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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Jan. 31, 2021
Retirement Benefits [Abstract] |
Retirement Benefits [Text Block] | NOTE 13 – EMPLOYEE BENEFIT PLANS Employee Savings Plans We sponsor a tax-qualified 401(k) retirement plan covering substantially all employees. This plan assists employees in meeting their savings and retirement planning goals through employee salary deferrals and discretionary employer matching contributions. Our contributions to the plan amounted to $1.3 million in fiscal 2021, $1.4 million in fiscal 2020, and $1.3 million in fiscal 2019. We adopted ASU 2017-07 as of the beginning of our 2019 fiscal year on January 29, 2018. Components of net periodic benefit cost other than the service cost for the SRIP, SERP and the Pension Plan are included in the line item “Other income, net” in our consolidated statements of operations. Service cost is included in our consolidated statements of operations under “Selling and administrative expenses.” The adoption resulted in the reclassification of a $30,000 gain from Selling and administrative expenses to Other income, net in fiscal 2018 consolidated statements of operations. Executive Benefits Pension, SRIP and SERP Overview We maintain two “frozen” retirement plans, which are paying benefits and may include active employees among the participants but we do not expect to add participants to these plans in the future. The two plans include:
| ■ | a supplemental retirement income plan (“SRIP”) for certain former and current executives of Hooker Furniture Corporation; and
| ■ | the Pulaski Furniture Corporation Supplemental Executive Retirement Plan (“SERP”) for certain former executives.
In January 2019, we terminated the Pulaski Furniture Corporation Pension Plan (“Pension Plan”) settled all the obligations in fiscal 2020 which was also frozen and had been frozen since we acquired it in the Home Meridian acquisition. SRIP and SERP The SRIP provides monthly payments to participants or their designated beneficiaries based on a participant’s “final average monthly earnings” and “specified percentage” participation level as defined in the plan, subject to a vesting schedule that may vary for each participant. The benefit is payable for a 15-year period following the participant’s termination of employment due to retirement, disability or death. In addition, the monthly retirement benefit for each participant, regardless of age, becomes fully vested and the present value of that benefit is paid to each participant in a lump sum upon a change in control of the Company as defined in the plan. The SRIP is unfunded and all benefits are payable solely from our general assets. The plan liability is based on the aggregate actuarial present value of the vested benefits to which participating employees are currently entitled but based on the employees’ expected dates of separation or retirement. No employees have been added to the plan since 2008 and we do not expect to add additional employees in the future, due to changes in our compensation philosophy, which emphasizes more performance-based compensation measures in total management compensation. The SERP provides monthly payments to eight retirees or their designated beneficiaries based on a defined benefit formula as defined in the plan. The benefit is payable for the life of the retiree with the following forms available as a reduced monthly benefit: Ten-year Certain and Life; 50% or 100% Joint and Survivor Annuity. The SERP is unfunded and all benefits are payable solely from our general assets. The plan liability is based on the aggregate actuarial present value of the benefits to which retired employees are currently entitled. No employees have been added to the plan since 2006 and we do not expect to add additional employees in the future. Summarized SRIP and SERP information as of each fiscal year-end (the measurement date) is as follows:
