Employee Benefits

12 Months Ended

Jun. 30, 2020

Note 15: Employee Benefits

The Company sponsors a noncontributory postretirement health benefit plan (postretirement plan). The postretirement plan provides medical coverage benefits for former employees and their spouses upon retirement. The postretirement plan has no assets to offset the future liabilities incurred under the postretirement plan. The Company’s funding policy is to make the minimum annual contribution that is required by applicable regulations, plus such amounts as the Company may determine to be appropriate from time to time. The Company expects to contribute $191,000 to the plan in fiscal year 2021.

The Company uses a June 30 measurement date for the plan. Information about the plan’s funded status and pension cost follows:


	2020			2019
Change in benefit obligation
Beginning of year	$	2,919		$	2,770
Service cost		53			50
Interest cost		93			107
Actuarial gain		355			106
Benefits paid		(114	)		(114	)

End of year	$	3,306		$	2,919

Significant balances, costs and assumptions are:


	Postretirement Plan
	2020			2019
Benefit obligation	$	3,306		$	2,919
Fair value of plan assets		—			—

Funded status	$	(3,306	)	$	(2,919	)

Accumulated benefit obligation	$	3,306		$	2,919


Amounts recognized in the consolidated balance sheets:
Accrued benefit cost	$	3,306		$	2,919

Components of net periodic benefit cost:


	2020		2019
Service cost	$	53	$	50
Interest cost		93		107
Amortization of (Gain) or Loss		25		16

	$	171	$	173

Amounts recognized in accumulated other comprehensive income not yet recognized as components of net periodic benefit cost consist of:


	2020		2019
Net loss	$	860	$	531

Other significant balances and costs are:


	2020		2019
Employer contribution	$	114	$	114
Benefits paid		114		114
Benefit costs		171		173

Other changes in plan assets and benefit obligations recognized in other comprehensive income are described in Note 12.

The estimated net loss, prior service cost and transition obligation for the postretirement plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost of the next fiscal year are $59,000, $0, and $0, respectively.

A discount rate of 3.25% was used for both 2020 and 2019, to determine the benefit obligations and benefit costs.

Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A

one-percentage-point

change in assumed health care cost trend rates would have the following effects:


	One- Percentage-Point Increase		One- Percentage-Point Decrease
Effect on total of service and interest cost components	$	4	$	(4	)
Effect on postretirement benefit obligation		36		(34	)

For measurement purposes, a 9% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2020, 2021 and 2022, respectively. The rate was assumed to decrease gradually to 5% by the year 2031 and remain at that level thereafter.

The following postretirement plan benefit payments, which reflect expected future service, as appropriate, are expected to be paid as of June 30, 2020:


2021	$	137
2022		168
2023		183
2024		199
2025		195
2026-2030		986

The Company has a 401(k) plan covering substantially all employees. The Company matches 25% of the first 5% of compensation that a participant defers. Employer contributions charged to expense for 2020 and 2019 were $81,000 and $68,000, respectively. The plan also includes an Employer Profit Sharing contribution which allows all eligible participants to receive at least 5% of their Plan year salary. The Company’s contributions for the plan years ended June 30, 2020 and 2019 were $602,000 and $510,000, respectively.

The Company has deferred compensation agreements for directors, which provides benefits payable upon normal retirement age of 72. The present value of the estimated liability under the agreement is being accrued using a discount rate of 6 percent. The deferred compensation charged to expense totaled $249,000 and $220,000 for the years ended June 30, 2020 and 2019, respectively. The agreements’ accrued liability of $1.6 million and $1.5 million as of June 30, 2020 and 2019, respectively, is included in other liabilities in the consolidated balance sheets. The following benefit payments are expected to be paid for these agreements:


2021	$	121
2022		151
2023		133
2024		134
2025		134
Thereafter		3,928

	$	4,601