RETIREMENT PLAN

Defined Contribution Plans

PriceSmart offers a defined contribution retirement and 401(k) plan to its U.S. employees, which allows employees to enroll in the plan after 90 days of employment. Enrollment in these plans begins on the first of the month following the employee's eligibility. Effective January 1, 2011, the Company makes nondiscretionary contributions to the 401(k) plan with a 4% “Company Contribution” based on the employee’s salary regardless of the employee’s own contributions to the plan up to the IRS maximum allowed. Prior to January 1, 2011, the Company made nondiscretionary contributions to the 401(k) plan equal to 100% of the participant's contribution up to an annual maximum of 4% of base compensation up to the IRS maximum allowed. Employer contributions to the 401(k) plan for the Company's U.S. employees were $1.0 million, $821,000 and $566,000 during fiscal years 2012, 2011 and 2010, respectively. The Company has defined contribution plans for its employees in several countries and contributes a percentage of the respective employees' salary. Amounts contributed under these plans were $642,000, $497,000 and $409,000 during fiscal years 2012, 2011 and 2010, respectively.

Defined Benefit Plan

On January 21, 2011, PS Operations Ltd., a subsidiary of the Company in Trinidad, signed a collective labor agreement with the Oil Workers Trade Union on behalf of the hourly rated weekly paid and hourly rated bi-monthly paid employees who are members of the Union. Management has determined that the agreement contains a Defined Benefit Plan within the contract for retirement pay. The Company will not be funding the obligation. As a result, the entire amount of the benefit obligation is presented as a long-term liability on the consolidated balance sheets. The Company will make payments on any obligation that becomes due from available cash. The following table summarizes the amount of the funding obligation and the line items at which it is recorded on the consolidated balance sheets and consolidated statements of income as of and for the fiscal years ended August 31, 2012 and 2011 (in thousands):



	Other Long-Term Liability						Accumulated Other Comprehensive Loss						Operating Expenses
	Years Ended August 31,
	2012			2011			2012			2011			2012		2011
Start of Period	$	(471	)	$	—		$	364		$	—		$	—	$	—
Service cost	(140		)	(90		)	—			—			140		90
Interest cost	(31		)	(13		)	—			—			31		13
Prior service cost (including amortization)	—			(359		)	(19		)	355			14		9
Actuarial gains/(losses)	246			(9		)	(246		)	9			—		—
Totals	$	(396	)	$	(471	)	$	99		$	364	⁽¹⁾	$	185	$	112


(1)	The Company has recorded a deferred tax asset amount of $25,000 and $91,000 as of August 31, 2012 and 2011, respectively, relating to the unrealized expense on deferred benefit plan. The Company also recorded accumulated other comprehensive loss, net of tax, for $74,000 and $273,000 as of August 31, 2012 and 2011, respectively.



	Years Ended August 31,
Valuation Assumptions Used in the Accounting of the Plan:	2012		2011
Discount rate	3.5	%	5.0	%
Future salary escalation	5.0	%	4.0	%
Percentage of employees assumed to withdraw from Company without a benefit (“turnover”)	11.0	%	7.0	%
Percentage of employees assumed to withdraw from Company with a benefit (“disability”)	0.5	%	1.0	%