|  | SRIP (Supplemental Retirement Income Plan) |
|  | Fifty-Two |  |  | Fifty-Two |  |  |  |
|  | Weeks Ended |  |  | Weeks Ended |  |  |  |  |
|  | January 31, |  |  | February 2, |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  |  |
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |  |
Beginning projected benefit obligation |  | $ | 10,256 |  |  | $ | 9,622 |  |  |  |  |
Service cost |  |  | 128 |  |  |  | 104 |  |  |  |  |
Interest cost |  |  | 249 |  |  |  | 351 |  |  |  |  |
Benefits paid |  |  | (591 | ) |  |  | (537 | ) |  |  |  |
Actuarial loss |  |  | 530 |  |  |  | 716 |  |  |  |  |
Ending projected benefit obligation (funded status) |  | $ | 10,572 |  |  | $ | 10,256 |  |  |  |  |
Accumulated benefit obligation |  | $ | 10,421 |  |  | $ | 10,131 |  |  |  |  |
Discount rate used to value the ending benefit obligations: |  |  | 1.75 | % |  |  | 2.50 | % |  |  |  |
Amount recognized in the consolidated balance sheets: |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities (Accrued salaries, wages and benefits line) |  | $ | 877 |  |  | $ | 557 |  |  |  |  |
Non-current liabilities (Deferred compensation line) |  |  | 9,695 |  |  |  | 9,699 |  |  |  |  |
Total |  | $ | 10,572 |  |  | $ | 10,256 |  |  |  |  |
|  | Fifty-Two |  |  | Fifty-Two |  |  | Fifty-Three |
|  | Weeks Ended |  |  | Weeks Ended |  |  | Weeks Ended |
|  | January 31, |  |  | February 2, |  |  | February 3, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 128 |  |  | $ | 104 |  |  | $ | 326 |
Interest cost |  |  | 249 |  |  |  | 351 |  |  |  | 341 |
Net loss |  |  | 338 |  |  |  | 149 |  |  |  | 172 |
Net periodic benefit cost |  | $ | 715 |  |  | $ | 604 |  |  | $ | 839 |
Other changes recognized in accumulated other comprehensive income |  |  |  |  |  |  |  |  |
Net loss arising during period |  |  | 530 |  |  |  | 716 |  |  |  | 101 |
Amortizations: |  |  |  |  |  |  |  |  |  |  |  |
Loss |  |  | (338 | ) |  |  | (149 | ) |  |  | (172 | )
Total recognized in other comprehensive loss (income) |  |  | 192 |  |  |  | 567 |  |  |  | (71 | )
Total recognized in net periodic benefit cost and accumulated other comprehensive income |  | $ | 907 |  |  | $ | 1,171 |  |  | $ | 768 |
Assumptions used to determine net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 2.50 | % |  |  | 3.75 | % |  |  | 3.75 | %
Increase in future compensation levels |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 4.00 | %
Estimated Future Benefit Payments: |  |  |  |  |  |  |  |  |  |  |  |
Fiscal 2022 |  | $ | 877 |  |  |  |  |  |  |  |  |
Fiscal 2023 |  |  | 877 |  |  |  |  |  |  |  |  |
Fiscal 2024 |  |  | 958 |  |  |  |  |  |  |  |  |
Fiscal 2025 |  |  | 958 |  |  |  |  |  |  |  |  |
Fiscal 2026 |  |  | 958 |  |  |  |  |  |  |  |  |
Fiscal 2027 through fiscal 2031 |  |  | 4,066 |  |  |  |  |  |  |  |  |
For the SRIP, the discount rate used to determine the fiscal 2021 net periodic cost was 2.5%, based on the Mercer yield curve and the plan’s expected benefit payments. At January 31, 2021, combining the Mercer yield curve and the plan's expected benefit payments resulted in a rate of 1.75%. This rate was used to value the ending benefit obligations. At January 31, 2021, the actuarial losses related to the SRIP amounted to $530,000, net of tax of $338,000. At February 2, 2020, the actuarial losses related to the SRIP amounted to $716,000, net of tax of $149,000. The estimated actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2022 fiscal year is $401,622. There is no expected prior service (cost) or credit amortization.
