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Retirement and Other Benefit Plans
 12 Months Ended
Nov. 01, 2024
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:

 

   November 1, 2024   November 3, 2023 
   (52 Weeks)   (53 Weeks) 
Service cost  $56   $57 
Interest cost   2,813    2,688 
Expected return on plan assets   (3,433)   (3,439)
Amortization of unrecognized loss   349    615 
Net pension income  $(215)  $(79)

 

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:

 

   November 1, 2024   November 3, 2023 
Discount rate   5.16%   5.96%
Rate of increase in salary levels   N/A    N/A 
Expected return on plan assets   5.00%   7.00%

 

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

 

   November 1, 2024   November 3, 2023 
   (52 Weeks)   (53 Weeks) 
Change in plan assets:          
Fair value of the plans’ assets - beginning of year  $50,685   $50,649 
Actual return on the plans’ assets   10,208    2,394 
Benefits paid   (2,574)   (2,358)
Fair value of the plans’ assets - end of year  $58,319   $50,685 
Change in benefit obligations:          
Benefit obligations - beginning of year  $48,800   $50,098 
Service cost   56    57 
Interest cost   2,813    2,688 
Actuarial gain (loss)   4,012    (1,686)
Benefits paid   (2,574)   (2,357)
Benefit obligations - end of year   53,107    48,800 
Funded status of the plans   5,212    1,885 
Unrecognized net actuarial loss   4,103    7,216 
Net amount recognized  $9,315   $9,101 

 

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 1, 2024, and November 3, 2023, respectively.

 

The plans’ assets are primarily invested in marketable equity securities, corporate and government debt securities, and the assets 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 2025 is planned.

 

For fiscal year 2024, 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 was 5.00% and 7.00% effective for fiscal years 2024 and 2023, respectively.

 

 

On May 22, 2024, we transitioned our pension plan assets held with Morgan Stanley Smith Barney LLC to align with our updated investment policy statement to shift away from equities to fixed income. This derisking strategy helps establish a basis for our investment results as well as helping to ensure that assets of the Plan are managed in accordance with the Employment Retirement Income Security Act of 1974 (“ERISA”) and regulations pertaining thereto.

 

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

 

Asset Class   2024    

Target 

Asset 

Allocation 

     2023    

Target 

Asset 

Allocation 

  
Large Cap Equities     9.3 %     8.0 %     21.7 %     23.0 %
Mid Cap Equities     0.0 %     0.0 %     0.0 %     0.0 %
Small Cap Equities     2.4 %     2.0 %     9.5 %     9.0 %
International (equities only)     4.1 %     5.0 %     26.9 %     27.0 %
Fixed Income     84.0 %     83.0 %     36.0 %     37.0 %
Cash and other     0.2 %     2.0 %     5.9 %     4.0 %
Total     100.0 %     100.0 %     100.0 %     100.0 %

 

The fair value of our pension plans’ assets as of November 1, 2024, and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows: 

 

    2024  
    Level 1     Level 2     Level 3     Total  
                                 
Total plan assets   $ 58,319         -         -     $ 58,319  

 

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: 

 

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

 

Expected payments for pension benefits are as follows:

 

Fiscal Years   Pension Benefits  
2025   $ 3,439  
2026   $ 3,529  
2027   $ 3,619  
2028   $ 3,669  
2029   $ 3,700  
2030-2034   $ 18,645  

 

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 2024 and 2023.

 

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 $5,046 and $4,994 as of November 1, 2024, and November 3, 2023, respectively. The benefit payable is recorded as $333 and $249 under current liabilities and $4,713 and $4,745 under non-current liabilities as of November 1, 2024, and November 3, 2023, 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 $14,032 and $12,029 as of November 1, 2024, and November 3, 2023, respectively. The net periodic pension income was $109 and $1,057 for fiscal year 2024 and 2023, respectively, caused by the change in pension discount rate between years. 

 

Expected payments for executive postretirement benefits are as follows:

 

Fiscal Years   Executive
Postretirement
Benefits		  
2025   $    533  
2026   $ 533  
2027   $ 533  
2028   $ 532  
2029   $ 522  
2030-2033   $ 2,581  

 

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 $2,267 and $3,848 as of November 1, 2024, and November 3, 2023, respectively. Future payments are approximately $1,531, $694, $33 and $9 for fiscal years 2025 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:

 

   November 1, 2024   November 3, 2023 
   (52 Weeks)   (53 Weeks) 
Interest cost  $38   $22 
Amortization of actuarial gain   (12)   (17)
Service cost   8    4 
Net periodic postretirement healthcare cost  $34   $9 

 

Weighted average assumptions for the fiscal years ended November 1, 2024, and November 3, 2023, are as follows:

 

   2024   2023 
Discount rate   5.16%   5.96%
Medical trend rate next year   7.00%   7.50%
Ultimate trend rate   5.00%   5.00%
Year ultimate trend rate is achieved   2028    2028 

 

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

 

   2024   2023 
Interest cost plus service cost  $9   $5 
Accumulated postretirement healthcare obligation  $156   $106 

 

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

 

   2024   2023 
Interest cost plus service cost  $(7)  $(4)
Accumulated postretirement healthcare obligation  $(122)  $(84)

 

 

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

 

   2024   2023 
Change in accumulated postretirement healthcare obligation:          
Healthcare obligation - beginning of year  $649   $426 
Interest cost   38    22 
Service cost   9    3 
Actuarial gain (loss)   180    230 
Benefits paid   (34)   (32)
Healthcare obligation – end of year  $842   $649 
           
Funded status of the plans   842    649 
Unrecognized net actuarial (loss) gain   (13)   33 
Unrecognized amounts recorded in other comprehensive income   13    (33)
Postretirement healthcare liability  $842   $649 

 

Expected payments for the postretirement benefits are as follows:

 

Fiscal Years   Postretirement
Healthcare Benefits		  
2025   $ 38  
2026   $ 38  
2027   $           39  
2028   $ 39  
2029-2033   $ 191  

 

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 2024 and 2023, we made total employer contributions to the 401K Plan in the amounts of $783 and $887, respectively.