POSTRETIREMENT AND SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS

Princeton offers substantially all of its employees a defined contribution pension plan. Benefits are based on years of service and the age of the eligible employee. Princeton’s policy is to charge affiliates for their allocable share of contributions based on their respective salary expense. As of September 30, 2000 Princeton terminated its defined benefit pension plan. A net gain of $3,098,708 was realized for Princeton on the termination of the defined benefit pension plan, which was recorded as other admitted assets on the balance sheet.

Princeton also offers its retirees certain medical and prescription drug plan benefits. Substantially all employees who retire from Princeton with five years of service are eligible for these benefits. Princeton elected to amortize its transition obligation for retirees and fully eligible vested employees over twenty years. Princeton’s policy is to charge affiliates for their allocable share of such expenses based on their respective salary expense.

Princeton offers a supplemental executive retirement plan (SERP). The benefits are based on employee level, age, years of service and compensation. This plan was funded in 2001. At December 31, 2001, the executive retirement plan reported $2,462,614 included in accounts payable and other accrued expenses.

The components of accrued benefit costs and net periodic benefit cost for the pension, post retirement and supplemental executive retirement plans are as follows at December 31, 2001 and 2000 (amounts in thousands):