|  | SERP (Supplemental Executive Retirement Plan) |  |  |  |  |
|  | Fifty-Two |  |  | Fifty-Two |  |  |  |  |
|  | Weeks Ended |  |  | Weeks Ended |  |  |  |  |
|  | January 31, |  |  | February 2, |  |  |  |  |
|  | 2021 |  |  | 2020 |  |  |  |  |
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |  |
Beginning projected benefit obligation |  | $ | 1,860 |  |  | $ | 1,805 |  |  |  |  |
Service cost |  |  | - |  |  |  | - |  |  |  |  |
Interest cost |  |  | 46 |  |  |  | 67 |  |  |  |  |
Benefits paid |  |  | (158 | ) |  |  | (180 | ) |  |  |  |
Actuarial (gain)/loss |  |  | (67 | ) |  |  | 168 |  |  |  |  |
Ending projected benefit obligation (funded status) |  | $ | 1,681 |  |  | $ | 1,860 |  |  |  |  |
Accumulated benefit obligation |  | $ | 1,681 |  |  | $ | 1,860 |  |  |  |  |
Discount rate used to value the ending benefit obligations: |  |  | 2.10 | % |  |  | 2.60 | % |  |  |  |
Amount recognized in the consolidated balance sheets: |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities (Accrued salaries, wages and benefits line) |  | $ | 156 |  |  | $ | 172 |  |  |  |  |
Non-current liabilities (Deferred compensation line) |  |  | 1,525 |  |  |  | 1,688 |  |  |  |  |
Total |  | $ | 1,681 |  |  | $ | 1,860 |  |  |  |  |
|  | Fifty-Two |  |  | Fifty-Two |  |  | Fifty-Three |
|  | Weeks Ended |  |  | Weeks Ended |  |  | Weeks Ended |
|  | January 31, |  |  | February 2, |  |  | February 3, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
Net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | - |  |  | $ | - |  |  | $ | - |
Interest cost |  |  | 46 |  |  |  | 67 |  |  |  | 70 |
Net gain |  |  | - |  |  |  | (5 | ) |  |  | - |
Net periodic benefit cost |  | $ | 46 |  |  | $ | 62 |  |  | $ | 70 |
Other changes recognized in accumulated other comprehensive income |
Net (gain)/loss arising during period |  |  | (67 | ) |  |  | 168 |  |  |  | (88 | )
Amortizations: |  |  |  |  |  |  |  |  |  |  |  |
Gain (Loss) |  |  | - |  |  |  | 5 |  |  |  | - |
Total recognized in other comprehensive loss (income) |  |  | (67 | ) |  |  | 173 |  |  |  | (88 | )
Total recognized in net periodic benefit cost and |  |  |  |  |  |  |  |  |  |  |  |
accumulated other comprehensive income |  | $ | (21 | ) |  | $ | 235 |  |  | $ | (18 | )
Assumptions used to determine net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 2.60 | % |  |  | 3.90 | % |  |  | 3.64 | %
Increase in future compensation levels |  |  | N/A |  |  |  | N/A |  |  |  | N/A |
Estimated Future Benefit Payments: |  |  |  |  |  |  |  |  |  |  |  |
Fiscal 2022 |  | $ | 156 |  |  |  |  |  |  |  |  |
Fiscal 2023 |  |  | 151 |  |  |  |  |  |  |  |  |
Fiscal 2024 |  |  | 146 |  |  |  |  |  |  |  |  |
Fiscal 2025 |  |  | 141 |  |  |  |  |  |  |  |  |
Fiscal 2026 |  |  | 135 |  |  |  |  |  |  |  |  |
Fiscal 2027 through fiscal 2031 |  |  | 573 |  |  |  |  |  |  |  |  |
For the SERP, the discount rate assumption used to measure the projected benefit obligations is set by reference to a certain hypothetical AA-rated corporate bond spot-rate yield curve constructed by our actuary, Aon (“Aon”). This yield curve was constructed from the underlying bond price and yield data collected as of the Plan’s measurement date and is represented by a series of annualized, individual discount rates with durations ranging from six months to seventy-five years. Aon then applies the spot rates of the yield curve to the actuarially projected cash flow patterns to derive the appropriate single effective discount rate. At February 2, 2020, the plan used 2.60% based on rounding the