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Retirement and Other Benefit Plans
 12 Months Ended
Oct. 30, 2020
Retirement Benefits [Abstract]  
Retirement and Other Benefit Plans

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:

 

    October 30, 2020     November 1, 2019  
    (52 Weeks)     (52 Weeks)  
Service cost   $ 127     $ 103  
Interest cost     2,025       2,396  
Expected return on plan assets     (3,688 )     (3,414 )
Amortization of unrecognized loss     2,163       1,236  
Net pension cost   $ 627     $ 321  

 

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:

 

    2020     2019  
Discount rate     2.45 %     3.00 %
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:

 

    October 30, 2020     November 1, 2019  
    (52 Weeks)     (52 Weeks)  
Change in plan assets:                
Fair value of plan assets - beginning of year   $ 53,892     $ 49,434  
Employer contributions     -       875  
Actual return on plan assets     2,189       5,402  
Benefits paid     (1,965 )     (1,819 )
Fair value of plan assets - end of year   $ 54,116     $ 53,892  
Change in benefit obligations:                
Benefit obligations - beginning of year   $ 68,022     $ 57,487  
Service cost     127       103  
Interest cost     2,025       2,396  
Actuarial gain (loss)     4,585       9,856  
Benefits paid     (1,965 )     (1,820 )
Benefit obligations - end of year     72,794       68,022  
Funded status of the plans     (19,965 )     (14,130 )
Unrecognized prior service costs     -       -  
Unrecognized net actuarial loss     27,373       23,453  
Net amount recognized   $ 7,408     $ 9,323  

 

We perform an internal rate of return analysis when making the discount rate selection. The discount rates were based on FTSE Pension Liability Index (formerly Citibank) as of October 31, 2020 and November 1, 2019, 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. No expected employer contribution to the plans in fiscal year 2021 is planned.

 

For fiscal year 2020, our actuary updated mortality tables from the RP-2014 Total Dataset Mortality Table with Scaling to Pri-2012 Total Dataset Mortality Table with MP-2020 Scaling. The expected rate of return on plan assets remained the same at 7.00% effective for fiscal years 2020 and 2019, respectively.

 

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

 

Asset Class   2020    

Target

Asset

Allocation

     2019    

Target

Asset

Allocation

  
Large Cap Equities     21.5 %     22.0 %     21.8 %     22.0 %
Mid Cap Equities     0.0 %     0.0 %     0.0 %     0.0 %
Small Cap Equities     13.5 %     12.0 %     13.8 %     12.0 %
International (equities only)     25.7 %     26.0 %     25.2 %     26.0 %
Fixed Income     37.5 %     39.0 %     37.6 %     39.0 %
Cash     1.8 %     1.0 %     1.6 %     1.0 %
Total     100.0 %     100.0 %     100.0 %     100.0 %

 

The fair value of our pension plan assets as of October 30, 2020 and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:

 

    2020  
    Level 1     Level 2     Level 3     Total  
                         
Total plan assets   $ 54,116       -       -     $ 54,116  
                                 

 

Expected payments for the pension benefits are as follows:

 

Fiscal Years   Pension Benefits  
2021   $ 2,627  
2022   $ 2,770  
2023   $ 2,936  
2024   $ 3,091  
2025   $ 3,303  
2026-2030   $ 17,625  

 

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 2020 and 2019.

 

Supplemental Executive Retirement Plan

 

Retirement benefits otherwise available to certain key executives under the Primary Benefit Plan have been limited by the effects of the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the Tax Reform Act of 1986 (“TRA”). To offset the loss of retirement benefits associated with TEFRA and TRA, the Company has adopted a non-qualified “makeup” benefit plan (the “Supplemental Executive Retirement Plan”). Benefits will be provided under the Supplemental Executive Retirement Plan in an amount equal to 60% of each participant’s final average earnings minus any pension benefits and primary insurance amounts available to them under Social Security. However, in all cases the benefits are capped at $120,000 per year for Allan L. Bridgford. Benefits provided under this plan for William L. Bridgford and Raymond F. Lancy are calculated at 50% of final average earnings, capped at $200,000 per year, without offsets for other pension or Social Security benefits.

 

Benefits payable related to these plans and included in the accompanying consolidated financial statements were $6,544 and $6,428 as of October 30, 2020 and November 1, 2019, 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 $13,195 and $12,289 as of October 30, 2020 and November 1, 2019, respectively.

 

Expected payments for executive postretirement benefits are as follows:

 

Fiscal Years   Executive Postretirement Benefits  
2021   $ 499  
2022   $ 533  
2023   $ 533  
2024   $ 533  
2025   $ 533  
2026-2030   $ 2,642  

 

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 $6,070 and $7,919 as of October 30, 2020 and November 1, 2019, respectively. Future payments are approximately $3,074, $1,996, $877, $87 and $36 for fiscal years 2021 through 2025, 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 cost (benefit) consisted of the following:

 

    October 30, 2020     November 1, 2019  
    (52 Weeks)     (52 Weeks)  
Service cost   $ 3     $ 9  
Interest cost     16       22  
Amortization of prior service cost     -       (44 )
Amortization of actuarial gain     -       (7 )
Net periodic postretirement healthcare cost (benefit)   $ 19     $ (20 )

 

Weighted average assumptions for the fiscal years ended October 30, 2020 and November 1, 2019 are as follows:

 

    2020     2019  
Discount rate     2.43 %     2.92 %
Medical trend rate next year     8.00 %     7.50 %
Ultimate trend rate     5.00 %     5.00 %
Year ultimate trend rate is achieved     2026       2025  

 

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

 

    2020     2019  
Interest cost plus service cost   $ 2     $ 3  
Accumulated postretirement healthcare obligation   $ 59     $ 64  

 

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

 

    2020     2019  
Interest cost plus service cost   $ (2 )   $ (3 )
Accumulated postretirement healthcare obligation   $ (50 )   $ (53 )

 

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

 

    2020     2019  
Change in accumulated postretirement healthcare obligation:                
Healthcare obligation - beginning of year   $ 586     $ 517  
Service cost     3       9  
Interest cost     16       22  
Actuarial gain     (8 )     44  
Benefits paid     (9 )     (6 )
Healthcare obligation – end of year   $ 588     $ 586  
                 
Funded status of the plans     588       586  
Unrecognized prior service costs     -       -  
Unrecognized net actuarial gain     (66 )     (58 )
Unrecognized amounts recorded in other comprehensive income     66       58  
Postretirement healthcare liability   $ 588     $ 586  

 

Expected payments for the postretirement benefits are as follows:

 

Fiscal Years  

Postretirement Healthcare

Benefits

  
2021   $ 66  
2022   $ 46  
2023   $ 21  
2024   $ 22  
2025-2029   $       108  

 

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 2020 and 2019, we made total employer contributions to the 401K Plan in the amounts of $754 and $722, respectively.