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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Jan. 30, 2022
Retirement Benefits [Abstract]  
Retirement Benefits [Text Block]

NOTE 12 – 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 $1.4 million in fiscal 2022, $1.3 million in fiscal 2021, and $1.4 million in fiscal 2020.

 

Executive Benefits

 

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 Furnishings Corporation; and

 

■

the Pulaski Furniture Corporation Supplemental Executive Retirement Plan (“SERP”) for certain former executives.

 

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)

  
   

January 30,

    

January 31,

  
   

2022

    

2021

  

Change in benefit obligation:

                

Beginning projected benefit obligation

   $ 10,572     $ 10,256  

Service cost

     133       128  

Interest cost

     178       249  

Benefits paid

     (904 )     (591 )

Actuarial (gain)/ loss

     (553 )     530  

Ending projected benefit obligation (funded status)

   $ 9,426     $ 10,572  
                 

Accumulated benefit obligation

   $ 9,277     $ 10,421  
                 

Discount rate used to value the ending benefit obligations:

     1.75 %     1.75 %
                 

Amount recognized in the consolidated balance sheets:

                

Current liabilities (Accrued salaries, wages and benefits line)

   $ 877     $ 877  

Non-current liabilities (Deferred compensation line)

     8,549       9,695  

Total

   $ 9,426     $ 10,572  

 

   

Fifty-Two Weeks Ended

  
   

January 30,

    

January 31,

    

February 2,

  
   

2022

    

2021

    

2020

  

Net periodic benefit cost

                        

Service cost

   $ 133     $ 128     $ 104  

Interest cost

     178       249       351  

Net loss

     402       338       149  

Net periodic benefit cost

   $ 713     $ 715     $ 604  
                         
                         

Other changes recognized in accumulated other comprehensive income

                  

Net (gain) / loss arising during period

     (553 )     530       716  

Amortizations:

                        

Gain (loss)

     (402 )     (338 )     (149 )

Total recognized in other comprehensive loss (income)

     (955 )     192       567  
                         

Total recognized in net periodic benefit cost and

accumulated other comprehensive income

   $ (242 )   $ 907     $ 1,171  
                         

Assumptions used to determine net periodic benefit cost:

                        

Discount rate

     1.75 %     2.50 %     3.75 %

Increase in future compensation levels

     4.00 %     4.00 %     4.00 %

 

Estimated Future Benefit Payments:

                        

Fiscal 2023

   $ 877                  

Fiscal 2024

     957                  

Fiscal 2025

     957                  

Fiscal 2026

     957                  

Fiscal 2027

     783                  

Fiscal 2028 through fiscal 2032

     4,126                  

 

For the SRIP, the discount rate used to determine the fiscal 2022 net periodic cost was 1.75%, based on the Mercer yield curve and the plan’s expected benefit payments. At January 30, 2022, 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 30, 2022, the actuarial gain related to the SRIP amounted to $553,000, net of tax of $237,000. At January 31, 2021, the actuarial losses related to the SRIP amounted to $530,000, net of tax of $338,000. The estimated actuarial gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2023 fiscal year is $83,310. There is no expected prior service (cost) or credit amortization.

 

   

SERP

(Supplemental Executive Retirement Plan)

  
   

January 30,

    

January 31,

  
   

2022

    

2021

  

Change in benefit obligation:

                

Beginning projected benefit obligation

   $ 1,681     $ 1,860  

      Service cost

     -       -  

      Interest cost

     34       46  

      Benefits paid

     (145 )     (158 )

      Actuarial (gain)/loss

     (39 )     (67 )

Ending projected benefit obligation (funded status)

   $ 1,531     $ 1,681  
                 

Accumulated benefit obligation

   $ 1,531     $ 1,681  
                 

Discount rate used to value the ending benefit obligations:

     2.10 %     2.10 %
                 

Amount recognized in the consolidated balance sheets:

                

   Current liabilities (Accrued salaries, wages and benefits line)

   $ 156     $ 156  

   Non-current liabilities (Deferred compensation line)

     1,375       1,525  

      Total

   $ 1,531     $ 1,681  

 

   

Fifty-Two Weeks Ended

  
   

January 30,

    

January 31,

    

February 2,

  
   

2022

    

2021

    

2020

  

Net periodic benefit cost

                        

   Service cost

   $ -     $ -     $ -  

   Interest cost

     34       46       67  

   Net gain

             -       (5 )

      Net periodic benefit cost

   $ 34     $ 46     $ 62  
                         
                         

Other changes recognized in accumulated other comprehensive income

  

   Net (gain)/loss arising during period

     (39 )     (67 )     168  

Amortizations:

                        

   Gain (Loss)

     -       -       5  

Total recognized in other comprehensive loss (income)

     (39 )     (67 )     173  
                         

Total recognized in net periodic benefit cost and

                        

      accumulated other comprehensive income

   $ (5 )   $ (21 )   $ 235  
                         

Assumptions used to determine net periodic benefit cost:

                        

Discount rate

     2.80 %     2.60 %     3.90 %

Increase in future compensation levels

    
N/A
      
N/A
      
N/A
  

 

Estimated Future Benefit Payments:

                        

Fiscal 2023

   $ 155                  

Fiscal 2024

     151                  

Fiscal 2025

     145                  

Fiscal 2026

     139                  

Fiscal 2027

     133                  

Fiscal 2028 through fiscal 2032

     553                  

 

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”) and the plan’s projected cash flows, rounded to the nearest 10 bps. 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 30, 2022, combining the Aon AA Above Median yield curve and the plan's expected benefit payments created a rate of 2.80%. The change in the discount rate from 2.10% to 2.80% decreased liabilities.

 

At January 30, 2022, the actuarial gain related to the SERP was $39,000. At January 31, 2021, the actuarial gain related to the SERP was $67,000.