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Retirement plans | 12 Months Ended
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Jan. 28, 2023
Retirement Benefits [Abstract] |
Retirement plans | Retirement plans Signet operates a defined benefit pension plan in the UK (the “UK Plan”) which ceased to admit new employees effective April 2004. The UK Plan provides benefits to participating eligible employees. Beginning in Fiscal 2014, a change to the benefit structure was implemented and members’ benefits that accumulate after that date are now based upon career average salaries, whereas previously, all benefits were based on salaries at retirement. In September 2017, the Company approved an amendment to freeze benefit accruals under the UK Plan in an effort to reduce anticipated future pension expense. As a result of this amendment, the Company froze the pension plan for all participants with an effective date of October 2019 as elected by the plan participants. All future benefit accruals under the plan have thus ceased as of this date. The amendment to the plan was accounted for in accordance with ASC 715, “Compensation - Retirement Benefits.” On July 29, 2021, Signet Group Limited (“SGL”), a wholly-owned subsidiary of the Company, entered into an agreement (the “Agreement”) with Signet Pension Trustee Limited (the “Trustee”), as trustee of the Signet Group Pension Scheme (the “Pension Scheme”), to facilitate the Trustee entering into a bulk purchase annuity policy ("BPA") securing accrued liabilities under the Pension Scheme with Rothesay Life Plc ("Rothesay") and subsequently, to wind up the Pension Scheme. The BPA will be held by the Trustee as an asset of the Scheme (the "buy-in") in anticipation of Rothesay subsequently (and in accordance with the terms of the BPA) issuing individual annuity contracts to each of the 1,909 Pension Scheme members (or their eligible beneficiaries) ("Transferred Participants") covering their accrued benefits (a full “buy-out”), following which the BPA will terminate and the Trustee will wind up the Pension Scheme (collectively, the “Transactions”). Under the terms of the Agreement, SGL has contributed £15.0 million to date (approximately $20.1 million) to the Pension Scheme to enable the Trustee to pay for any and all costs incurred by the Trustee as part of the Transactions. The initial contribution of £7.0 million (approximately $9.7 million) was paid on August 4, 2021, and the Trustee transferred substantially all Plan assets into the BPA on August 9, 2021. SGL contributed additional amounts of £7.0 million (approximately $9.2 million) and £1.0 million (approximately $1.2 million) to the Pension Scheme on March 23, 2022 and January 6, 2023, respectively, to facilitate the Trustee funding the balancing premium to Rothesay. From the point of buy-out, Rothesay shall be liable to pay the insured benefits to the Transferred Participants and shall be responsible for the administration of those benefits. Once all Pension Scheme members (or their eligible beneficiaries) have become Transferred Participants, the Trustee will wind up the Pension Scheme. By irrevocably transferring these obligations to Rothesay, the Company will eliminate its projected benefit obligation under the Pension Scheme. On August 9, 2021, in connection with the transfer of assets into the BPA as noted above, the Company performed a remeasurement of the Pension Scheme based on the terms of the BPA which resulted in a pre-tax actuarial loss of £53.3 million (approximately $72.9 million) recorded within the consolidated statements of comprehensive income (loss). On April 22, 2022, the Trustee entered into a Deed Poll agreement with Rothesay and a Deed of Assignment with SGL to facilitate the assignment of individual policies for a significant portion of the Transferred Participants (“Assigned Participants”). The Deed Poll and Deed of Assignment, collectively, irrevocably relieve SGL and the Trustee of its obligations under the policies to the Assigned Participants. In addition, during the first quarter of Fiscal 2023, certain Transferred Participants elected to take a voluntary wind-up lump sum