3. Significant accounting policies (continued):

(g) Employee future benefits (continued):

(ii) Employee future benefits, other than pension:

The Commission pays certain health, dental and life insurance benefits, under unfunded defined benefit plans, on behalf of its retired employees. These benefits are provided through a group defined benefit plan. The Commission is the legal sponsor of the plan. There is a policy in place to allocate the net defined benefit cost to the entities participating in the group plan. The allocation is based on the obligation attributable to the plan participants. The Commission has reflected its share of the defined benefit costs and related liabilities, as calculated by the actuary, in these financial statements.

The Commission accrues the cost of these retiree future benefits over the periods in which the employees earn the benefits. The accrued benefit obligations are actuarially determined by applying the projected unit credit method and reflect management’s best estimate of certain underlying assumptions. Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses are recognized immediately in other comprehensive income. The Commission determines the net interest expense on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit liability at the beginning of the annual period, taking into account any changes in the net benefit liability during the period as a result of benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in the statement of income.