015 |  | 2014 |
Service cost - Benefits earned during the period |  | $ | - |  | $ | - |  | $ | - |  |  | $ | 1,061 |  | $ | 1,173 |  | $ | 1,264 |
Interest cost on the accumulated obligation |  |  | 235 |  |  | 263 |  |  | 297 |  |  |  | 832 |  |  | 1,155 |  |  | 1,225 |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service (credit) |  |  | (247 | ) |  | (247 | ) |  | (153 | ) |  |  |  |  |  |  |  |  |  |
Net actuarial (gains) losses |  |  |  |  |  | (136 | ) |  | (144 | ) |  |  | 229 |  |  | 391 |  |  | 516 |
Net Periodic Postretirement (Benefit) Expense |  | $ | (12 | ) | $ | (120 | ) | $ | - |  |  | $ | 2,122 |  | $ | 2,719 |  | $ | 3,005 |
The changes in benefit obligations of the plans at May 31, 2016 and 2015 were as follows:
|  | U.S. Plans |  |  | Non-U.S. Plans |
(In thousands) |  | 2016 |  | 2015 |  |  | 2016 |  | 2015 |
Accumulated postretirement benefit obligation at beginning of year |  | $ | 7,640 |  | $ | 6,787 |  |  | $ | 24,646 |  | $ | 28,255 |
Service cost |  |  |  |  |  |  |  |  |  | 1,061 |  |  | 1,173 |
Interest cost |  |  | 235 |  |  | 263 |  |  |  | 832 |  |  | 1,155 |
Benefit payments |  |  | (251 | ) |  | (230 | ) |  |  | (464 | ) |  | (536 | )
Actuarial (gains) losses |  |  | 29 |  |  | 820 |  |  |  | 536 |  |  | (1,751 | )
Currency exchange rate changes |  |  |  |  |  |  |  |  |  | (1,191 | ) |  | (3,650 | )
Accumulated and accrued postretirement benefit obligation at end of year |  | $ | 7,653 |  | $ | 7,640 |  |  | $ | 25,420 |  | $ | 24,646 |
In determining the postretirement benefit amounts outlined above, measurement dates as of May 31 for each period were applied. Amounts recognized in the Consolidated Balance Sheets for the years ended May 31, 2016 and 2015 are as follows:
|  | U.S. Plans |  |  | Non-U.S. Plans |
(In thousands) |  | 2016 |  | 2015 |  |  | 2016 |  | 2015 |
Current liabilities |  | $ | (455 | ) | $ | (430 | ) |  | $ | (482 | ) | $ | (454 | )
Noncurrent liabilities |  |  | (7,198 | ) |  | (7,210 | ) |  |  | (24,938 | ) |  | (24,192 | )
Net Amount Recognized |  | $ | (7,653 | ) | $ | (7,640 | ) |  | $ | (25,420 | ) | $ | (24,646 | )
The following table presents the pretax net actuarial gain (loss) and prior service credits recognized in accumulated other comprehensive income (loss) not affecting retained earnings:
|  | U.S. Plans |  |  | Non-U.S. Plans |
(In thousands) |  | 2016 |  | 2015 |  |  | 2016 |  | 2015 |
Net actuarial gain (loss) |  | $ | 94 |  | $ | 124 |  |  | $ | (5,986 | ) | $ | (5,968 | )
Prior service credits |  |  | 1,341 |  |  | 1,587 |  |  |  |  |  |  |  |
Total recognized in accumulated other comprehensive income not affecting retained earnings |  | $ | 1,435 |  | $ | 1,711 |  |  | $ | (5,986 | ) | $ | (5,968 | )
The following table includes the changes recognized in other comprehensive income:
|  | U.S. Plans |  |  | Non-U.S. Plans |
(In thousands) |  | 2016 |  | 2015 |  |  | 2016 |  | 2015 |
Changes in plan assets and benefit obligations recognized in other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service cost |  | $ | - |  | $ | - |  |  | $ | - |  | $ | - |
Net loss (gain) arising during the year |  |  | 29 |  |  | 820 |  |  |  | 536 |  |  | (1,751 | )
Effect of exchange rates on amounts included in AOCI |  |  |  |  |  |  |  |  |  | (290 | ) |  | (1,026 | )
Amounts recognized as a component of net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization or curtailment recognition of prior service credit (cost) |  |  | 247 |  |  | 247 |  |  |  |  |  |  |  |
Amortization or settlement recognition of net gain (loss) |  |  | - |  |  | 136 |  |  |  | (229 | ) |  | (391 | )
Total recognized in other comprehensive loss (income) |  | $ | 276 |  | $ | 1,203 |  |  | $ | 17 |  | $ | (3,168 | )
The following weighted-average assumptions were used to determine our year-end benefit obligations and net periodic postretirement benefit costs under the plans:
