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Supplemental Executive Retirement Plan
 9 Months Ended
Oct. 27, 2012
Supplemental Executive Retirement Plan  
Supplemental Executive Retirement Plan

(12)                          Supplemental Executive Retirement Plan

 

The components of net periodic pension cost for the three and nine months ended October 27, 2012 and October 29, 2011 were as follows (in thousands):

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

Oct. 27,
2012

 

Oct. 29,
2011

 

Oct. 27,
2012

 

Oct. 29,
2011

 

Interest cost

 

$

598

 

$

662

 

$

1,794

 

$

1,978

 

Net amortization of unrecognized prior service cost

 

155

 

155

 

465

 

785

 

Net amortization of actuarial losses

 

835

 

458

 

2,505

 

1,592

 

Curtailment expense

 

—

 

—

 

—

 

1,242

 

Net periodic defined benefit pension cost

 

$

1,588

 

$

1,275

 

$

4,764

 

$

5,597

 

 

As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made, 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 $46.1 million and $38.4 million as of October 27, 2012 and January 28, 2012, 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 $0.9 million and $1.6 million in other income and expense during the three and nine months ended October 27, 2012, respectively, and unrealized losses of $0.7 million and $0.3 million in other income and expense during the three and nine months ended October 29, 2011, respectively.

 

During the nine months ended October 29, 2011, the Company recorded a SERP curtailment expense of $1.2 million before taxes related to the accelerated amortization of prior service cost resulting from the retirement of Maurice Marciano as an employee and executive officer, effective upon the expiration of his employment agreement on January 28, 2012. Mr. Marciano did not receive or earn any additional SERP-related benefits in connection with his retirement and, as of the date of his retirement, ceased vesting or accruing any additional benefits under the terms of the SERP. Mr. Marciano’s retirement resulted in a significant reduction in the total expected remaining years of future service of all SERP participants combined, resulting in the pension curtailment during the nine months ended October 29, 2011.