distribution and thus no further liability exists for this group. In the first quarter of Fiscal 2023, as a result of the Deed Poll and Deed of Assignment, as well as the voluntary lump sum distributions, the Company has determined that a transfer of all remaining risks has occurred with respect to these groups of participants. Thus, management concluded that the Company triggered settlement accounting and performed a remeasurement of the Pension Scheme, which resulted in a non-cash, pre-tax settlement charge of $131.9 million recorded within other non-operating expense, net within the consolidated statement of operations during the first quarter of Fiscal 2023. The Company recorded additional non-cash, pre-tax settlement charges in the second quarter and fourth quarter of Fiscal 2023 in the amounts of $0.9 million and $0.9 million, respectively, within other non-operating expense, net within the consolidated statement of operations. These charges were the result of additional transfers of all remaining risks with respect to certain groups of participants from the Pension Scheme, which triggered settlement accounting. The settlement charges recorded in Fiscal 2023 relate to the pro-rata recognition of previously unrecognized actuarial losses and prior service costs out of AOCI and into earnings associated with the Assigned Participants, as well as the voluntary lump sum distributions noted above. The Company finalized the buy-out of the BPA and settlement of the remaining obligations under the Pension Scheme during the first quarter of Fiscal 2024. The net periodic pension cost of the UK Plan is measured on an actuarial basis using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and the expected long-term rate of return on plan assets. Other material assumptions include rates of participant mortality, the expected long-term rate of compensation and pension increases, and rates of employee attrition. Gains and losses occur when actual experience differs from actuarial assumptions. If such gains or losses exceed 10% of the greater of plan assets or plan liabilities, Signet amortizes those gains or losses over the average remaining service period of the employees. The service cost component of net periodic pension cost is charged to selling, general and administrative expenses while non-service, interest and other costs components are charged to other non-operating income, net, in the consolidated statements of operations. Prior to entering into the BPA, the UK Plan was funded with assets held in a separate trustee administered fund, which was independently managed. All funds transferred to Rothesay in Fiscal 2022. Signet used January 28, 2023 and January 29, 2022 measurement dates in determining the UK Plan’s benefit obligation and fair value of plan assets. The following tables provide information concerning the UK Plan as of and for the fiscal years ended January 28, 2023 and January 29, 2022:
(in millions) | Fiscal 2023 |  | Fiscal 2022
Change in UK Plan assets: |  |  |
Fair value at beginning of year | $ | 295.6 |  |  | $ | 299.2 |
Actual return on UK Plan assets | (28.4) |  |  | (0.3) |
Employer contributions | 10.4 |  |  | 12.4 |
Benefits paid | (2.7) |  |  | (8.9) |
Plan settlements | (260.0) |  |  | — |
Foreign currency translation | (12.2) |  |  | (6.8) |
Fair value at end of year | $ | 2.7 |  |  | $ | 295.6 |
(in millions) | Fiscal 2023 |  | Fiscal 2022
Change in benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 303.3 |  |  | $ | 247.6 |
Interest cost | 1.0 |  |  | 3.3 |
Actuarial (gain) loss | (29.5) |  |  | 67.4 |
Benefits paid | (2.7) |  |  | (8.9) |
Plan settlements | (260.0) |  |  | — |
Foreign currency translation | (10.5) |  |  | (6.1) |
Benefit obligation at end of year | $ | 1.6 |  |  | $ | 303.3 |
Funded status at end of year | $ | 1.1 |  |  | $ | (7.7) |
(in millions) | January 28, 2023 |  | January 29, 2022
Amounts recognized in the consolidated balance sheets consist of: |  |  |
Other assets (non-current) | $ | 1.1 |  |  | $ | — |
Other liabilities (non-current) | — |  |  | (7.7) |
Items in AOCI not yet recognized in net income in the consolidated statements of operations:
