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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Jan. 29, 2023
Retirement Benefits [Abstract]  
Retirement Benefits [Text Block]

NOTE 14 – 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 $1.5 million in fiscal 2023, $1.4 million in fiscal 2022, and $1.3 million in fiscal 2021.

 

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 29,

    

January 30,

  
   

2023

    

2022

  

Change in benefit obligation:

                

Beginning projected benefit obligation

   $ 9,426     $ 10,572  

      Service cost

     126       133  

      Interest cost

     243       178  

      Benefits paid

     (815 )     (904 )

      Actuarial (gain)/ loss

     (1,004 )     (553 )

Ending projected benefit obligation (funded status)

   $ 7,976     $ 9,426  
                 

Accumulated benefit obligation

   $ 7,783     $ 9,277  
                 

Discount rate used to value the ending benefit obligations:

     4.85 %     2.70 %
                 

Amount recognized in the consolidated balance sheets:

                

   Current liabilities (Accrued salaries, wages and benefits line)

   $ 877     $ 877  

   Non-current liabilities (Deferred compensation line)

     7,099       8,549  

      Total

   $ 7,976     $ 9,426  

 

   

Fifty-Two Weeks Ended

  
   

January 29,

    

January 30,

    

January 31,

  
   

2023

    

2022

    

2021

  

Net periodic benefit cost

                        

   Service cost

   $ 126     $ 133     $ 128  

   Interest cost

     243       178       249  

   Net loss

     83       402       338  

      Net periodic benefit cost

   $ 452     $ 713     $ 715  
                         
                         

Other changes recognized in accumulated other comprehensive income

                        

   Net (gain) / loss arising during period

     (1,004 )     (553 )     530  

Amortizations:

                        

  Gain (loss)

     (83 )     (402 )     (338 )

Total recognized in other comprehensive loss (income)

     (1,087 )     (955 )     192  
                         

Total recognized in net periodic benefit cost and accumulated other comprehensive income

   $ (635 )   $ (242 )   $ 907  
                         

Assumptions used to determine net periodic benefit cost:

                        

Discount rate

     2.70 %     1.75 %     2.50 %

Increase in future compensation levels

     4.00 %     4.00 %     4.00 %

 

Estimated Future Benefit Payments:

          

Fiscal 2024

   $ 877    

Fiscal 2025

     960    

Fiscal 2026

     960    

Fiscal 2027

     787    

Fiscal 2028

     817    

Fiscal 2029 through fiscal 2033

     3,943    

 

For the SRIP, the discount rate used to determine the fiscal 2023 net periodic cost was 2.70%, based on the Mercer yield curve and the plan’s expected benefit payments. At January 29, 2023, combining the Mercer yield curve and the plan's expected benefit payments resulted in a rate of 4.85%. This rate was used to value the ending benefit obligations.

 

At January 29, 2023, the actuarial gain related to the SRIP amounted to $1 million, net of tax of $288,000. At January 30, 2022, the actuarial gain related to the SRIP amounted to $553,000, net of tax of $229,000. The estimated actuarial gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2024 fiscal year is $279,203. There is no expected prior service (cost) or credit amortization.

 

   

SERP (Supplemental Executive Retirement Plan)

  
   

January 29,

    

January 30,

  
   

2023

    

2022

  

Change in benefit obligation:

                

Beginning projected benefit obligation

   $ 1,531     $ 1,681  

      Service cost

     -       -  

      Interest cost

     41       34  

      Benefits paid

     (158 )     (145 )

      Actuarial (gain)/loss

     (119 )     (39 )

Ending projected benefit obligation (funded status)

   $ 1,295     $ 1,531  
                 

Accumulated benefit obligation

   $ 1,295     $ 1,531  
                 

Discount rate used to value the ending benefit obligations:

     4.70 %     2.80 %
                 

Amount recognized in the consolidated balance sheets:

                

   Current liabilities (Accrued salaries, wages and benefits line)

   $ 155     $ 156  

   Non-current liabilities (Deferred compensation line)

     1,140       1,375  

      Total

   $ 1,295     $ 1,531  

 

   

Fifty-Two Weeks Ended

  
   

January 29,

    

January 30,

    

January 31,

  
   

2023

    

2022

    

2021

  

Net periodic benefit cost

                        

   Service cost

   $ -     $ -     $ -  

   Interest cost

     41       34       46  

   Net gain

     (2 )             -  

      Net periodic benefit cost

   $ 39     $ 34     $ 46  
                         
                         

Other changes recognized in accumulated other comprehensive income

                        

   Net (gain)/loss arising during period

     (119 )     (39 )     (67 )

Amortizations:

                        

   Gain (Loss)

     2       -       0  

Total recognized in other comprehensive loss (income)

     (117 )     (39 )     (67 )
                         

Total recognized in net periodic benefit cost and accumulated other comprehensive income

   $ (78 )   $ (5 )   $ (21 )
                         

Assumptions used to determine net periodic benefit cost:

                        

Discount rate

     2.80 %     2.10 %     2.60 %

Increase in future compensation levels

     N/A      
N/A
      
N/A
  

 

Estimated Future Benefit Payments:

          

Fiscal 2024

   $ 155    

Fiscal 2025

     150    

Fiscal 2026

     144    

Fiscal 2027

     137    

Fiscal 2028

     130    

Fiscal 2029 through fiscal 2033

     529    

 

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 29, 2023, combining the Aon AA Above Median yield curve and the plan's expected benefit payments created a rate of 4.70%. 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%. This rate used to determine the fiscal 2023 net periodic cost. The change in the discount rate from 2.80% to 4.70% decreased liabilities.

 

At January 29, 2023, the actuarial gain related to the SERP was $119,000. At January 30, 2022, the actuarial gain related to the SERP was $39,000.