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Deferred Compensation and Retirement Plans | 12 Months Ended
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Apr. 30, 2022
Compensation And Retirement Disclosure [Abstract] |
Deferred Compensation and Retirement Plans | 6. Deferred Compensation and Retirement Plans The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions. The total benefit obligations for these plans were as follows:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Deferred compensation and pension plans |  | $ | 189,608 |  |  | $ | 178,994 |
Medical and Life Insurance plan |  |  | 5,365 |  |  |  | 6,584 |
International retirement plans |  |  | 14,395 |  |  |  | 15,633 |
Executive Capital Accumulation Plan |  |  | 166,723 |  |  |  | 163,582 |
Total benefit obligation |  |  | 376,091 |  |  |  | 364,793 |
Less: current portion of benefit obligation(1) |  |  | (18,916 | ) |  |  | (18,338 | )
Non-current benefit obligation |  | $ | 357,175 |  |  | $ | 346,455 |
(1) Current portion of benefit obligation is included in Compensation and benefits payable in the consolidated balance sheet. Deferred Compensation and Pension Plans The EWAP was established in fiscal 1994, which replaced the WAP. Certain vice presidents elected to participate in a “deferral unit” that required the participant to contribute a portion of their compensation for an eight year period, or in some cases, make an after-tax contribution, in return for defined benefit payments from the Company over a fifteen year period at retirement age of 65 or later. Participants were able to acquire additional “deferral units” every five years. Vice presidents who did not choose to roll over their WAP units into the EWAP continue to be covered under the earlier version in which participants generally vest and commence receipt of benefit payments at retirement age of 65. In June 2003, the Company amended the EWAP and WAP, so as not to allow new participants or the purchase of additional deferral units by existing participants. In conjunction with the acquisition of Hay Group, the Company acquired multiple pension and savings plans covering certain of its employees worldwide. Among these plans is a defined benefit pension plan for certain employees in the U.S. The assets of this plan are held separately from the assets of the sponsors in self-administered funds. On July 8, 2016, the Company established the LTPU Plan in order to promote the success of the Company by providing a select group of management and highly compensated employees with nonqualified supplemental retirement benefits as an additional means to attract, motivate and retain such employees. A unit award has a base value of either $25,000 or $50,000 for the purpose of determining the payment that would be made upon early termination for a partially vested unit award. The units vest 25% on each anniversary date with the unit becoming fully vested on the fourth anniversary of the grant date, subject to the participant’s continued service as of each anniversary date. Each vested unit award will pay out an annual benefit of either $12,500 or $25,000 for each of five years commencing on the seventh anniversary of the grant date. Deferred Compensation and Pension Plans The following tables reconcile the benefit obligation for the deferred compensation and pension plans:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation, beginning of year |  | $ | 205,740 |  |  | $ | 180,821 |
Service cost |  |  | 37,952 |  |  |  | 31,947 |
Interest cost |  |  | 4,028 |  |  |  | 4,035 |
Actuarial gain |  |  | (25,757 | ) |  |  | (590 | )
Administrative expenses paid |  |  | (196 | ) |  |  | (265 | )
Benefits paid from plan assets |  |  | (2,543 | ) |  |  | (2,327 | )
Benefits paid from cash |  |  | (7,626 | ) |  |  | (7,881 | )
Benefit obligation, end of year |  |  | 211,598 |  |  |  | 205,740 |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of year |  |  | 26,746 |  |  |  | 24,235 |
Actual return on plan assets |  |  | (2,113 | ) |  |  | 4,523 |
Benefits paid from plan assets |  |  | (2,543 | ) |  |  | (2,327 | )
Administrative expenses paid |  |  | (196 | ) |  |  | (265 | )
Employer contributions |  |  | 96 |  |  |  | 580 |
Fair value of plan assets, end of year |  |  | 21,990 |  |  |  | 26,746 |
Funded status and balance, end of year (1) |  | $ | (189,608 | ) |  | $ | (178,994 | )
Current liability |  | $ | 8,833 |  |  | $ | 9,074 |
Non-current liability |  |  | 180,775 |  |  |  | 169,920 |
Total liability |  | $ | 189,608 |  |  | $ | 178,994 |
Plan Assets - weighted-average asset allocation: |  |  |  |  |  |  |  |
Debt securities |  |  | 42 | % |  |  | 36 | %
Equity securities |  |  | 55 | % |  |  | 62 | %
Other |  |  | 3 | % |  |  | 2 | %
Total |  |  | 100 | % |  |  | 100 | %
(1) | The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As the COLI contracts are held in trust and are not separated from our general corporate assets, they are not included in the funded status. As of April 30, 2022 and 2021, the Company held contracts with gross CSV of $263.2 million and $241.3 million, offset by outstanding policy loans of $79.8 million and $80.0 million, respectively.
