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Note 3 - Retirement and Other Benefit Plans | 12 Months Ended
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Oct. 28, 2016
Notes to Financial Statements |
Pension and Other Postretirement Benefits Disclosure [Text Block] | NOTE 3 - Retirement and Other Benefit Plans: Noncontributory - Trusteed Defined Benefit Retirement Plans for Sales, Administrative, Supervisory and Certain Other Employees We have noncontributory - trusteed defined benefit retirement plans for sales, administrative, supervisory and certain other employees. In the third quarter of fiscal year 2006, we froze future benefit accruals under this plan for employees classified within the administrative, sales or supervisory job classifications or within any non - bargaining class. The benefits under these plans are primarily based on years of service and compensation levels. The funding policy of the plan is to make contributions which are at least equal to the minimum required contributions needed to avoid a funding deficiency. The measurement date for the plan is our fiscal year end. Net pension cost consisted of the following:
|  | 52 Weeks |
|  | 2016 |  |  | 2015 |
Service cost |  | $ | 130 |  |  | $ | 113 |
Interest cost |  |  | 2,448 |  |  |  | 2,176 |
Expected return on plan assets |  |  | (2,871 | ) |  |  | (3,346 | )
Amortization of unrecognized loss |  |  | 1,927 |  |  |  | 1,244 |
Amortization of unrecognized prior service costs |  |  | - |  |  |  | - |
Net pension cost |  | $ | 1,634 |  |  | $ | 187 |
Net pension costs and benefit obligations are determined using assumptions as of the beginning of each fiscal year. Weighted average assumptions for each fiscal year are as follows:
|  | 2016 |  |  | 2015 |
Discount rate |  |  | 3.40 | % |  |  | 4.15 | %
Rate of increase in salary levels |  |  | N/A |  |  |  | N/A |
Expected return on plan assets |  |  | 7.00 | % |  |  | 8.00 | %
The benefit obligation, plan assets, and funded status of these plans as of the fiscal years ended are as follows:
|  | 52 Weeks |
|  | 2016 |  |  | 2015 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets - beginning of year |  | $ | 41,419 |  |  | $ | 42,320 |
Employer contributions |  |  | 1,150 |  |  |  | 1,157 |
Actual return (depreciation) on plan assets |  |  | 790 |  |  |  | (640 | )
Benefits paid |  |  | (1,488 | ) |  |  | (1,418 | )
Fair value of plan assets - end of year |  | $ | 41,871 |  |  | $ | 41,419 |
Change in benefit obligations: |  |  |  |  |  |  |  |
Benefit obligations - beginning of year |  | $ | 59,931 |  |  | $ | 54,277 |
Service cost |  |  | 130 |  |  |  | 113 |
Interest cost |  |  | 2,448 |  |  |  | 2,176 |
Actuarial loss |  |  | 7,266 |  |  |  | 4,783 |
Benefits paid |  |  | (1,488 | ) |  |  | (1,418 | )
Benefit obligations - end of year |  |  | 68,287 |  |  |  | 59,931 |
Funded status of the plans |  |  | (26,416 | ) |  |  | (18,512 | )
Unrecognized prior service costs |  |  | - |  |  |  | - |
Unrecognized net actuarial loss |  |  | 33,264 |  |  |  | 25,844 |
Net amount recognized |  | $ | 6,848 |  |  | $ | 7,332 |
We perform an internal rate of return analysis when making the discount rate selection. The discount rates were based on Citigroup Pension Liability Index as of September 30, 2016 and October 31, 2015 respectively. Plan assets are primarily invested in marketable equity securities, corporate and government debt securities and are administered by an investment management company. The plans’ long - term return on assets is based on the weighted - average of the plans’ investment allocation as of the measurement date and the published historical returns for those types of asset categories, taking into consideration inflation rate forecasts. Our expected employer