Aon AA Above Median yield curve as of January 31, 2019. This rate was used to determine the fiscal 2021 net periodic cost. At January 31, 2021, combining the Aon AA Above Median yield curve and the plan's expected benefit payments created a rate of 2.10%. This rate was used to value the ending benefit obligations. At January 31, 2021, the actuarial gain related to the SERP was $67,000. At February 2, 2020, the actuarial loss related to the SERP was $168,000. The estimated net transition (asset)/obligation, prior service (cost) credit and actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over fiscal 2020 are immaterial. The Pension Plan On January 30, 2019, our Board of Directors voted to terminate the Pension Plan. We settled all Pension Plan obligations during the third quarter of fiscal 2020 with the purchase of nonparticipating annuity contracts for plan participants. Summarized Pension Plan information as of February 2, 2020 is as follows:
Pulaski Furniture Pension Plan |  |  |  |  |
|  | Fifty-Two |  |  |  |
|  | Weeks Ended |  |  |  |  |
|  | February 2, |  |  |  |  |
|  | 2020 |  |  |  |  |
Change in benefit obligation: |  |  |  |  |  |  |  |
Beginning projected benefit obligation |  | $ | 10,906 |  |  |  |  |
Acquisition |  |  |  |  |  |  |  |
Service cost |  |  | - |  |  |  |  |
Interest cost |  |  | 303 |  |  |  |  |
Benefits paid |  |  | (522 | ) |  |  |  |
Settlement |  |  | (12,557 | ) |  |  |  |
Actuarial loss |  |  | 1,870 |  |  |  |  |
Ending projected benefit obligation |  | $ | - |  |  |  |  |
Change in Plan Assets: |  |  |  |  |  |  |  |
Beginning fair value of plan assets |  | $ | 10,992 |  |  |  |  |
Actual return on plan assets |  |  | 1,960 |  |  |  |  |
Employer contributions |  |  | 344 |  |  |  |  |
Actual expenses paid |  |  | (217 | ) |  |  |  |
Settlement |  |  | (12,557 | ) |  |  |  |
Actual benefits paid |  |  | (522 | ) |  |  |  |
Ending fair value of plan assets |  | $ | - |  |  |  |  |
Funded Status of the Plan |  | $ | - |  |  |  |  |
Discount rate used to value the ending benefit obligations: |  |  | N/A |  |  |  |  |
Amount recognized in the consolidated balance sheets: |  |  |  |  |  |  |  |
Current liabilities (Accrued salaries, wages and benefits line) |  | $ | - |  |  |  |  |
Non-current liabilities (Deferred compensation line) |  |  | - |  |  |  |  |
Net Asset/(Liability) |  | $ | - |  |  |  |  |
|  | Fifty-Two |  |  | Fifty-Three |
|  | Weeks Ended |  |  | Weeks Ended |
|  | February 2, |  |  | February 3, |
|  | 2020 |  |  | 2019 |
Net periodic benefit cost |  |  |  |  |  |  |  |
Expected administrative expenses |  | $ | 105 |  |  | $ | 280 |
Interest cost |  |  | 303 |  |  |  | 415 |
Net gain |  |  | (305 | ) |  |  | (575 | )
Net periodic benefit cost |  | $ | 103 |  |  | $ | 120 |
Settlement/Curtailment Income |  |  | (193 | ) |  |  |  |
Total net periodic benefit cost (Income) |  | $ | (90 | ) |  | $ | 120 |
Other changes recognized in other comprehensive income |  |  |  |  |  |  |  |
Net (gain) loss arising during period |  |  | 327 |  |  |  | 464 |
Amortization: |  |  |  |  |  |  |  |
Gain |  |  | 193 |  |  |  | - |
Total recognized in other comprehensive (income) loss |  |  | 520 |  |  |  | 464 |
Total recognized in net periodic benefit cost and accumulated other comprehensive income |  | $ | 430 |  |  | $ | 584 |
Assumptions used to determine net periodic benefit cost: |  |  |  |  |  |  |  |
Discount rate |  |  | 3.8 | % |  |  | 3.82 | %
Increase in future compensation levels |  |  | N/A |  |  |  | N/A |

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