The pension obligation in fiscal 2022 increased compared to fiscal 2021 due to the ongoing accruals for the LTPU Plan for additional awards issued in fiscal 2022. Additionally, the change in mortality assumption from the MP-2020 to the MP-2021 mortality projection scale, and the actual return on plan assets being lower than the assumed return caused our funded position to deteriorate. The increase in pension benefit obligations was partially offset by the actuarial gain which was primarily due to an increase in discount rates. The fair value measurements of the defined benefit plan assets fall within the following levels of the fair value hierarchy as of April 30, 2022 and 2021:
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
|  | (in thousands) |
April 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds |  | $ | — |  |  | $ | 21,353 |  |  | $ | — |  |  | $ | 21,353 |
Money market funds |  |  | 637 |  |  |  | — |  |  |  | — |  |  |  | 637 |
Total |  | $ | 637 |  |  | $ | 21,353 |  |  | $ | — |  |  | $ | 21,990 |
April 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds |  | $ | — |  |  | $ | 26,140 |  |  | $ | — |  |  | $ | 26,140 |
Money market funds |  |  | 606 |  |  |  | — |  |  |  | — |  |  |  | 606 |
Total |  | $ | 606 |  |  | $ | 26,140 |  |  | $ | — |  |  | $ | 26,746 |
Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. The investment goal is a return on assets that is at least equal to the assumed actuarial rate of return over the long term within reasonable and prudent levels of risk. Investment policies reflect the unique circumstances of the respective plans and include requirements designed to mitigate risk including quality and diversification standards. Asset allocation targets are reviewed periodically with investment advisors to determine the appropriate investment strategies for acceptable risk levels. Our target allocation ranges are as follows: equity securities 40% to 60% and debt securities 40% to 60%. We establish our estimated long‑term return on plan assets considering various factors, including the targeted asset allocation percentages, historic returns and expected future returns. The components of net periodic benefits costs are as follows:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (in thousands) |
Service cost |  | $ | 37,952 |  |  | $ | 31,947 |  |  | $ | 24,939 |
Interest cost |  |  | 4,028 |  |  |  | 4,035 |  |  |  | 5,433 |
Amortization of actuarial loss |  |  | 2,170 |  |  |  | 4,117 |  |  |  | 3,261 |
Net prior service credit amortization |  |  | (97 | ) |  |  | (97 | ) |  |  | (24 | )
Expected return on plan assets |  |  | (1,554 | ) |  |  | (1,404 | ) |  |  | (1,452 | )
Net periodic benefit cost (1) |  | $ | 42,499 |  |  | $ | 38,598 |  |  | $ | 32,157 |
(1) | The service cost, interest cost and other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other (loss) income, net, respectively, on the consolidated statements of income.
The weighted-average assumptions used in calculating the benefit obligations were as follows:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Discount rate, beginning of year |  |  | 2.17 | % |  |  | 2.29 | % |  |  | 3.57 | %
Discount rate, end of year |  |  | 4.08 | % |  |  | 2.17 | % |  |  | 2.29 | %
Rate of compensation increase |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %
Expected long-term rates of return on plan assets |  |  | 5.50 | % |  |  | 6.00 | % |  |  | 6.00 | %
Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:
Year Ending April 30, |  | Deferred Retirement Plans |
|  | (in thousands) |
2023 |  | $ | 11,078 |
2024 |  |  | 16,216 |
2025 |  |  | 25,772 |
2026 |  |  | 34,109 |
2027 |  |  | 43,923 |
2028-2032 |  |  | 222,200 |
Medical and Life Insurance Plan In conjunction with the acquisition of Hay Group, the Company inherited a benefit plan which offers medical and life insurance coverage to 111 participants. The medical and life insurance benefit plan is closed to new entrants and is unfunded. The following table reconciles the benefit obligation for the medical and life insurance plan:
|  | Year End April 30, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation, beginning of year |  | $ | 6,584 |  |  | $ | 7,527 |
Interest cost |  |  | 110 |  |  |  | 140 |
Actuarial gain |  |  | (857 | ) |  |  | (549 | )
Benefits paid |  |  | (472 | ) |  |  | (534 | )
Benefit obligation, end of year |  | $ | 5,365 |  |  | $ | 6,584 |
Current liability |  | $ | 585 |  |  | $ | 601 |
Non-current liability |  |  | 4,780 |  |  |  | 5,983 |
Total liability |  | $ | 5,365 |  |  | $ | 6,584 |
The components of net periodic benefits costs are as follows:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (in thousands) |
Service cost |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost |  |  | 110 |  |  |  | 140 |  |  |  | 227 |
Net periodic service credit amortization |  |  | (308 | ) |  |  | (308 | ) |  |  | (308 | )
Amortization of actuarial gain |  |  | — |  |  |  | — |  |  |  | — |
Net periodic benefit cost (1) |  | $ | (198 | ) |  | $ | (168 | ) |  | $ | (81 | )
| (1) | The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other (loss) income, net, respectively, on the consolidated statements of income.
