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Defined Benefit Plans
 12 Months Ended
Jan. 29, 2022
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Defined Benefit Plans Defined Benefit Plans
The Company maintains defined benefit plans for certain employees primarily in the U.S. and Switzerland. In accordance with authoritative guidance for defined benefit pension and other postretirement plans, an asset for a plan’s over funded status or a liability for a plan’s underfunded status is recognized in the consolidated balance sheets; plan assets and obligations that determine the plan’s funded status are measured as of the end of the Company’s fiscal year; and changes in the funded status of defined benefit postretirement plans are recognized in the year in which they occur. Such changes are reported in other comprehensive income (loss) as a separate component of stockholders’ equity.
The Company’s pension obligations and related costs are calculated using actuarial concepts, within the authoritative guidance framework, and are considered Level 3 inputs as defined in Note 21. The Company uses the corridor approach to amortize unrecognized actuarial gains or losses over the average remaining service life of active participants. The life expectancy, estimated retirement age, discount rate, estimated future compensation and expected return on plan assets are important elements of expense and/or liability measurement. These critical assumptions are evaluated annually which enables expected future payments for benefits to be stated at present value on the measurement date. If actual results are not consistent with actuarial assumptions, the amounts recognized for the defined benefit plans could change significantly.
Supplemental Executive Retirement Plan
On August 23, 2005, the Board of Directors of the Company adopted a Supplemental Executive Retirement Plan (“SERP”) which became effective January 1, 2006. The SERP provides select employees who satisfy certain eligibility requirements with certain benefits upon retirement, termination of employment, death, disability or a change in control of the Company, in certain prescribed circumstances.
As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of any future payments into the insurance policies, if any, may vary depending on investment performance of the trust. The cash surrender values of the insurance policies were $70.9 million and $72.1 million as of January 29, 2022 and January 30, 2021, respectively, and were included in other assets in the Company’s consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains of $0.6 million, $6.1 million and $7.6 million in other income (expense) during fiscal 2022, fiscal 2021 and fiscal 2020, respectively.
The Company assumed a discount rate of approximately 2.8% and 2.3% for the years ended January 29, 2022 and January 30, 2021, respectively, as part of the actuarial valuation performed to calculate the projected benefit obligation, based on the timing of cash flows expected to be made in the future to the participants, applied to high quality yield curves. The Company also considers recent updates to the mortality tables and mortality improvement scale published by the Society of Actuaries in developing its best estimate of the expected mortality rates for its plan participants.
Aggregate benefits projected to be paid in the next five fiscal years are approximately $1.9 million in fiscal 2023, $1.8 million in fiscal 2024, $3.8 million in fiscal 2025, $3.7 million in fiscal 2026 and $3.7 million in fiscal 2027. Aggregate benefits projected to be paid in the five fiscal years following fiscal 2027 amount to $17.6 million.
Foreign Pension Plans
In certain foreign jurisdictions, primarily in Switzerland, the Company is required to guarantee the returns on Company sponsored defined contribution plans in accordance with local regulations. These plans are typically government-mandated defined contribution plans that provide employees with a minimum investment return, and
as such, are treated under pension accounting in accordance with authoritative guidance. The minimum investment return for our Swiss pension plan was 1.0% during calendar 2021 and calendar 2020. Under the Swiss pension plan, both the Company and certain of its employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. The Company’s contributions must be made in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender.
As of January 29, 2022 and January 30, 2021, actuarial assumptions used by the Company to calculate the projected benefit obligation and the fair value of the plans assets related to its Swiss pension plan included discount rates of 0.35% and 0.05%, respectively, and expected returns on plan assets of 0.65% and 0.50%, respectively.
