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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
(Dollar
amounts in thousands except per share data)
10.BENEFIT
PLANS
The
Company sponsors a non-contributory defined benefit pension plan covering substantially all salaried
and hourly employees. The plan provides retirement benefits for
employees who have attained age 21 and completed one year of service. The benefit formula for salaried and hourly
corporate employees is a final average pay benefit formula and the benefit formula for store employees is a career
pay formula.
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The Company's general funding
policy is to contribute the greater of amounts that are deductible
for federal income tax purposes or required by law. Plan assets for the pension plan consist principally of
fixed income and equity securities.
The
following sets forth the funded status and prepaid pension cost for the Company’s pension plan:
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FEBRUARY
3, 2001
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JANUARY
29, 2000
|
|
|
|
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Change in benefit obligation:
|
|
|
|
Projected benefit obligation at beginning of year
|
($34,971)
|
($32,726)
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Service cost
|
(3,471)
|
(3,236)
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|
Interest cost
|
(3,092)
|
(2,514)
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|
Actuarial (loss)/gain
|
(3,056)
|
2,926
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Benefits paid
|
839
|
579
|
|
|
|
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|
Projected benefit obligation at end of year
|
($43,751)
|
($34,971)
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|
|
|
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Change in assets:
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|
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|
Fair value at the beginning of year
|
$ 33,371
|
$ 27,792
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|
Actual return on plan assets
|
(1,684)
|
3,158
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|
Employer contributions
|
3,500
|
3,000
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|
Benefits paid
|
(839)
|
(579)
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|
|
|
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Fair value at end of year
|
$ 34,348
|
$ 33,371
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|
|
|
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|
Funded status:
|
|
|
|
Projected benefit obligation
|
($43,751)
|
($34,971)
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|
Fair value of plan assets
|
34,348
|
33,371
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|
|
|
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|
Funded status
|
(9,403)
|
(1,600)
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|
Unrecognized prior service cost
|
853
|
1,016
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Unrecognized net loss
|
8,219
|
407
|
|
|
|
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Accrued benefit cost
|
($ 331)
|
($ 177)
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The
accumulated benefit obligation at February 3, 2001 and January 29, 2000 was $37,728 and $26,576, respectively.
Net
pension cost for the fiscal years ended February 3, 2001, January 29, 2000 and January 30, 1999
included the following components:
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Y E A R E N D E D
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|
|
|
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FEBRUARY
3, 2001
|
JANUARY
29, 2000
|
JANUARY
30, 1999
|
|
|
|
|
Service cost – benefits earned during the period
|
$ 3,471
|
$ 3,236
|
$ 2,489
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Interest cost on projected benefit obligation
|
3,092
|
2,514
|
2,034
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Expected return on plan assets
|
(3,072)
|
(2,575)
|
(2,041)
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Net amortization and deferral
|
163
|
407
|
176
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|
|
|
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Net pension expense
|
$ 3,654
|
$ 3,582
|
$ 2,658
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|
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The
Company also has a non-qualified supplemental executive retirement plan ("SERP") for key executives impacted by Internal Revenue Code limits on benefits and compensation. The
plan is not funded.
The
following sets forth the liability status and accrued benefit cost for the Company’s SERP plan.
