SAE Annual Report 2011 - 54

SAE INTERNATIONAL
Notes to the Financial Statements (Continued) Note 10 - Contributed Services (Continued) In addition, a substantial number of SAE members have made significant contributions of their time to SAE’s programs. The value of this contributed time is not reflected in the accompanying financial statements since it does not meet the criteria for recognition under accounting principles generally accepted in the United States of America. Note 11 - Self Insurance SAE self-insures the medical and prescription drug benefits provided to all of its current and retired employees and their families. This plan is administered by a third party that processes, adjudicates and pays claims on behalf of SAE. SAE maintains stop-loss coverage based on a $110,000 deductible per participant and an annual aggregate deductible of approximately $2,600,000 to limit its liability for large specific and aggregate losses. SAE has recorded a liability for estimated future costs of incurred claims of approximately $102,000 at December 31, 2011 and $375,000 at December 31, 2010. The liability is included in accrued expenses in the statements of financial position. SAE accrues for its self-insured unemployment compensation based on actual and expected claims outstanding at year end. At December 31, 2011, SAE had accrued approximately $20,000. At December 31, 2010, SAE had accrued approximately $520,000 in claims related to a reduction in workforce in 2009. In 2011, SAE recognized an increase in net assets of approximately $500,000 due to the reversal of an accrual for potential unemployment compensation claims relating to the workforce reduction. SAE is no longer liable for any unemployment compensation claims relating to these terminated employees. This adjustment is included in nonoperating activities on the statement of activities. SAE recognized unemployment compensation expense of approximately $38,000 in 2011. No unemployment compensation expense was recognized in 2010. Note 12 - Related Party Transactions PRI PRI leases office space from SAE currently on a month-to-month basis. Annual rental income received from PRI approximated $288,000 for the year ended December 31, 2011 and $185,000 for the year ended December 31, 2010. Employees of PRI are eligible to participate in the defined benefit pension plan sponsored by SAE. In return, PRI reimburses SAE for pension costs associated with its employees. Pension expense reimbursed to SAE approximated $385,323 for the year ended December 31, 2011 and $413,788 for the year ended December 31, 2010.

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SAE Annual Report 2011

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