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Pension Plan | 12 Months Ended
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Feb. 28, 2023
Retirement Benefits [Abstract] |
Pension Plan | (11) Benefit Plans Pension Plan The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “Pension Plan”), covering approximately 13% of aggregate employees. Benefits are based on years of service and the employee’s average compensation for the highest five compensation years preceding retirement or termination. Effective January 1, 2009, the Company amended the Pension Plan to exclude any new employees from participation in the Pension Plan. Eligible employees who were hired before January 1, 2009 are still eligible to participate and participating employees continue to accrue benefit service. The Company’s funding policy is to contribute annually an amount in accordance with the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Company’s Pension Plan asset allocation, by asset category, is as follows for the fiscal years ended:
|  | 2023 |  |  | 2022 |
Equity securities |  |  | 52 | % |  |  | 57 | %
Debt securities |  |  | 44 | % |  |  | 40 | %
Cash and cash equivalents |  |  | 4 | % |  |  | 3 | %
Total |  |  | 100 | % |  |  | 100 | %
The Company adopted a dynamic asset allocation plan ("Glide Path") which assists in optimizing the volatility of the Pension Plan's funded status over the long term. Glide Path is a schedule of planned asset allocation shifts, dependent upon changes in the Pension Plan's funded status. It is expected that the allocation to Liability Hedge Assets (Fixed Income) will increase as the funded status of the Pension Plan improves. The Company’s target asset allocation percentage, by asset class, for the year ended February 28, 2023 is as follows:
Asset Class |  | Target Allocation Percentage
Cash |  | 1 – 5%
Fixed Income |  | 44 – 64%
Equity |  | 34 – 54%
The Company estimates the long-term rate of return on Pension Plan assets will be 6.5% based upon target asset allocation. Expected returns are developed based upon the information obtained from the Company’s investment advisors. The advisors provide ten-year historical and five-year expected returns on the fund in the target asset allocation. The return information is weighted based upon the asset allocation at the end of the fiscal year. The expected rate of return at the beginning of fiscal year ended 2023 was 6.5%. The rate used in the calculation of fiscal year ended 2022 pension expense was 6.5%. The following tables present the Pension Plan’s fair value hierarchy for those assets measured at fair value as of February 28, 2023 and February 28, 2022 (in thousands):
|  | February 28, 2023 |
Description |  | Total |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Cash and cash equivalents |  | $ | 2,093 |  |  | $ | 2,093 |  |  | $ | — |  |  | $ | — |
Government bonds |  |  | 9,793 |  |  |  | — |  |  |  | 9,793 |  |  |  | — |
Corporate bonds |  |  | 15,797 |  |  |  | — |  |  |  | 15,797 |  |  |  | — |
Domestic equities |  |  | 16,833 |  |  |  | 16,833 |  |  |  | — |  |  |  | — |
Foreign equities |  |  | 4,726 |  |  |  | 4,726 |  |  |  | — |  |  |  | — |
|  | $ | 49,242 |  |  | $ | 23,652 |  |  | $ | 25,590 |  |  | $ | — |
|  | February 28, 2022 |
Description |  | Total |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Cash and cash equivalents |  | $ | 2,172 |  |  | $ | 2,172 |  |  | $ | — |  |  | $ | — |
Government bonds |  |  | 8,623 |  |  |  | — |  |  |  | 8,623 |  |  |  | — |
Corporate bonds |  |  | 14,941 |  |  |  | — |  |  |  | 14,941 |  |  |  | — |
Domestic equities |  |  | 26,582 |  |  |  | 26,582 |  |  |  | — |  |  |  | — |
Foreign equities |  |  | 6,705 |  |  |  | 6,705 |  |  |  | — |  |  |  | — |
|  | $ | 59,023 |  |  | $ | 35,459 |  |  | $ | 23,564 |  |  | $ | — |
Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset, including estimates of timing, amount of expected future cash flows, and the credit standing of the issuer. In some cases, the fair value estimates cannot be substantiated by comparison to independent markets. The disclosed fair value may not be realized in the immediate settlement of the financial asset. In addition, the disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. Pension expense is composed of the following components included in cost of goods sold and selling, general and administrative expenses in the Company’s consolidated statements of operations for fiscal years ended (in thousands):
|  | 2023 |  |  | 2022 |  |  | 2021 |
Components of net periodic benefit cost |  |  |  |  |  |  |  |  |
Service cost |  | $ | 944 |  |  | $ | 1,075 |  |  | $ | 1,271 |
Interest cost |  |  | 1,967 |  |  |  | 1,682 |  |  |  | 1,754 |
Expected return on plan assets |  |  | (3,699 | ) |  |  | (3,723 | ) |  |  | (4,074 | )
Amortization of: |  |  |  |  |  |  |  |  |
