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Retirement and Other Benefit Plans

12 Months Ended

Nov. 02, 2018

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 these plans 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 plans requires contributions which are at least equal to the minimum required contributions needed to avoid a funding deficiency. The measurement date for the plans is our fiscal year end.

Net pension cost consisted of the following:

	November 2, 2018			November 3, 2017
	(52 Weeks)			(53 Weeks)
Service cost	$	126		$	131
Interest cost		2,248			2,196
Expected return on plan assets		(3,408	)		(2,901	)
Amortization of unrecognized loss		1,575			2,412
Net pension cost	$	541		$	1,838

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:

	2018			2017
Discount rate		4.30	%		3.65	%
Rate of increase in salary levels		N/A			N/A
Expected return on plan assets		7.00	%		7.00	%

The benefit obligation, plan assets, and funded status of these plans as of the fiscal years ended are as follows:

	November 2, 2018			November 3, 2017
	(52 Weeks)			(53 Weeks)
Change in plan assets:
Fair value of plan assets - beginning of year	$	48,208		$	41,871
Employer contributions		3,150			1,150
Actual return on plan assets		(242	)		6,853
Benefits paid		(1,682	)		(1,666	)
Fair value of plan assets - end of year	$	49,434		$	48,208
Change in benefit obligations:
Benefit obligations - beginning of year	$	62,480		$	68,287
Service cost		126			131
Interest cost		2,248			2,196
Actuarial gain		(5,686	)		(6,468	)
Benefits paid		(1,681	)		(1,666	)
Benefit obligations - end of year		57,487			62,480
Funded status of the plans		(8,053	)		(14,272	)
Unrecognized prior service costs		-			-
Unrecognized net actuarial loss		16,821			20,431
Net amount recognized	$	8,768		$	6,159

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, 2018 and October 31, 2017, 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. We contributed $2,000 more than our expected employer contribution to the plans in fiscal 2018 as part of a tax planning strategy. Our expected employer contribution to the plans in fiscal year 2019 is $1,150.

For fiscal year 2018, our actuary updated mortality tables from the RP-2014 Mortality Total Dataset, adjusted to 2006 with Scale MP-2016, Scaling to RP-2014 Mortality Total Dataset, adjusted to 2006, with MP-2017 Scaling. The expected rate of return on plan assets remained the same at 7.00% effective for fiscal years 2018 and 2017, respectively.

The actual and target allocation for plan assets are as follows:

Asset Class	2018			Target Asset Allocation			2017			Target Asset Allocation
Large Cap Equities		21.4	%		22.0	%		29.7	%		30.0	%
Mid Cap Equities		0.0	%		0.0	%		0.0	%		0.0	%
Small Cap Equities		13.0	%		12.0	%		13.2	%		12.0	%
International (equities only)		24.7	%		26.0	%		22.9	%		23.0	%
Fixed Income		39.0	%		39.0	%		32.2	%		33.0	%
Other (Government/Corporate, Bonds)		0.0	%		0.0	%		0.0	%		0.0	%
Cash		1.9	%		1.0	%		2.0	%		2.0	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

The fair value of our pension plan assets as of November 2, 2018 and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:

	2018
	Level 1		Level 2		Level 3		Total

Total plan assets	$	49,434		-		-	$	49,434

Expected payments for the pension benefits are as follows:

Fiscal Years	Pension Benefits
2019	$	2,304
2020	$	2,234
2021	$	2,602
2022	$	2,772
2023	$	3,203
2024-2028	$	16,576

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 this plan for fiscal years 2018 and 2017.

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 $5,563 and $5,608 as of November 2, 2018 and November 3, 2017, respectively. In connection with these arrangements 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 $11,624 and $13,105 as of November 2, 2018 and November 3, 2017, respectively.

Expected payments for executive postretirement benefits are as follows:

Fiscal Years	Executive Postretirement Benefits
2019	$	177
2020	$	524
2021	$	524
2022	$	524
2023	$	524
2024-2028	$	2,619

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 $9,283 and $10,530 as of November 2, 2018 and November 3, 2017, respectively. Future payments are approximately $4,796, $3,140, $1,183, $113 and $51 for fiscal years 2019 through 2023, respectively.

Postretirement Healthcare Benefits for Selected Executive Employees

We provide postretirement health care benefits for selected executive employees. Net periodic postretirement healthcare (benefit) 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 (benefit) consisted of the following:

	November 2. 2018			November 3. 2017
	(52 Weeks)			(53 Weeks)
Service cost	$	13		$	13
Interest cost		18			17
Amortization of prior service cost		(132	)		(132	)
Amortization of actuarial gain		(41	)		(58	)
Net periodic postretirement healthcare (benefit)	$	(142	)	$	(160	)

Weighted average assumptions for the fiscal years ended November 2, 2018 and November 3, 2017 are as follows:

	2018			2017
Discount rate		4.30	%		3.51	%
Medical trend rate next year		8.00	%		8.50	%
Ultimate trend rate		5.00	%		5.00	%
Year ultimate trend rate is achieved		2022			2022

The table below shows the estimated effect of a 1% increase in healthcare cost trend rate on the following:

	2018		2017
Interest cost plus service cost	$	4	$	4
Accumulated postretirement healthcare obligation	$	54	$	64

The table below shows the estimated effect of a 1% decrease in healthcare cost trend rate on the following:

	2018			2017
Interest cost plus service cost	$	(3	)	$	(4	)
Accumulated postretirement healthcare obligation	$	(45	)	$	(53	)

The healthcare obligation and funded status of this plan as of the fiscal years ended are as follows:

	2018			2017
Change in accumulated postretirement healthcare obligation:
Healthcare obligation - beginning of year	$	528		$	511
Service cost		13			13
Interest cost		18			17
Actuarial gain		(40	)		(11	)
Benefits paid		(2	)		(2	)
Healthcare obligation – end of year	$	517		$	528

Funded status of the plans		517			528
Unrecognized prior service costs		(44	)		(176	)
Unrecognized net actuarial gain		(109	)		(110	)
Unrecognized amounts recorded in other comprehensive income		153			286
Postretirement healthcare liability	$	517		$	528

Expected payments for the postretirement benefits are as follows:

Fiscal Years	Postretirement Healthcare Benefits
2019	$	57
2020	$	84
2021	$	66
2022	$	46
2023-2027	$	111

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 “401K Plan”) for our sales, administrative, supervisory and certain other employees. During fiscal years 2018 and 2017, we made total employer contributions to the 401K Plan in the amounts of $660 and $599, respectively.