ionian institution 



I of the Chief Financial Officer 



31 



369 



SMITHSONIAN INSTITUTION 



Notes to Financial Statements 



September 30, 2000 



($ millions) 



Components of net periodic benefit cost: 



Service cost 0.3 



Interest cost 0.3 



Amortization of transition obligation 0.3 



Amortization of unrecognized gain (0.6) 



Weighted-average assumptions as of September 30: 

 Discount rate 



Expected return on plan assets 

 Rate of compensation increase 



The projected benefit obligation at September 30, 2000 was determined assuming a 6.5 percent annual 

 rate of increase in the per capita cost of covered health care benefits for fiscal year 200 1 . The rate was 

 assumed to decrease gradually to 4.5 percent for fiscal year 2004 and remain at that level thereafter. A 

 one percent change in the assumed health care cost trend rate at September 30, 2000 would have 

 resulted in an approximate $.5 increase or $.4 decrease in the postretirement benefit obligation and an 

 approximate $. I increase or decrease in the 2000 postretirement benefit cost. 



(13) Income Taxes 



The Smithsonian is recognized as exempt from income taxation under the provisions of 

 Section 501(c)(3) of the Internal Revenue Code (the Code). Organizations described in that section are 

 taxable only on their unrelated business income. Periodical advertising sales is the principal source of 

 unrelated business income for the Smithsonian. An IRS determination letter has been received 

 supporting the Smithsonian's tax-exempt status. No provision for income taxes was required for fiscal 

 year 2000. 



0.3 



8.25% 

 8.25% 

 3.50% 