Unrecognized net loss |  |  | 2,409 |  |  |  | 2,558 |  |  |  | 3,358 |
Settlement charge |  |  | 1,273 |  |  |  | 1,097 |  |  |  | 1,619 |
Net periodic benefit cost |  |  | 2,894 |  |  |  | 2,689 |  |  |  | 3,928 |
Other changes in Plan Assets and Projected Benefit Obligation |  |  |  |  |  |  |  |  |
Recognized in Other comprehensive Income |  |  |  |  |  |  |  |  |
Net actuarial loss (gain) |  |  | (2,295 | ) |  |  | 1,396 |  |  |  | (1,588 | )
Amortization of net actuarial loss |  |  | (3,682 | ) |  |  | (3,655 | ) |  |  | (4,977 | )
|  |  | (5,977 | ) |  |  | (2,259 | ) |  |  | (6,565 | )
Total recognized in net periodic pension cost and other comprehensive income |  | $ | (3,083 | ) |  | $ | 430 |  |  | $ | (2,637 | )
The following table represents the assumptions used to determine benefit obligations and net periodic pension cost for fiscal years ended:
|  | 2023 |  |  | 2022 |  |  | 2021 |
Weighted average discount rate (net periodic pension cost) |  |  | 3.10 | % |  |  | 2.65 | % |  |  | 2.65 | %
Earnings progression (net periodic pension cost) |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | %
Expected long-term rate of return on plan assets (net periodic pension cost) |  |  | 6.50 | % |  |  | 6.50 | % |  |  | 6.50 | %
Weighted average discount rate (benefit obligations) |  |  | 5.00 | % |  |  | 3.10 | % |  |  | 2.65 | %
Earnings progression (benefit obligations) |  |  | 3.00 | % |  |  | 3.00 | % |  |  | 3.00 | %
During the fiscal year ended 2023, the Company adopted the MP-2021 improvement scale (mortality rate assumption) to determine their benefit obligations under the Pension Plan. The accumulated benefit obligation (“ABO”), change in projected benefit obligation (“PBO”), change in Pension Plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows (in thousands):
|  | 2023 |  |  | 2022 |
Change in benefit obligation |  |  |  |  |  |
Projected benefit obligation at beginning of year |  | $ | 64,752 |  |  | $ | 66,018 |
Service cost |  |  | 944 |  |  |  | 1,075 |
Interest cost |  |  | 1,967 |  |  |  | 1,682 |
Actuarial (gain) loss |  |  | (12,824 | ) |  |  | (151 | )
Other assumption change |  |  | 69 |  |  |  | 155 |
Benefits paid |  |  | (4,885 | ) |  |  | (4,148 | )
Settlement |  |  | (135 | ) |  |  | 121 |
Projected benefit obligation at end of year |  | $ | 49,888 |  |  | $ | 64,752 |
Change in plan assets: |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 59,023 |  |  | $ | 59,719 |
Company contributions |  |  | 2,000 |  |  |  | 1,000 |
Gain on plan assets |  |  | (6,896 | ) |  |  | 2,452 |
Benefits paid |  |  | (4,885 | ) |  |  | (4,148 | )
Fair value of plan assets at end of year |  | $ | 49,242 |  |  | $ | 59,023 |
Funded (unfunded) status |  | $ | (646 | ) |  | $ | (5,729 | )
Accumulated benefit obligation at end of year |  | $ | 46,904 |  |  | $ | 60,216 |
The measurement dates of actuarial valuations used to determine pension and other postretirement benefits is the Company’s fiscal year end. In the third quarter of fiscal years 2023 and 2022, lump sum distributions of $2.1 million and $1.9 million were made to plan participants and resulted in a non-cash settlement charge of $0.8 million and $0.8 million, respectively. The Company made a $2.0 million contribution to the Pension Plan during fiscal year 2023. Depending on the Pension Plan’s projected funding status, the Company expects to contribute between $1.0 million and $3.0 million to the Pension Plan during fiscal year 2024. Estimated future benefit payments which reflect expected future service, as appropriate, are expected to be paid to the Pension Plan participants in the fiscal years ended (in thousands):
Year |  | Projected Payments |
2024 |  | $ | 3,000 |
2025 |  |  | 3,000 |
2026 |  |  | 3,700 |
2027 |  |  | 3,500 |
2028 |  |  | 3,000 |
2029 – 2033 |  |  | 19,900 |
401(k) Plan Effective February 1, 1994, the Company adopted a Defined Contribution 401(k) Plan (the “401(k) Plan”) for its United States employees. The 401(k) Plan covers substantially all full-time employees who have completed sixty days of service and attained the age of eighteen. United States employees can contribute up to 100 percent of their annual compensation, but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) Plan provides for employer matching contributions or discretionary employer contributions for certain employees not enrolled in the Pension Plan for employees of the Company. Eligibility for employer contributions, matching percentage, and limitations depends on the participant’s employment location and whether the employees are covered by the Pension Plan, among other factors. The Company’s matching contributions are immediately vested. The Company made matching 401(k) contributions in the amount of $1.9 million, $2.0 million and $1.9 million in fiscal years ended 2023, 2022 and 2021, respectively.

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