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Supplemental Executive Retirement Plan
 3 Months Ended
Apr. 30, 2011
Supplemental Executive Retirement Plan  
Supplemental Executive Retirement Plan

 

(12)         Supplemental Executive Retirement Plan

 

The components of net periodic pension cost for the three months ended April 30, 2011 and May 1, 2010 were as follows (in thousands):

 

 

 

Three Months Ended

 

 

 

Apr. 30,
2011

 

May 1,
2010

 

Service cost

 

$

—

 

$

69

 

Interest cost

 

657

 

558

 

Net amortization of unrecognized prior service cost

 

388

 

436

 

Net amortization of actuarial losses

 

589

 

140

 

Curtailment expense

 

—

 

5,819

 

Net periodic defined benefit pension cost

 

$

1,634

 

$

7,022

 

 

As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has and expects to continue to make periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of future payments may vary, depending on the future years of service, future annual compensation of the participants and investment performance of the trust. The cash surrender values of the insurance policies were $34.4 million and $32.9 million as of April 30, 2011 and January 29, 2011, respectively, and were included in other assets in the Company’s condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains of $1.5 million and 1.3 million in other income and expense during the three months ended April 30, 2011 and May 1, 2010, respectively.

 

During the three months ended May 1, 2010, the Company recorded a supplemental executive retirement plan curtailment expense of $5.8 million before taxes related to the accelerated amortization of prior service cost resulting from the departure of Carlos Alberini, the Company’s former President and Chief Operating Officer. Mr. Alberini’s departure resulted in a significant reduction in the total expected remaining years of future service of all participants combined, resulting in the pension curtailment. Mr. Alberini did not receive any termination payments in connection with his departure and, as of the date of his departure, he ceased vesting or accruing any additional benefits under the terms of the SERP.

 

A reconciliation of the changes in the projected benefit obligation for the fiscal year ended January 29, 2011 and three months ended April 30, 2011 is as follows (in thousands):

 

 

 

Projected Benefit
Obligation

 

Balance at January 30, 2010

 

$

37,165

 

Service cost

 

69

 

Interest cost

 

2,177

 

Actuarial losses

 

8,361

 

Balance at January 29, 2011

 

$

47,772

 

Interest cost

 

657

 

Balance at April 30, 2011

 

$

48,429