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Retirement and Other Benefit Plans
 12 Months Ended
Nov. 03, 2023
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 consisted of the following:

 

Schedule of Net Pension Cost 

   November 3, 2023   October 28, 2022 
   (53 Weeks)   (52 Weeks) 
Service cost  $57   $127 
Interest cost   2,688    1,772 
Expected return on plan assets   (3,439)   (4,336)
Amortization of unrecognized loss   615    1,210 
Net pension income   $(79)  $(1,227)

 

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:

 

Schedule of Assumptions Used

   November 3, 2023   October 28, 2022 
Discount rate   5.96%   5.44%
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:

 

Schedule of Changes in Projected Benefit Obligations

   November 3, 2023   October 28, 2022 
   (53 Weeks)   (52 Weeks) 
Change in plan assets:          
Fair value of the plans’ assets - beginning of year  $50,649   $63,295 
Actual return on the plans’ assets   2,394    (10,476)
Benefits paid   (2,358)   (2,170)
Fair value of the plans’ assets - end of year  $50,685   $50,649 
Change in benefit obligations:          
Benefit obligations - beginning of year  $50,098   $70,882 
Service cost   57    127 
Interest cost   2,688    1,772 
Actuarial loss   (1,686)   (20,513)
Benefits paid   (2,357)   (2,170)
Benefit obligations - end of year   48,800    50,098 
Funded status of the plans   1,885    551 
Unrecognized net actuarial loss   7,216    8,470 
Net amount recognized  $9,101   $9,021 

 

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 November 3, 2023, and October 28, 2022, 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 2024 is planned.

 

For fiscal year 2023, 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 2023 and 2022, respectively.

 

 

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

 

Schedule of Allocation of Plan Assets

Asset Class  2023  

Target

Asset

Allocation

   2022  

Target

Asset

Allocation

 
Large Cap Equities   21.7%   23.0%   22.6%   23.0%
Mid Cap Equities   0.0%   0.0%   0.0%   0.0%
Small Cap Equities   9.5%   9.0%   9.7%   9.0%
International (equities only)   26.9%   27.0%   25.9%   25.0%
Fixed Income   36.0%   37.0%   35.9%   37.0%
Cash and other   5.9%   4.0%   5.9%   6.0%
Total   100.0%   100.0%   100.0%   100.0%

 

The fair value of our pension plans’ assets as of November 3, 2023, and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:

 

Schedule of Fair Value of Pension Plan Assets

    2023  
    Level 1     Level 2     Level 3     Total  
                                 
Total plan assets   $ 50,685         -         -     $ 50,685  

 

The fair value of our pension plan 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 

 

Expected payments for pension benefits are as follows:

 

Schedule of Expected Payments for Pension Benefits

Fiscal Years  Pension Benefits 
2024  $3,258 
2025  $3,370 
2026  $3,466 
2027  $3,561 
2028  $3,614 
2029-2033   $18,364 

 

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 2023 and 2022.

 

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 $4,994 and $4,985 as of November 3, 2023, and October 28, 2022, respectively. The benefit payable is recorded as $249 and $133 under current liabilities and $4,745 and $4,852 under non-current liabilities as of November 3, 2023 and October 28, 2022, 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 $12,029 and $11,584 as of November 3, 2023, and October 28, 2022, respectively. The net periodic pension income for fiscal year 2023 was $1,057 caused by the change in pension discount rate from fiscal year 2022 to fiscal year 2023.

 

 

Expected payments for executive postretirement benefits are as follows:

 

Schedule of Expected Payments for Pension Benefits

Fiscal Years  Executive
Postretirement
Benefits		 
2024  $   533 
2025  $533 
2026  $533 
2027  $533 
2028  $532 
2029-2032   $2,612 

 

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 $3,848 and $3,659 as of November 3, 2023, and October 28, 2022, respectively. Future payments are approximately $1,582, $1,531, $694, $33, and $8 for fiscal years 2024 through 2028, 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:

 

 Schedule Net Periodic Post-retirement Healthcare (benefit) Cost

   November 3, 2023   October 28, 2022 
   (53 Weeks)   (52 Weeks) 
Interest cost  $22   $13 
Amortization of actuarial gain   (17)   (10)
Service cost           4           - 
Net periodic postretirement healthcare cost  $9   $3 

 

Weighted average assumptions for the fiscal years ended November 3, 2023, and October 28, 2022, are as follows:

 

Schedule of Health Care Cost Trend Rates

   2023   2022 
Discount rate   5.96%   5.44%
Medical trend rate next year   7.50%   6.50%
Ultimate trend rate   5.00%   5.00%
Year ultimate trend rate is achieved   2028    2026 

 

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

 

Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

   2023   2022 
Interest cost plus service cost  $5   $2 
Accumulated postretirement healthcare obligation  $106   $65 

 

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

 

Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

   2023   2022 
Interest cost plus service cost  $(4)  $(1)
Accumulated postretirement healthcare obligation  $(84)  $(55)

 

 

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

 

Schedule of Net Funded Status

   2023   2022 
Change in accumulated postretirement healthcare obligation:          
Healthcare obligation - beginning of year  $426   $530 
Interest cost   22    13 
Service cost   3    - 
Actuarial gain (loss)   230    (105)
Benefits paid   (32)   (12)
Healthcare obligation – end of year  $649   $426 
           
Funded status of the plans   649    426 
Unrecognized net actuarial gain   33    (215)
Unrecognized amounts recorded in other comprehensive income   (33)   215 
Postretirement healthcare liability  $649   $426 

 

Expected payments for the postretirement benefits are as follows:

 

Schedule of Expected Payments for Pension Benefits

Fiscal Years  Postretirement
Healthcare Benefits		 
2024  $36 
2025  $37 
2026  $          37 
2027  $37 
2028-2032  $177 

 

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 2023 and 2022, we made total employer contributions to the 401K Plan in the amounts of $887 and $893, respectively.