2003 annual report - California Society of Certified Public Accountants

California CPA, Sept, 2003

7. OPERATING LEASE OBLIGATIONS

CalCPA and CAMICO lease office space for their corporate headquarters under non-cancelable operating leases expiring in July 2010. GIT and the Foundation sublease a portion of the office space for their corporate headquarters under non-cancelable sublease agreements with CalCPA and CAMICO, respectively, also expiring in July 2010. Sublease payments are based on square footage occupied.

CalCPA also leases office space in Sacramento and Glendale under non-cancelable operating leases expiring in February 2008 and November 2008, respectively.

Future minimum lease payments under these agreements, net of minimum sublease receipts from GIT, are as follows:

Year endive April 30:           CalCPA   Foundation    Consolidated

2004                            $  617       $  339          $  956
2005                               650          352           1,002
2006                               674          367           1,041
2007                               694          381           1,075
2008                               680          396           1,076

Thereafter                       1,123          949           2,072

Total                          $ 4,438      $ 2,784         $ 7,222

Rent expense, recorded net of the   portion of CalCPAs lease
paid by GIT, is as follows:
                                               2003            2002

CalCPA                                     $   640          $   653
Foundation                                     365              361
Consolidated                               $ 1,005          $ 1,014

8. RETIREMENT PLANS

CalCPA sponsored a defined benefit pension plan for substantially all full-time employees of CalCPA and the Foundation. Effective April 30, 2003, the defined benefit pension plan has been frozen, and is therefore closed to farther benefit accrual or new participants. CalCPA's funding policy is to contribute annually an amount not less than the ERISA minimum funding requirement and not more than the amount that would be deductible for federal income taxes. The following information is based on computations by the plan actuary:

                                   2003      2002
Net periodic pension expense:
  CalCPA                         $  435     $ 278
  Foundation                        148       109

    Total                        $  583     $ 387

Employer contributions           $  626     $ 896

Benefits paid                    $   82     $  85

The following weighted average assumptions were
used in the actuarial computations:

                                   2003      2002

Discount rate                     6.00%     7.00%
Expected long-term rate
  of return on plan assets        8.00%     9.00%
Kate of compensation increase     6.00%     6.00%

The plan's funded status is as follows:

                                   2003      2002
Fair value of plan assets
  as of April 30                $ 3,737     3,733
Projected benefit obligation
  as of April 30                (5,016)   (6,022)

Funded status                   (1,879)   (2,284)

Accrued pension liability
  included in the statements
  of financial position         (1,630)   (1,652)