HARVARD CLUB OF BOSTON RETIREMENT PLAN FOR EMPLOYEES

Notes to Financial Statements

Accounting estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Note 3 – Actuarial present value of accumulated plan benefits

Accumulated plan benefits are those future payments that are attributable under the Plan’s provisions to the service that employees have rendered. Accumulated plan benefits include benefits expected to be paid to (a) retired or terminated employees or their beneficiaries, (b) beneficiaries of employees who have died, and (c) present employees or their beneficiaries. Benefits payable under all circumstances – retirement, death, disability, and termination of employment – are included, to the extent they are deemed attributable to employee service rendered to the valuation date.

The actuarial present value of accumulated plan benefits is determined by the Plan’s actuary and is that amount which results from applying actuarial assumptions to adjust the accumulated plan benefits to reflect the time value of money and the probability of payment between the valuation date and the expected date of payment. The actuarial value of accumulated plan benefits is as follows as of:

The net increase is a result of the following changes:

The significant actuarial assumptions used in the valuations for both periods were: retirement age (65); life expectancy (the 2022 and 2021 Mortality Tables); discount rate (4.45% and 7.0% for August 31, 2022 and 2021, respectively); and investment return (6% and 7.5% for August 31, 2022 and 2021, respectively). The actuarial valuation reflects the benefit freeze effective September 1, 2012 and the related assumptions are based on the presumption that the Plan will continue. If the Plan were terminated, different actuarial assumptions and other factors might be applicable.