(in millions) | January 28, 2023 |  | January 29, 2022 |  | January 30, 2021
Net actuarial gains (losses) | $ | 3.9 |  |  | $ | (103.3) |  |  | $ | (47.2) |
Net prior service costs | — |  |  | (3.9) |  |  | (4.0) |
The remaining net actuarial gains for the UK Plan will be fully recognized in the first quarter of Fiscal 2024 based on the completion of the buy-out described above. The accumulated benefit obligation for the UK Plan was $1.6 million and $303.3 million as of January 28, 2023 and January 29, 2022, respectively. The components of pre-tax net periodic pension benefit cost and other amounts recognized in OCI for the UK Plan are as follows:
(in millions) | Fiscal 2023 |  | Fiscal 2022 |  | Fiscal 2021
Components of net periodic benefit (cost) income: |  |  |  |  |
Interest cost | $ | (1.0) |  |  | $ | (3.3) |  |  | $ | (4.0) |
Expected return on UK Plan assets | (0.3) |  |  | 3.0 |  |  | 5.5 |
Amortization of unrecognized actuarial losses | (3.5) |  |  | (2.1) |  |  | (0.9) |
Amortization of unrecognized net prior service costs | (0.3) |  |  | (0.1) |  |  | (0.1) |
Pension settlement loss | (133.7) |  |  | — |  |  | — |
Total net periodic benefit (cost) income | $ | (138.8) |  |  | $ | (2.5) |  |  | $ | 0.5 |
Other changes in assets and benefit obligations recognized in OCI | 137.0 |  |  | (69.2) |  |  | 6.5 |
Total recognized in net periodic pension benefit (cost) income and OCI | $ | (1.8) |  |  | $ | (71.7) |  |  | $ | 7.0 |
| January 28, 2023 |  | January 29, 2022
Assumptions used to determine benefit obligations (at the end of the year): |  |  |
Discount rate | N/A |  | 1.25 | %
Salary increases | N/A |  | N/A
Assumptions used to determine net periodic pension costs (at the start of the year): |  |  |
Discount rate | N/A |  | 0.80 | %
Expected return on UK Plan assets | N/A |  | 0.80 | %
Salary increases | N/A |  | N/A
Prior to the buy-in of the BPA, the discount rate was based upon published rates for high-quality fixed-income investments that produce expected cash flows that approximate the timing and amount of expected future benefit payments. The expected return on the UK Plan assets assumption was based upon the historical return and future expected returns for each asset class, as well as the target asset allocation of the portfolio of UK Plan assets. After the buy-in for the BPA, the discount rate and expected return on assets are now aligned based on the implied rates of the liability by the insurer. Prior to the buy-in of the BPA, the UK Plan’s investment strategy was guided by an objective of achieving a return on the investments, which is consistent with the long-term return assumptions and funding policy, to ensure the UK Plan obligations were met. The investment policy was to allocate funds to a diverse portfolio of investments, including UK and global equities, diversified growth funds, corporate bonds, fixed income investments and commercial property. The commercial property investment was through a Pooled Pensions Property Fund that provided a diversified portfolio of property assets. As substantially all Plan assets have now been transferred to the BPA, there is no longer a long-term target allocation strategy for investments. The fair value of the assets in the UK Plan at January 28, 2023 and January 29, 2022 are required to be classified and disclosed in one of the following three categories: Level 1—quoted market prices in active markets for identical assets and liabilities Level 2—observable market based inputs or unobservable inputs that are corroborated by market data Level 3—unobservable inputs that are not corroborated by market data Signet measures the value of the assets on an instrument-specific basis are detailed below:
| As of January 28, 2023 |  | As of January 29, 2022
(in millions) | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Investments measured at fair value: |  |  |  |  |  |  |  |  |  |  |
Insurance contracts | $ | 1.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 1.6 |  |  | $ | 291.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 291.6 |
Cash | 1.1 |  |  | 1.1 |  |  | — |  |  | — |  |  | 4.0 |  |  | 4.0 |  |  | — |  |  | — |
