v2.4.0.6
Employee Retirement Plans
 12 Months Ended
Jun. 30, 2012
Employee Retirement Plans [Abstract]  
Employee Retirement Plans
(11) Employee Retirement Plans

The Company maintains a tax qualified pension plan, the Associates’ Retirement Plan (“ARP”). The Company intends to fund the minimum amounts required under the Employee Retirement Income Security Act of 1974 (ERISA). The Company also sponsors a tax nonqualified pension plan, the Supplemental Retirement Plan (“SRP”), for certain officers and other key employees as designated by R.G. Barry Corporation’s Board of Directors. The SRP is unfunded, noncontributory and provides for the payment of monthly retirement benefits. Benefits are based on a formula applied to the recipients’ final average monthly compensation, reduced by a certain percentage of their social security benefits. For certain participants, the SRP provides an alternative benefit formula for years worked past the normal retirement age assumed by the SRP. Effective as of close of business on March 31, 2004, both the ARP and SRP were frozen.

The funded status of the ARP and the SRP and the accrued retirement costs, measured on June 30, 2012 and July 2, 2011, respectively, were:

 

                                 
    ARP     SRP  
    2012     2011     2012     2011  

Change in projected benefit obligation:

                                

Benefit obligation at the beginning of the year

   $ 32,778     $ 33,139     $ 7,620     $ 7,650  

Interest cost

     1,644       1,606       379       367  

Actuarial loss

     3,675       334       397       290  

Benefits paid

     (2,376 )      (2,301 )      (686 )      (687 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Benefit obligation at the end of the year

   $ 35,721     $ 32,778     $ 7,710     $ 7,620  
   

 

 

    

 

 

    

 

 

    

 

 

  

Change in plan assets:

                                

Fair value of plan assets at the beginning of the year

   $ 29,238     $ 21,988     $ —       $ —    

Actual return on plan assets

     2,639       5,608       —         —    

Contributions

     3,286       4,155       686       687  

Expenses

     (177 )      (212 )      —         —    

Benefits paid

     (2,376 )      (2,301 )      (686 )      (687 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Fair value of plan assets at end of the year

   $ 32,610     $ 29,238     $ —       $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Funded status at end of the year

   $ (3,111 )    $ (3,540 )    $ (7,710 )    $ (7,620 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Current liabilities

   $ —       $ —       $ (655 )    $ (685 ) 

Noncurrent liabilities

     (3,111 )      (3,540 )      (7,055 )      (6,935 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Net pension liability at end of year

   $ (3,111 )    $ (3,540 )    $ (7,710 )    $ (7,620 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Amounts recognized in accumulated other comprehensive loss-pretax

                                

Prior service costs

   $ —       $ —       $ —       $ 13  

Net actuarial loss

     15,034       13,187       2,350       2,039  
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance in accumulated other comprehensive loss at end of year-pretax

   $ 15,034     $ 13,187     $ 2,350     $ 2,052  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

 

                                 
    ARP     SRP  
    2012     2011     2012     2011  

Other changes in plan assets and benefit obligations recognized in other comprehensive loss-pretax

                

Net actuarial loss (gain)

   $ 3,139     $ (3,019 )    $ 397     $ 290  

Amortization of:

                                

Prior service cost

     —         —         (13 )      (42 ) 

Net actuarial losses

     (1,292 )      (1,149 )      (85 )      (70 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Total recognized in comprehensive loss (income)

   $ 1,847     $ (4,168 )    $ 299     $ 178  
   

 

 

    

 

 

    

 

 

    

 

 

  

Actuarial gains and losses on assets reflects the differences between expected and actual rates of return on pension plan assets. Actuarial gains and losses on pension obligations primarily reflects the effect of changes in discount rate on the measure of pension liabilities at the end of each fiscal year and demographic differences between actual and projected mortality and other factors. The actuarial loss reported for pension obligations in fiscal 2012 reflects primarily the decrease of 106 basis points in the discount rate from the end of fiscal 2011 to fiscal 2012. The estimated net actuarial loss and prior service cost for the defined benefit plans that will be amortized from accumulated OCI into net periodic benefit cost during fiscal 2013 are $1,699 and $100, respectively.

