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Retirement and Other Benefit Plans
 12 Months Ended
Oct. 28, 2022
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 (income) cost consisted of the following:

 

   October 28, 2022   October 29, 2021 
   (52 Weeks)   (52 Weeks) 
Service cost  $127   $134 
Interest cost   1,772    1,742 
Expected return on plan assets   (4,336)   (3,697)
Amortization of unrecognized loss   1,210    2,722 
Net pension (income) cost  $(1,227)  $901 

 

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:

 

   2022   2021 
Discount rate   2.58%   2.45%
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 28, 2022   October 29, 2021 
   (52 Weeks)   (52 Weeks) 
Change in plan assets:          
Fair value of plans’ assets - beginning of year  $63,295   $54,116 
Actual return on plans’ assets   (10,476)   11,285 
Benefits paid   (2,170)   (2,106)
Fair value of plans’ assets - end of year  $50,649   $63,295 
Change in benefit obligations:          
Benefit obligations - beginning of year  $70,882   $72,794 
Service cost   127    134 
Interest cost   1,772    1,742 
Actuarial loss (gain)   (20,513)   (1,681)
Benefits paid   (2,169)   (2,107)
Benefit obligations - end of year   50,099    70,882 
Funded status of the plans   550    (7,587)
Unrecognized net actuarial loss   8,471    15,381 
Net amount recognized  $9,021   $7,794 

 

We perform an internal rate of return analysis when making the discount rate selection. The discount rates were based on FTSE Pension Discount Curve (formerly Citibank) as of October 28, 2022, and October 29, 2021, respectively.

 

The plans’ 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 2023 is planned.

 

For fiscal year 2022, our actuary used mortality tables from the Pri-2012 Total Dataset Mortality Table with MP-2021 Scaling. The expected rate of return on the plans’ assets remained the same at 7.00% effective for fiscal years 2022 and 2021, respectively.

 

 

The actual and target allocation for plans’ assets are as follows:

 

Asset Class  2022  

Target

Asset

Allocation

   2021  

Target

Asset

Allocation

 
Large Cap Equities   22.6%   23.0%   23.2%   23.0%
Mid Cap Equities   0.0%   0.0%   0.0%   0.0%
Small Cap Equities   9.7%   9.0%   9.1%   9.0%
International (equities only)   25.9%   25.0%   24.3%   25.0%
Fixed Income   35.9%   37.0%   37.4%   37.0%
Cash and other   5.9%   6.0%   6.0%   6.0%
Total   100.0%   100.0%   100.0%   100.0%

 

The fair value of our pension plans’ assets as of October 28, 2022, and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:

 

   2022 
   Level 1   Level 2   Level 3   Total 
                     
Total plan assets  $50,649    -    -   $50,649 

 

The fair value of our pension plan assets as of October 29, 2021, and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:

 

   2021 
   Level 1   Level 2   Level 3   Total 
                     
Total plan assets  $63,295    -    -   $63,295 

 

Expected payments for pension benefits are as follows:

 

Fiscal Years  Pension Benefits 
2022  $2,924 
2023  $3,087 
2024  $3,233 
2025  $3,343 
2026  $3,440 
2027-2031  $17,759 

 

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 2022 and 2021.

 

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 $4,985 and $6,392 as of October 28, 2022, and October 29, 2021, 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 $11,584 and $13,641 as of October 28, 2022, and October 29, 2021, respectively.

 

 

Expected payments for executive postretirement benefits are as follows:

 

Fiscal Years  Executive
Postretirement
Benefits		 
2023  $533 
2024  $533 
2025  $533 
2026  $533 
2027  $533 
2028-2032  $2,621 

 

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 $3,659 and $3,151 as of October 28, 2022, and October 29, 2021, respectively. Future payments are approximately $1,746, $943, $892, $55, and $23 for fiscal years 2023 through 2027, 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 28, 2022   October 29, 2021 
   (52 Weeks)   (52 Weeks) 
Interest cost  $13   $13 
Amortization of actuarial gain   (10)   (1)
Net periodic postretirement healthcare cost  $3   $12 

 

Weighted average assumptions for the fiscal years ended October 28, 2022, and October 29, 2021, are as follows:

 

   2022   2021 
Discount rate   5.44%   2.57%
Medical trend rate next year   6.5%   8.00%
Ultimate trend rate   5.00%   5.00%
Year ultimate trend rate is achieved   2026    2026 

 

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

 

   2022   2021 
Interest cost plus service cost  $2   $2 
Accumulated postretirement healthcare obligation  $65   $67 

 

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

 

   2022   2021 
Interest cost plus service cost  $(1)  $(1)
Accumulated postretirement healthcare obligation  $(55)  $(56)

 

 

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

 

   2022   2021 
Change in accumulated postretirement healthcare obligation:          
Healthcare obligation - beginning of year  $530   $588 
Interest cost   13    13 
Actuarial gain   (105)   (54)
Benefits paid   (12)   (17)
Healthcare obligation – end of year  $426   $530 
           
Funded status of the plans   426    530 
Unrecognized net actuarial gain   (215)   (119)
Unrecognized amounts recorded in other comprehensive income   215    119 
Postretirement healthcare liability  $426   $530 

 

Expected payments for the postretirement benefits are as follows:

 

Fiscal Years 

Postretirement
Healthcare

Benefits

 
2023  $25 
2024  $25 
2025  $26 
2026  $25 
2027-2031  $         124 

 

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 2022 and 2021, we made total employer contributions to the 401K Plan in the amounts of $893 and $801, respectively.