contribution to the plan in fiscal year 2017 is $1,109. During fiscal year 2015, our actuary updated mortality tables from the IRS 2014 Combined Static Mortality assumptions to the SOA RP 2014 Total Dataset Adjusted to 2006 with Scale MP - 2015. The change in mortality table resulted in a significant liability increase in fiscal year 2015 as well as an increased net periodic pension cost (NPPC) projection for fiscal year 2016. The expected rate of return on plan assets decreased from 8.00% to 7.00% effective for fiscal year 2016. The lower expected rate of return increases net pension costs in future fiscal years. The actual and target allocation for plan assets are as follows:
Asset Class |  | 2016 |  |  | Target Asset Allocation |  |  | 2015 |  |  | Target Asset Allocation |
Large Cap Equities |  |  | 32.0 | % |  |  | 32.0 | % |  |  | 31.1 | % |  |  | 32.0 | %
Mid Cap Equities |  |  | 0 | % |  |  | 0.0 | % |  |  | 0 | % |  |  | 0.0 | %
Small Cap Equities |  |  | 12.1 | % |  |  | 12.0 | % |  |  | 13.3 | % |  |  | 12.0 | %
International (equities only) |  |  | 21.3 | % |  |  | 21.0 | % |  |  | 20.3 | % |  |  | 21.0 | %
Fixed Income |  |  | 30.7 | % |  |  | 31.0 | % |  |  | 30.8 | % |  |  | 31.0 | %
Other (Government/Corporate, Bonds) |  |  | 2.0 | % |  |  | 2.0 | % |  |  | 1.9 | % |  |  | 2.0 | %
Cash |  |  | 1.9 | % |  |  | 2.0 | % |  |  | 2.6 | % |  |  | 2.0 | %
Total |  |  | 100.0 |  |  |  | 100.0 | % |  |  | 100.0 |  |  |  | 100.0 | %
The fair value of our pension plan assets as of October 28, 2016 and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:
|  | 2016 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Total plan assets |  | $ | 41,871 |  |  |  | - |  |  |  | - |  |  | $ | 41,871 |
Expected payments for the pension benefits are as follows:
Fiscal Years |  |  | Pension Benefits |
2017 |  |  | $ | 2,277 |
2018 |  |  | $ | 2,197 |
2019 |  |  | $ | 2,124 |
2020 |  |  | $ | 2,466 |
2021 |  |  | $ | 2,663 |
2022-2026 |  |  | $ | 15,888 |
Executive Retirement Plans Non - Qualified Deferred Compensation Effective January 1, 1991 we adopted a deferred compensation savings plan for certain key employees. Under this arrangement, selected employees contribute a portion of their annual compensation to the plan. We contribute an amount to each participant’s account by computing an investment return equal to Moody’s Average Seasoned Bond Rate plus 2%. Employees receive vested amounts upon death, termination or attainment of retirement age. No benefit expense was recorded under these plans for fiscal years 2016 and 2015. Supplemental Executive Retirement Plan In fiscal year 1991, we adopted a non - qualified supplemental retirement plan for certain key employees. Benefits provided under the plan are equal to 60% of the employee’s final average earnings, less amounts provided by our defined benefit pension plan and amounts available through Social Security. Benefits payable related to these plans and included in the accompanying consolidated financial statements were $5,454 and $4,907 at October 28, 2016 and October 30, 2015, respectively. In connection with this arrangement we are the beneficiary of life insurance policies on the lives of certain key employees and retirees. The aggregate cash surrender value of these policies, included in non - current assets, was $13,769 and $13,660 at October 28, 2016 and October 30, 2015, respectively. Expected payments for executive postretirement benefits are as follows:
Fiscal Years |  |  | Executive Postretirement Benefits |
2017 |  |  | $ | 75 |
2018 |  |  | $ | 121 |
2019 |  |  | $ | 287 |
2020 |  |  | $ | 521 |
2021 |  |  | $ | 521 |
2022-2026 |  |  | $ | 2,603 |