At June 30, 2012, expected benefit payments to plan participants in the ARP and the SRP for each of the next five years and the five-year period thereafter in the aggregate are:

 

                 
    ARP     SRP  

2013

   $ 2,383     $ 655  

2014

     2,394       657  

2015

     2,384       690  

2016

     2,385       682  

2017

     2,377       669  

2018-2022

     11,805       3,066  

 

                         
    2012     2011     2010  

Weighted average assumptions used to determine net costs for both the ARP and the SRP:

                        

Discount rate

     5.20 %      5.02 %      6.42 % 

Rate of compensation increase

     —         —         4.00 % 

Expected return on plan assets

     6.75 %      7.90 %      8.25 % 
       

Components of Net Periodic Benefit Cost:

                        

Service cost

   $ —       $ —       $ 9  

Interest cost

     2,023       1,974       2,285  

Expected return on plan assets

     (1,926 )      (2,043 )      (1,973 ) 

Net amortization

     1,390       1,261       693  

Settlement expense

     —         —         185  
   

 

 

    

 

 

    

 

 

  

Total pension expense

   $ 1,487     $ 1,192     $ 1,199  
   

 

 

    

 

 

    

 

 

  

 

                         
    2012     2011     2010  

Weighted average assumptions used to determine benefit obligations:

                        

Discount rate

     4.14 %      5.20 %      5.02 % 

The ARP is funded on a periodic basis as required under ERISA/IRS guidelines. The general principles guiding investment of pension plan assets are those embodied under ERISA. These principles include discharging the Company’s investment responsibilities for the exclusive benefit of plan participants and in accordance with the “prudent expert” standards and other ERISA rules and regulations. Investment objectives for the Company’s pension plan assets are to optimize the long-term return on plan assets while maintaining an acceptable level of risk, diversify assets among asset classes and investment styles and maintain a long-term focus. The plan asset allocation shown below is consistent with the Company’s investment policy objectives and reflects the ongoing transition of the asset portfolio from an equity-based investment portfolio to a debt-security investment portfolio. This change over time is designed to better match assets and anticipated cash outflows with the underlying future expected payment streams associated with the Company’s ARP obligation. With the assistance of a consulting firm, the plan fiduciaries are responsible for selecting investment managers, setting asset allocation targets and monitoring asset allocation and investment performance.

The qualified plan assets invested as of the measurement date for fiscal 2012 and fiscal 2011were as follows:

 

                 
    2012     2011  

Cash and equivalents

     2 %      3 % 

Domestic equities

     18 %      23 % 

Domestic fixed income securities

     65 %      56 % 

Foreign equities

     15 %      18 % 

Hedge funds

     0 %      0 % 
   

 

 

    

 

 

  

Total pension plan assets invested

     100 %      100 % 
   

 

 

    

 

 

  

 

The table below highlights assets held in trust in the ARP, and the fair value categories applicable to the various investments held at June 30, 2012:

 

                                 
          Fair Value Measurements at Reporting Date Using:  
    Carrying
Amount		     Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Assets:

                                

Cash and equivalents

   $ 762     $ 762     $ —       $ —    

Domestic equities

     5,833       5,833       —         —    

Domestic fixed income securities

     21,231       21,231       —         —    

Foreign equities

     4,784       4,784       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total pension plan assets

   $ 32,610     $ 32,610     $ —       $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

The table below highlights assets held in trust in the ARP, and the fair value categories applicable to the various investments held at July 2, 2011:

 

                                 
          Fair Value Measurements at Reporting Date Using:  
    Carrying
Amount		     Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Assets:

                                

Cash and equivalents

   $ 864     $ 864     $ —       $ —    

Domestic equities

     6,679       6,679       —         —    

Domestic fixed income securities

     16,415       16,415       —         —    

Foreign equities

     5,280       5,280       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Total pension plan assets

   $ 29,238     $ 29,238     $ —       $ —    
   

 

 

    

 

 

    

 

 

    

 

 

  

The expected return on plan assets used in the pension computations for the qualified ARP is based on management’s best judgment of future anticipated performance of those invested assets based on past long-term experience and judgment on how future long-term performance will occur.

 

The Company’s SRP is unfunded and payments, as required, are made when due from the Company’s general funds. In fiscal 2013, the Company anticipates total payments and qualified plan contributions of $1,522 related to its SRP and ARP.

The discount rate was determined based on an analysis of interest rates for high-quality, long-term corporate debt at each measurement date. In order to appropriately match the bond maturities with expected future cash payments, the Company utilizes differing bond portfolios to estimate the discount rates for the defined benefit plans. The weighted average discount rate used to determine the defined benefit plans obligation as of the balance sheet date is the rate in effect at the measurement date. The same rate is also used to determine the defined benefit plans expense for the following fiscal year.

The Company sponsors a 401(k) plan for all its eligible salaried and non-salaried employees. Effective January 1, 2005, the Company adopted a 3% non-contributory Safe Harbor 401 provision for all eligible plan participants. The Company’s contributions in cash to the 401(k) plan were $269, $267 and $375 for fiscal 2012, fiscal 2011 and fiscal 2010, respectively.