The components of net periodic defined benefit pension cost to accumulated other comprehensive income (loss) related to the Company’s defined benefit plans are as follows (in thousands):
Year Ended January 29, 2022
SERPForeign Pension PlansTotal
Service cost$— $3,142 $3,142 
Interest cost1,155 74 1,229 
Expected return on plan assets— (206)(206)
Net amortization of unrecognized prior service credit— (67)(67)
Net amortization of actuarial losses81 339 420 
Net periodic defined benefit pension cost$1,236 $3,282 $4,518 
Unrecognized prior service credit charged to comprehensive income (loss)$— $(67)$(67)
Unrecognized net actuarial loss charged to comprehensive income (loss)81 339 420 
Net actuarial gains2,067 738 2,805 
Foreign currency and other adjustments— 340 340 
Related tax impact(496)(141)(637)
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss)$1,652 $1,209 $2,861 
Year Ended January 30, 2021
SERPForeign Pension PlansTotal
Service cost$— $3,155 $3,155 
Interest cost1,277 32 1,309 
Expected return on plan assets— (186)(186)
Net amortization of unrecognized prior service credit— (66)(66)
Net amortization of actuarial losses40 357 397 
Net periodic defined benefit pension cost$1,317 $3,292 $4,609 
Unrecognized prior service credit charged to comprehensive income (loss)$— $(66)$(66)
Unrecognized net actuarial loss charged to comprehensive income (loss)40 357 397 
Net actuarial losses(767)(236)(1,003)
Foreign currency and other adjustments— (383)(383)
Related tax impact168 (21)147 
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss)$(559)$(349)$(908)
Year Ended February 1, 2020
SERPForeign Pension PlansTotal
Service cost$— $3,211 $3,211 
Interest cost1,924 270 2,194 
Expected return on plan assets— (310)(310)
Net amortization of unrecognized prior service credit— (39)(39)
Net amortization of actuarial losses62 384 446 
Net periodic defined benefit pension cost$1,986 $3,516 $5,502 
Unrecognized prior service credit charged to comprehensive income (loss)$— $(39)$(39)
Unrecognized net actuarial loss charged to comprehensive income (loss)62 384 446 
Net actuarial gains (losses)449 (43)406 
Foreign currency and other adjustments— (34)(34)
Related tax impact(118)50 (68)
Total periodic defined benefit pension cost and other charges to other comprehensive income (loss) and accumulated other comprehensive income (loss)$393 $318 $711 
Included in accumulated other comprehensive income (loss), before income tax, are the following amounts that have not yet been recognized in net periodic defined benefit pension cost as follows (in thousands):
Jan 29, 2022Jan 30, 2021
SERPForeign Pension PlansTotalSERPForeign Pension PlansTotal
Unrecognized prior service credit$— $(227)$(227)$— $(161)$(161)
Unrecognized net actuarial loss4,550 4,071 8,621 6,696 5,355 12,051 
Total included in accumulated other comprehensive loss$4,550 $3,844 $8,394 $6,696 $5,194 $11,890 
The following summarizes the funded status of the Company’s defined benefit plans and the amounts recognized in the Company’s consolidated balance sheets are as follows (in thousands):
Jan 29, 2022Jan 30, 2021
SERPForeign Pension PlansTotalSERPForeign Pension PlansTotal
Projected benefit obligation$(49,431)$(42,740)$(92,171)$(52,268)$(41,461)$(93,729)
Plan assets at fair value1
— 38,015 38,015 — 35,015 35,015 
Net liability2
$(49,431)$(4,725)$(54,156)$(52,268)$(6,446)$(58,714)
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1The SERP is a non-qualified pension plan and hence the insurance policies are not considered to be plan assets. Accordingly, the table above does not include the insurance policies with cash surrender values of $70.9 million and $72.1 million as of January 29, 2022 and January 30, 2021, respectively.
2The net liability was included in accrued expenses and other long-term liabilities in the Company’s consolidated balance sheets depending on the expected timing of payments.
A reconciliation of the changes in the projected benefit obligation is as follows (in thousands):
 SERPForeign Pension PlansTotal
Balance at February 1, 2020$51,939 $34,779 $86,718 
Service cost— 3,165 3,165 
Interest cost1,277 32 1,309 
Actuarial losses767 286 1,053 
Contributions by plan participants— 3,863 3,863 
Payments(1,715)(3,421)(5,136)
Foreign currency and other adjustments— 2,757 2,757 
Balance at January 30, 2021$52,268 $41,461 $93,729 
Service cost— 3,142 3,142 
Interest cost1,155 74 1,229 
Actuarial gains(2,085)(497)(2,582)
Contributions by plan participants— 3,764 3,764 
Payments(1,907)(3,104)(5,011)
Foreign currency and other adjustments— (2,100)(2,100)
Balance at January 29, 2022$49,431 $42,740 $92,171 
The SERP is a non-qualified pension plan and hence the insurance policies are not considered to be plan assets. Accordingly, the table below does not include the insurance policies with cash surrender values of $70.9 million and $72.1 million as of January 29, 2022 and January 30, 2021, respectively. A reconciliation of the changes in plan assets for the Company’s foreign pension plans is as follows (in thousands):
 Plan Assets
Balance at February 1, 2020$28,893 
Actual return on plan assets247 
Contributions by employer3,184 
Contributions by plan participants3,863 
Payments(3,421)
Foreign currency and other adjustments2,249 
Balance at January 30, 2021$35,015 
Actual return on plan assets447 
Contributions by employer3,582 
Contributions by plan participants3,764 
Payments(3,104)
Foreign currency and other adjustments(1,689)
Balance at January 29, 2022$38,015