Incentive Compensation Plan for Certain Key Executives We provide an incentive compensation plan for certain key executives, which is based upon our pretax income. The payment of these amounts is generally deferred over three or five - year periods. The total amount payable related to this arrangement was $7,098 and $3,125 at October 28, 2016 and October 30, 2015, respectively. Future payments are approximately $2,574, $2,541, $1,785, $129 and $69 for fiscal years 2017 through 2021, respectively. Postretirement Healthcare Benefits for Selected Executive Employees We provide postretirement health care benefits for selected executive employees. Net periodic postretirement healthcare cost is determined using assumptions as of the beginning of each fiscal year, except for the total actual benefit payments and the discount rate used to develop the net periodic postretirement benefit expense, which is determined at the end of the fiscal year. Net periodic postretirement healthcare cost consisted of the following:
|  | 52 Weeks |
|  | 2016 |  |  | 2015 |
Service cost |  | $ | 13 |  |  | $ | 20 |
Interest cost |  |  | 28 |  |  |  | 36 |
Amortization of prior service cost |  |  | (132 | ) |  |  | - |
Amortization of actuarial gain |  |  | (106 | ) |  |  | (37 | )
Net periodic postretirement healthcare (benefit) cost |  | $ | (197 | ) |  | $ | 19 |
Weighted average assumptions for the fiscal years ended October 28, 2016 and October 30, 2015 are as follows:
|  | 2016 |  |  | 2015 |
Discount rate |  |  | 3.38 | % |  |  | 3.94 | %
Medical trend rate next year |  |  | 8.50 | % |  |  | 8.50 | %
Ultimate trend rate |  |  | 5.00 | % |  |  | 5.00 | %
Year ultimate trend rate is achieved |  | 2021 |  |  | 2021 |
The table below shows the estimated effect of a 1% increase in healthcare cost trend rate on the following:
|  | 2016 |  |  | 2015 |
Interest cost plus service cost |  | $ | 6 |  |  | $ | 5 |
Accumulated postretirement healthcare obligation |  | $ | 59 |  |  | $ | 80 |
The table below shows the estimated effect of a 1% decrease in healthcare cost trend rate on the following:
|  | 2016 |  |  | 2015 |
Interest cost plus service cost |  | $ | (5 | ) |  | $ | (4 | )
Accumulated postretirement healthcare obligation |  | $ | (49 | ) |  | $ | (66 | )
The healthcare obligation and funded status of this plan as of the fiscal years ended are as follows:
|  | 2016 |  |  | 2015 |
Change in accumulated postretirement healthcare obligation: |  |  |  |  |  |  |  |
Healthcare obligation - beginning of year |  | $ | 1,003 |  |  | $ | 965 |
Service cost |  |  | 13 |  |  |  | 20 |
Interest cost |  |  | 28 |  |  |  | 36 |
Eliminate FSA |  |  | (441 | ) |  |  | - |
Actuarial (gain) loss |  |  | (89 | ) |  |  | 1 |
Benefits paid |  |  | (3 | ) |  |  | (19 | )
Healthcare obligation – end of year |  | $ | 511 |  |  | $ | 1,003 |
Funded status of the plans |  |  | 511 |  |  |  | 1,003 |
Unrecognized prior service costs |  |  | (308 | ) |  |  | - |
Unrecognized net actuarial gain |  |  | (156 | ) |  |  | (174 | )
Unrecognized amounts recorded in other comprehensive income |  |  | 464 |  |  |  | 174 |
Postretirement healthcare liability |  | $ | 511 |  |  | $ | 1,003 |
Expected payments for the postretirement benefits are as follows:
Fiscal Years | Postretirement Heathcare Benefits |
2017 |  |  | $ | 13 |
2018 |  |  | $ | 13 |
2019 |  |  | $ | 53 |
2020 |  |  | $ | 76 |
2021-2025 |  |  | $ | 396 |
401(K) Plan for Sales, Administrative, Supervisory and Certain Other Employees During the fiscal year ended November 3, 2006, we implemented a qualified 401(K) retirement plan (the “Plan”) for our sales, administrative, supervisory and certain other employees. During fiscal years 2016 and 2015, we made total employer contributions to the Plan in the amounts of $549 and $515, respectively.

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