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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Feb. 02, 2025
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 $1.8 million in fiscal 2025 and 2024, and $1.5 million in fiscal 2023.

 

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) 
   February 2,   January 28, 
   2025   2024 
Change in benefit obligation:        
Beginning projected benefit obligation  $7,371   $7,976 
Service cost   58    58 
Interest cost   348    364 
Benefits paid   (877)   (877)
Actuarial (gain)/ loss   (64)   (150)
Ending projected benefit obligation (funded status)  $6,836   $7,371 
           
Accumulated benefit obligation  $6,677   $7,209 
           
Discount rate used to value the ending benefit obligations:   5.30%   5.05%
           
Amount recognized in the consolidated balance sheets:          
Current liabilities (Accrued salaries, wages and benefits line)  $962   $961 
Non-current liabilities (Deferred compensation line)   5,874    6,410 
Total  $6,836   $7,371 

 

    53 Weeks Ended    52 Weeks Ended    52 Weeks Ended 
    February 2,    January 28,    January 29, 
    2025    2024    2023 
Net periodic benefit cost               
Service cost  $58   $58   $126 
Interest cost   348    364    243 
Net (gain)/loss   (236)   (279)   83 
Net periodic benefit cost  $170   $143   $452 
                
Other changes recognized in accumulated other comprehensive income               
Net (gain) / loss arising during period   (64)   (150)   (1,004)
Amortizations:               
Gain (loss)   236    279    (83)
Total recognized in other comprehensive income   172    129    (1,087)
                
Total recognized in net periodic benefit cost and accumulated other comprehensive income  $342   $272   $(635)
                
Assumptions used to determine net periodic benefit cost:               
Discount rate   5.05%   4.85%   2.70%
Increase in future compensation levels   4.00%   4.00%   4.00%
                

Estimated Future Benefit Payments:               
Fiscal 2026  $962           
Fiscal 2027   789           
Fiscal 2028   816           
Fiscal 2029   832           
Fiscal 2030   832           
Fiscal 2031 through fiscal 2035   3,396           

  

For the SRIP, the discount rate used to determine the fiscal 2025 net periodic cost was 5.05%, based on the Mercer yield curve and the plan’s expected benefit payments. At February 2, 2025, combining the Mercer yield curve and the plan’s expected benefit payments resulted in a rate of 5.30%. This rate was used to value the ending benefit obligations.

At February 2, 2025, the actuarial gain related to the SRIP amounted to $64,000, net of tax of $15,000. At January 28, 2024, the actuarial gain related to the SRIP amounted to $150,000, net of tax of $41,000. At January 29, 2023, the actuarial gain related to the SRIP amounted to $1 million, net of tax of $288,000. The estimated actuarial gain that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2026 fiscal year is $178,845. There is no expected prior service (cost) or credit amortization.

 

   SERP (Supplemental Executive Retirement Plan) 
   February 2,   January 28, 
   2025   2024 
Change in benefit obligation:        
Beginning projected benefit obligation  $1,224   $1,295 
Service cost   -    - 
Interest cost   56    57 
Benefits paid   (171)   (157)
Actuarial (gain)/loss   28    29 
Ending projected benefit obligation (funded status)  $1,137   $1,224 
           
Accumulated benefit obligation  $1,137   $1,224 
           
Discount rate used to value the ending benefit obligations:   5.40%   4.90%
           
Amount recognized in the consolidated balance sheets:          
Current liabilities (Accrued salaries, wages and benefits line)  $155   $155 
Non-current liabilities (Deferred compensation line)   982    1,069 
Total  $1,137   $1,224 

 

    53 Weeks Ended    52 Weeks Ended    52 Weeks Ended 
    February 2,    January 28,    January 29, 
    2025    2024    2023 
Net periodic benefit cost               
Service cost  $-   $-   $- 
Interest cost   56    57    41 
Net gain   (12)   (15)   (2)
Net periodic benefit cost  $44   $42   $39 
                
Other changes recognized in accumulated other comprehensive income               
Net (gain)/loss arising during period   28    29    (119)
Amortizations:               
Gain (Loss)   12    15    2 
Total recognized in other comprehensive income   40    44    (117)
                
               
Total recognized in net periodic benefit cost and accumulated other comprehensive income  $84   $86   $(78)
                
Assumptions used to determine net periodic benefit cost:               
Discount rate   4.90%   4.70%   2.80%
Increase in future compensation levels   N/A    N/A    N/A 
                

Estimated Future Benefit Payments:               
Fiscal 2026  $155           
Fiscal 2027   148           
Fiscal 2028   140           
Fiscal 2029   132           
Fiscal 2030   123           
Fiscal 2031 through fiscal 2035   476           

 

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 February 2, 2025, combining the Aon AA Above Median yield curve and the plan’s expected benefit payments created a rate of 5.40%. This rate was used to value the ending benefit obligations. At January 28, 2024, combining the Aon AA Above Median yield curve and the plan’s expected benefit payments created a rate of 4.90%. This rate was used to determine the fiscal 2025 net periodic cost.

 

At February 2, 2025 and January 28, 2024, the actuarial loss related to the SERP was $28,000 and $29,000, respectively.