Total assets | $ | 2.7 |  |  | $ | 1.1 |  |  | $ | — |  |  | $ | 1.6 |  |  | $ | 295.6 |  |  | $ | 4.0 |  |  | $ | — |  |  | $ | 291.6 |
The following represents a summary of changes in fair value of UK Plan assets classified as Level 3:
(in millions) | Fiscal 2023 |  | Fiscal 2022
Beginning of year balance | $ | 291.6 |  |  | $ | — |
Purchases, sales, and settlements, net | (262.7) |  |  | 318.3 |
Actual return on assets, assets still held at reporting date | (16.1) |  |  | (16.8) |
Foreign currency translation | (11.2) |  |  | (9.9) |
End of year balance | $ | 1.6 |  |  | $ | 291.6 |
The BPA is considered a Level 3 asset as the value of the asset is based on the implied value of the liability as determined based on the underlying employee data and actuarial assumptions described above, which are all significant unobservable inputs. Signet contributed $10.4 million to the UK Plan in Fiscal 2023 and expects to contribute up to $1.0 million to the UK Plan in Fiscal 2024, subject to the level of remaining funding required for the completion of the Transactions described above, including the wind-up of the Pension Scheme. The following benefit payments are currently estimated to be paid by the UK Plan:
(in millions) | Expected benefit payments
Fiscal 2024 | $ | 0.6 |
Fiscal 2025 | — |
Fiscal 2026 | — |
Fiscal 2027 | — |
Fiscal 2028 | — |
Next five fiscal years | $ | — |
Other retirement plans In June 2004, Signet introduced a defined contribution plan which replaced the UK Plan for new UK employees. The contributions to this plan in Fiscal 2023 were $2.5 million (Fiscal 2022: $2.4 million; Fiscal 2021: $2.4 million). In the US, Signet operates a defined contribution 401(k) retirement savings plan for all eligible employees who meet minimum age and service requirements. The assets of this plan are held in a separate trust and Signet matches 50% of up to 6% of employee elective salary deferrals, subject to statutory limitations. Signet’s contributions to this plan in Fiscal 2023 were $12.6 million (Fiscal 2022: $13.0 million; Fiscal 2021: $3.2 million). The Company has also established two unfunded, non-qualified deferred compensation plans (“DCP”), one of which permits certain management and highly compensated employees to elect annually to defer all or a portion of their compensation and are credited earnings or losses on the deferred amounts under the terms of the plan and the other of which is frozen as to new participants and new deferrals. Beginning in April 2011, the DCP provided for a matching contribution based on each participant’s annual compensation deferral. The plan also permits employer contributions on a discretionary basis. The cost recognized in connection with the DCP in Fiscal 2023 was $1.7 million (Fiscal 2022: $2.2 million; Fiscal 2021: $0.8 million). The matching contributions, for both the Signet 401(k) and DCP, were temporarily suspended during the first quarter of Fiscal 2021. The matching contributions resumed effective January 1, 2021. Although the two unfunded, non-qualified deferred compensation plans are not required to be funded by the Company, the Company has elected to fund the plans by investing in trust-owned life insurance policies and mutual funds. The value and classification of these assets are as follows:
| As of January 28, 2023 |  | As of January 29, 2022
(in millions) | Total |  | Level 1 |  |  |  | Total |  | Level 1 |  |
Investments measured at fair value: |  |  |  |  |  |  |  |  |  |  |
Mutual funds | $ | 16.6 |  |  | $ | 16.6 |  |  |  |  | $ | 12.4 |  |  | $ | 12.4 |  |  |
Investments measured at NAV: |  |  |  |  |  |  |  |  |  |  |
Money market mutual funds | 5.7 |  |  |  |  |  |  | 10.3 |  |  |  |  |
Total assets | $ | 22.3 |  |  | $ | 16.6 |  |  |  |  | $ | 22.7 |  |  | $ | 12.4 |  |  |
The Company also has company-owned life insurance policies held for purposes of funding the DCP totaling $5.5 million and $6.0 million as of January 28, 2023 and January 29, 2022, respectively. As of January 28, 2023 and January 29, 2022, the total liability recorded by the Company for the DCP was $33.9 million and $32.4 million, respectively.

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