|  | U.S. Plans |  |  | Non-U.S. Plans |  |  |  |  |  |  |  |  |
Year-End Benefit Obligations |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |  |  |  |  |  |  |  |  |
Discount rate |  |  | 3.76 | % |  |  | 3.95 | % |  |  | 3.92 | % |  |  | 4.00 | % |  |  |  |  |  |  |  |
Current healthcare cost trend rate |  |  | 10.37 | % |  |  | 11.34 | % |  |  | 5.98 | % |  |  | 6.06 | % |  |  |  |  |  |  |  |
Ultimate healthcare cost trend rate |  |  | 4.36 | % |  |  | 4.50 | % |  |  | 4.20 | % |  |  | 4.20 | % |  |  |  |  |  |  |  |
Year ultimate healthcare cost trend rate will be realized |  |  | 2037 |  |  |  | 2029 |  |  |  | 2030 |  |  |  | 2030 |  |  |  |  |  |  |  |  |
|  | U.S. Plans |  |  | Non-U.S. Plans |
Net Periodic Postretirement Cost |  | 2016 |  |  | 2015 |  |  | 2014 |  |  | 2016 |  |  | 2015 |  |  | 2014 |
Discount rate |  |  | 3.95 | % |  |  | 4.00 | % |  |  | 3.95 | % |  |  | 4.00 | % |  |  | 4.40 | % |  |  | 4.50 | %
Healthcare cost trend rate |  |  | 11.34 | % |  |  | 12.28 | % |  |  | 7.54 | % |  |  | 6.06 | % |  |  | 6.31 | % |  |  | 6.43 | %
Ultimate healthcare cost trend rate |  |  | 4.50 | % |  |  | 4.50 | % |  |  | 4.50 | % |  |  | 4.20 | % |  |  | 4.20 | % |  |  | 4.20 | %
Year ultimate healthcare cost trend rate will be realized |  |  | 2029 |  |  |  | 2029 |  |  |  | 2029 |  |  |  | 2030 |  |  |  | 2030 |  |  |  | 2030 |
Increasing or decreasing current healthcare cost trend rates by 1% would affect our accumulated postretirement benefit obligation and net postretirement expense by the following amounts for the years ended May 31, 2016 and 2015:
|  | U.S. Plans |  |  | Non-U.S. Plans |
(In thousands) |  | 2016 |  | 2015 |  |  | 2016 |  | 2015 |
1% Increase in trend rate |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accumulated Benefit Obligation |  | $ | 313 |  | $ | 334 |  |  | $ | 5,552 |  | $ | 6,430 |
Postretirement Cost |  |  | 11 |  |  | 10 |  |  |  | 504 |  |  | 675 |
1% Decrease in trend rate |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accumulated Benefit Obligation |  | $ | (272 | ) | $ | (290 | ) |  | $ | (4,289 | ) | $ | (3,295 | )
Postretirement Cost |  |  | (9 | ) |  | (8 | ) |  |  | (383 | ) |  | (499 | )
We expect to pay approximately $0.9 million to $1.3 million in estimated postretirement benefits in each of the next five years. In the five years thereafter (2022-2026) we expect to pay a cumulative total of $7.7 million. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”), was signed into law on December 8, 2003. The Act provides for prescription drug benefits under Medicare Part D and contains a subsidy to plan sponsors who provide “actuarially equivalent” prescription drug plans. Our actuary has determined that the prescription drug benefit provided by our postretirement plan is considered to be actuarially equivalent to the benefits provided under the Act for all years since inception. However, effective January 1, 2014, we changed our retiree medical offering to a Medicare Advantage Plan. Under the Medicare Advantage Plan, any Part D subsidy belongs to the insurance carrier. Our results reflect this change.

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- Definition The entire disclosure for postemployment benefits, which may include supplemental unemployment benefits, obligations recognized for all types of benefits provided to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. Disclosure may also include discussion that an obligation for postemployment benefits is not accrued in accordance with regulation only because the amount cannot be reasonably estimated. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6410195&loc=d3e80090-111668 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -SubTopic 10 -Section 25 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6410138&loc=d3e79691-111665 + Details
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