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Employee Benefit and Retirement Plans | 12 Months Ended
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Apr. 30, 2020
Retirement Benefits [Abstract] |
Employee Benefit and Retirement Plans | Employee Benefit and Retirement Plans Retirement Savings Plans In fiscal 1990, the Company instituted the American Woodmark Investment Savings Stock Ownership Plan and effective January 1, 2016 the plan name was changed to the American Woodmark Corporation Retirement Savings Plan (the "Plan"). Under the Plan, all employees who are at least 18 years old and have been employed by the Company for at least six consecutive months are eligible to receive Company stock through a discretionary profit-sharing contribution and a 401(k) matching contribution based upon the employee's contribution to the Plan. Discretionary profit-sharing contributions ranging from 0-5% of net income, based on predetermined net income levels of the Company, may be made annually in the form of Company stock. The Company recognized expenses for profit-sharing contributions of $3.7 million, $3.8 million and $3.7 million in fiscal years 2020, 2019 and 2018, respectively. The Company matches 100% of an employee’s annual 401(k) contributions to the Plan up to 4% of annual compensation. Through December 31, 2018, RSI had the RSI Home Products 401K Retirement Savings Plan (the “RSI Plan”) for all non-union employees. Employees were eligible to contribute to the RSI Plan 60 days after starting employment. The Company elected to make safe harbor matching contributions of up to 4% of each participant’s eligible compensation. The Company’s safe harbor contributions vested immediately. On January 1, 2019, the Plan merged with the RSI Plan to transfer all assets of the RSI Plan into the Plan. Effective January 1, 2019, all new eligible participants will be automatically enrolled in the Plan at a contribution rate of 3% with the option of opting out. Beginning January 1, 2021, the contribution rate for the eligible participants as of January 1, 2019 and thereafter will automatically escalate by 1%. The automatic escalation will continue at the rate of 1% per calendar year, up to a contribution rate cap of 8%. Participants who transferred from the RSI Plan effective January 1, 2019 will be eligible for a profit sharing contribution as of April 30, 2020. Effective April 1, 2020, union employees are eligible to participate in the Plan. The expense for 401(k) matching contributions for both plans was $10.1 million, $9.9 million and $8.0 million, in fiscal years 2020, 2019 and 2018, respectively. Pension Benefits Prior to April 30, 2020, the Company had two defined benefit pension plans covering many of the Company’s employees hired prior to April 30, 2012. Effective April 30, 2020, these plans were merged into one plan and the plan name was changed to the American Woodmark Corporation Employee Pension Plan. The plan provides defined benefits based on years of service and final average earnings (for salaried employees) or benefit rate (for hourly employees). Effective April 30, 2012, the Company froze all future benefit accruals under the Company’s defined benefit pension plan. Included in accumulated other comprehensive loss at April 30, 2020 is $68.6 million ($51.2 million net of tax) related to net unrecognized actuarial losses that have not yet been recognized in net periodic pension benefit costs. The Company expects to recognize $1.8 million ($1.3 million net of tax) in net actuarial losses in net periodic pension benefit costs during fiscal 2021. The Company uses an April 30 measurement date for its benefit plans. The following provides a reconciliation of benefit obligations, plan assets and funded status of the Company’s non-contributory defined benefit pension plans as of April 30:
| APRIL 30
(in thousands) | 2020 |  | 2019
CHANGE IN PROJECTED BENEFIT OBLIGATION |  |  |
Projected benefit obligation at beginning of year | $ | 168,788 |  |  | $ | 163,423 |
Interest cost | 5,974 |  |  | 6,269 |
Actuarial gains | 22,293 |  |  | 4,850 |
Benefits paid | (5,871 | ) |  | (5,754 | )
Projected benefit obligation at end of year | $ | 191,184 |  |  | $ | 168,788 |
CHANGE IN PLAN ASSETS |  |  |
Fair value of plan assets at beginning of year | $ | 169,471 |  |  | $ | 156,463 |
Actual return on plan assets | 26,674 |  |  | 11,479 |
Company contributions | 469 |  |  | 7,283 |
Benefits paid | (5,871 | ) |  | (5,754 | )
Fair value of plan assets at end of year | $ | 190,743 |  |  | $ | 169,471 |
Funded status of the plans | $ | (441 | ) |  | $ | 683 |
The accumulated benefit obligation for both pension plans was $191.2 million and $168.8 million at April 30, 2020 and 2019, respectively.