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FEBRUARY
3, 2001
|
JANUARY
29, 2000
|
|
|
|
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Change in benefit obligation:
|
|
|
|
Projected benefit obligation at beginning of year
|
($ 3,533)
|
($ 3,123)
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Service cost
|
(273)
|
(233)
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Interest cost
|
(340)
|
(243)
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Actuarial (loss)/gain
|
(725)
|
66
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|
Benefits paid
|
-
|
-
|
|
|
|
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|
Projected benefit obligation at end of year
|
($ 4,871)
|
($ 3,533)
|
|
|
|
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Funded status:
|
|
|
|
Projected benefit obligation
|
($ 4,871)
|
($ 3,533)
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|
Fair value of plan assets
|
-
|
-
|
|
|
|
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Funded status
|
(4,871)
|
(3,533)
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|
Unrecognized prior service cost
|
136
|
182
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|
Unrecognized net loss
|
1,087
|
444
|
|
|
|
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Accrued pension liability
|
($ 3,648)
|
($ 2,907)
|
|
|
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Net SERP
cost for the fiscal years ended February 3, 2001, January 29, 2000 and January 30, 1999 included the following
components:
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Y E A R E N D E D
|
|
|
|
|
|
FEBRUARY
3, 2001
|
JANUARY
29, 2000
|
JANUARY
30, 1999
|
|
|
|
|
Service cost – benefits earned during the period
|
$ 273
|
$ 233
|
$ 176
|
|
Interest cost on projected benefit obligation
|
340
|
243
|
195
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|
Net amortization and deferral
|
128
|
96
|
56
|
|
|
|
|
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|
Net SERP expense
|
$ 741
|
$ 572
|
$ 427
|
|
|
|
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The
following summarizes the assumptions used in determining both the net pension and SERP expense is as follows:
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Y E A R E N D E D
|
|
|
|
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|
FEBRUARY
3, 2001
|
JANUARY
29, 2000
|
JANUARY
30, 1999
|
|
|
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Discount rate
|
7.50%
|
6.75%
|
7.25%
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|
Discount rate used to determine present value
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|
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of projected benefit obligation
|
7.50%
|
7.50%
|
6.75%
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|
Expected long-term rate of return on plan assets
|
9.00%
|
9.00%
|
9.00%
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|
Rate of future compensation increases
|
4.50%
|
4.50%
|
4.00%
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The
Company has a qualified defined contribution 401(k) plan which covers substantially all employees. Employees make contributions to the plan, and the Company makes a
contribution that matches 50% of an employee's contribution up to a maximum of 6% of the employee's actual
compensation. Company contributions for the years ended February 3, 2001, January 29, 2000 and January 30,
1999 were $3,190, $2,569 and $2,431, respectively.
The Company provides certain medical
benefits for most retired employees. The following sets forth the funded status and accrued benefit cost for
the medical plan.
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|
FEBRUARY
3, 2001
|
JANUARY
29, 2000
|
|
|
|
|
Change in benefit obligation:
|
|
|
|
Projected benefit obligation at beginning of year
|
($2,734)
|
($2,392)
|
|
Service cost
|
(283)
|
(285)
|
|
Interest cost
|
(210)
|
(184)
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Actuarial (loss)/gain
|
173
|
98
|
|
Benefits paid
|
65
|
29
|
|
|
|
|
|
Projected benefit obligation at end of year
|
($2,989)
|
($2,734)
|
|
|
|
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|
Funded status:
|
|
|
|
Projected benefit obligation
|
($2,989)
|
($2,734)
|
|
Fair value of plan assets
|
-
|
-
|
|
|
|
|
|
Funded status
|
(2,989)
|
(2,734)
|
|
Unrecognized net loss
|
(95)
|
79
|
|
|
|
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|
Accrued postretirement liability
|
($3,084)
|
($2,655)
|
|
|
|
|
The net cost of the plan for the
fiscal years ended February 3, 2001, January 29, 2000 and January 30, 1999 included the following components:
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|
Y E A R E N D E D
|
|
|
|
|
|
FEBRUARY
3, 2001
|
JANUARY
29, 2000
|
JANUARY
30, 1999
|
|
|
|
|
Service cost – benefits earned during the period
|
$ 283
|
$ 285
|
$ 224
|
|
Interest cost on projected benefit obligation
|
210
|
184
|
156
|
|
|
|
|
|
|
Net expense
|
$ 493
|
$ 469
|
$ 380
|
|
|
|
|
|
Assumed health care cost trend rates
have a significant effect on the amounts reported for the health care plan.
A one-percentage-point change in
assumed cost escalation rate would have the following effects:
|
|
1% INCREASE
|
1% DECREASE
|
|
|
|
|
Effect on total of service and interest cost components
|
$ 56
|
$ 49
|
|
Effect on the postretirement benefit obligation
|
296
|
263
|
The weighted average discount rate
used in determining the accumulated postretirement benefit obligation was 7.50% at February 3, 2001, 7.50% at
January 29, 2000 and 6.75% at January 30, 1999. Additionally, assumed cost escalation rates that start at
8.10% and grade down gradually to 5.00% were used for the year ended February 3, 2001. Assumed cost escalation
rates that start at 6.48% and grade down gradually to 4.75% were used for the year ended January 29, 2000 and
assumed cost escalation rates that start at 7.00% and grade down gradually to 4.75% were used for the year
ended January 30, 1999.
The Company provides post employment
benefits to certain employees on short-term disability. The Company’s obligation at February 3, 2001 and
January 29, 2000 was $404 and $328, respectively.
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