The weighted-average assumptions used in calculating the medical and life insurance plan were as follows:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
Discount rate, beginning of year |  |  | 2.54 | % |  |  | 2.45 | % |  |  | 3.67 | %
Discount rate, end of year |  |  | 4.25 | % |  |  | 2.54 | % |  |  | 2.45 | %
Healthcare care cost trend rate |  |  | 6.00 | % |  |  | 6.25 | % |  |  | 6.50 | %
Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:
Year Ending April 30, |  | Medical and Life Insurance |
|  | (in thousands) |
2023 |  | $ | 592 |
2024 |  |  | 571 |
2025 |  |  | 545 |
2026 |  |  | 519 |
2027 |  |  | 481 |
2028-2032 |  |  | 1,980 |
International Retirement Plans The Company also maintains various retirement plans and other miscellaneous deferred compensation arrangements in 25 foreign jurisdictions. The aggregate of the long-term benefit obligation accrued at April 30, 2022 and 2021 is $14.4 million for 3,568 participants and $15.6 million for 2,557 participants, respectively. The Company’s contribution to these plans was $14.8 million and $12.7 million in fiscal 2022 and 2021, respectively. Executive Capital Accumulation Plan The Company’s ECAP is intended to provide certain employees an opportunity to defer their salary and/or bonus on a pre-tax basis. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. The Company amortizes these contributions on a straight-line basis over the service period, generally a five year period. Participants have the ability to allocate their deferrals among a number of investment options and may receive their benefits at termination, retirement or ‘in service’ either in a lump sum or in quarterly installments over one-to-15 years. The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying consolidated balance sheets. The Company issued ECAP awards during fiscal 2022, 2021 and 2020 of $7.5 million, $8.2 million and $9.0 million, respectively. The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During both fiscal 2022 and 2020, the deferred compensation liability decreased; therefore, the Company recognized a reduction in compensation expense of $10.6 million and $0.8 million, respectively. Offsetting the decreases in compensation and benefits expense in fiscal 2022 and 2020 was decreases in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $12.0 million and $1.8 million in fiscal 2022 and 2020, respectively, recorded in other (loss) income, net on the consolidated statements of income. During fiscal 2021, deferred compensation liability increased; therefore, the Company recognized a compensation expense of $37.3 million. Offsetting the increase in compensation and benefits expense in fiscal 2021 was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $38.5 million in fiscal 2021, recorded in other (loss) income, net on the consolidated statement of income. Changes in ECAP liability were as follows:
|  | Year Ended April 30, |
|  | 2022 |  |  | 2021 |
|  | (in thousands) |
Balance, beginning of year |  | $ | 163,582 |  |  | $ | 129,315 |
Employee contributions |  |  | 8,541 |  |  |  | 4,935 |
Amortization of employer contributions |  |  | 7,060 |  |  |  | 6,287 |
(Loss) gain on investment |  |  | (10,602 | ) |  |  | 37,323 |
Employee distributions |  |  | (10,880 | ) |  |  | (15,652 | )
Acquisition of Lucas Group |  |  | 9,620 |  |  |  | — |
Exchange rate fluctuations |  |  | (598 | ) |  |  | 1,374 |
Balance, end of year |  |  | 166,723 |  |  |  | 163,582 |
Less: current portion |  |  | (9,498 | ) |  |  | (8,663 | )
Non-current portion |  | $ | 157,225 |  |  | $ | 154,919 |
As of April 30, 2022 and 2021, the unamortized portion of the Company contributions to the ECAP was $18.2 million and $20.2 million, respectively. Defined Contribution Plan The Company has a defined contribution plan (“401(k) plan”) for eligible employees. Participants may contribute up to 50% of their base compensation as defined in the plan agreement. In addition, the Company has the option to make matching contributions. Beginning in fiscal 2022, the Company began to match a portion of the employee contributions each pay period and made $2.1 million matching contributions during fiscal 2022. In addition the Company intends to make an additional matching contribution relating to fiscal 2022 of $3.2 million in fiscal 2023, which are accrued in compensation and benefits payable on the consolidated balance sheet. The Company made a $3.0 million matching contribution in fiscal 2022 related to contributions made by employees in fiscal 2021. Due to the impact of COVID-19, the Company did no t make a matching contribution related to fiscal 2020. Company Owned Life Insurance The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. The gross CSV of these contracts of $263.2 million and $241.3 million as of April 30, 2022 and 2021, respectively, is offset by outstanding policy loans of $79.8 million and $80.0 million in the accompanying consolidated balance sheets as of April 30, 2022 and 2021, respectively. Total death benefits payable, net of loans under COLI contracts, were $449.3 million and $443.9 million at April 30, 2022 and 2021, respectively. Management intends to use the future death benefits from these insurance contracts to fund the deferred compensation and pension arrangements; however, there may not be a direct correlation between the timing of the future cash receipts and disbursements under these arrangements. The CSV of the underlying COLI investments increased by $5.8 million, $13.0 million and $6.6 million during fiscal 2022, 2021 and 2020, respectively, recorded as a decrease in compensation and benefits expense. In addition, certain policies are held in trusts to provide additional benefit security for the deferred compensation and pension plans. As of April 30, 2022, COLI contracts with a net CSV of $162.8 million and death benefits, net of loans, of $400.6 million were held in trust for these purposes.

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