| APRIL 30
(in thousands) | 2020 |  | 2019 |  | 2018
COMPONENTS OF NET PERIODIC PENSION BENEFIT COST |  |  |  |  |
Interest cost | $ | 5,974 |  |  | $ | 6,269 |  |  | $ | 5,727 |
Expected return on plan assets | (8,327 | ) |  | (8,509 | ) |  | (8,936 | )
Recognized net actuarial loss | 1,692 |  |  | 1,648 |  |  | 1,601 |
Pension benefit cost | $ | (661 | ) |  | $ | (592 | ) |  | $ | (1,608 | )
The components of net periodic pension benefit cost do not include service costs or prior service costs due to the plans being frozen. Actuarial Assumptions: The discount rate at April 30 was used to measure the year-end benefit obligations and the earnings effects for the subsequent year. Actuarial assumptions used to determine benefit obligations and earnings effects for the pension plans follow:
| FISCAL YEARS ENDED APRIL 30
| 2020 |  | 2019
WEIGHTED-AVERAGE ASSUMPTIONS TO DETERMINE BENEFIT OBLIGATIONS |  |  |
Discount rate | 3.16 % |  | 4.02 %
| FISCAL YEARS ENDED APRIL 30
| 2020 |  | 2019 |  | 2018
WEIGHTED-AVERAGE ASSUMPTIONS TO DETERMINE NET PERIODIC PENSION BENEFIT COST |  |  |  |  |
Discount rate | 4.02 % |  | 4.18 % |  | 4.12%
Expected return on plan assets | 5.0 % |  | 5.5 % |  | 6.5 %
The Company bases the discount rate on a current yield curve developed from a portfolio of high-quality fixed-income investments with maturities consistent with the projected benefit payout period. The long-term rate of return on assets is determined based on consideration of historical and forward-looking returns and the current and expected asset allocation strategy. The method used to determine the service and interest costs is known as the spot rate approach, under which individual spot rates along the yield curve that correspond with the timing of each benefit payment are used. In developing the expected long-term rate of return assumption for the assets of the defined benefit pension plans, the Company evaluated input from its third party pension plan asset managers, including their review of asset class return expectations and long-term inflation assumptions. The Company amortizes experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions, over the average remaining lifetime of employees expected to receive benefits under the plan. Contributions: The Company funds the pension plans in amounts sufficient to meet minimum funding requirements under applicable employee benefit and tax laws plus additional amounts the Company deems appropriate. The Company does not expect to contribute to its pension plans in fiscal 2021. The Company made contributions of $0.5 million and $7.3 million to its pension plans in fiscal 2020 and 2019, respectively. Estimated Future Benefit Payments: The following benefit payments are expected to be paid:
FISCAL YEAR | BENEFIT PAYMENTS (in thousands)
2021 | $ | 6,913 |
2022 | 7,263 |
2023 | 7,653 |
2024 | 8,048 |
2025 | 8,413 |
Years 2026-2030 | 47,525 |
Plan Assets: Pension assets by major category and the type of fair value measurement as of April 30, 2020 and 2019 are presented in the following tables:
FAIR VALUE MEASUREMENTS AT APRIL 30, 2020
FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT
(in thousands) | TOTAL |  | QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1) |  | SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2) |  | SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Cash Equivalents | $ | 490 |  |  | $ | 490 |  |  | $ | 0 |  |  | $ | — |
Equity Funds: |  |  |  |  |  |  |
US Equity | 37,569 |  |  | 37,569 |  |  | — |  |  | — |
International Equity | 24,578 |  |  | 24,578 |  |  | — |  |  |  |
Fixed Income Funds: |  |  |  |  |  |  |
Investment Grade Fixed Income | 128,106 |  |  | 128,106 |  |  | — |  |  | — |
Total plan assets | 190,743 |  |  | 190,743 |  |  | — |  |  | — |
FAIR VALUE MEASUREMENTS AT APRIL 30, 2019
FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT | FAIR VALUE MEASUREMENTS AT
(in thousands) | TOTAL |  | QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1) |  | SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2) |  | SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Cash Equivalents | $ | 469 |  |  | $ | 469 |  |  | — |  |  | — |
Equity Funds: |  |  |  |  |  |  |
US Equity | 31,143 |  |  | 31,143 |  |  | — |  |  | — |
International Equity | 20,553 |  |  | 20,553 |  |  |  |  |
Fixed Income Funds: |  |  |  |  |  |  | — |  |  | — |
Investment Grade Fixed Income | 117,306 |  |  | 117,306 |  |  | — |  |  | — |
Total plan assets | $ | 169,471 |  |  | $ | 169,471 |  |  | — |  |  | — |
Investment Strategy: The Company has established formal investment policies for the assets associated with its pension plans. The objectives of the investment strategies include preservation of capital and long-term growth of capital while avoiding excessive risk. Target allocation percentages are established at an asset class level by the Company’s Pension Committee. Target allocation ranges are guidelines, not limitations, and the Pension Committee may approve allocations above or below a target range. During a period of uncertainty in the equity and fixed income markets, the Pension Committee may suspend the Target Asset Allocation and manage the investment mix as it sees reasonable, prudent and in the best interest of the plans to better protect the value of the plan assets. The Company’s pension plans’ weighted-average asset allocations at April 30, 2020 and 2019, by asset category, were as follows:
| PLAN ASSET ALLOCATION
| 2020 |  | 2020 |  | 2019
APRIL 30 | TARGET |  | ACTUAL |  | ACTUAL
Equity Funds | 30.0 % |  | 33.0 % |  | 31.0 %
Fixed Income Funds | 70.0 % |  | 67.0 % |  | 69.0 %
Total | 100.0 % |  | 100.0 % |  | 100.0 %

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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