Note 10 - Post-employment Benefit Obligations

12 Months Ended

Nov. 30, 2024

Notes to Financial Statements

Postemployment Benefits Disclosure [Text Block]

10. Post-Employment Benefit Obligations

Management Savings Plan

On May 1, 2017, our Board of Directors, upon the recommendation of the Organization, Compensation and Nominating Committee (the “Committee”), adopted the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Plan”). The Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.

The Plan is an account-based plan under which (i) participants may defer voluntarily the payment of current compensation to future years (“participant deferrals”) and (ii) the Company may make annual awards to participants payable in future years (“Company contributions”). The Plan permits each participant to defer up to 75% of base salary and up to 100% of any incentive compensation or other bonus, which amounts would be credited to a deferral account established for the participant. Such deferrals will be fully vested at the time of the deferral. Participant deferrals will be indexed to one or more deemed investment alternatives chosen by the participant from a range of alternatives made available under the Plan. Each participant’s account will be adjusted to reflect gains and losses based on the performance of the selected investment alternatives. A participant may receive distributions from the Plan: (1) upon separation from service, in either a lump sum or annual installment payments over up to a 15 year period, as elected by the participant, (2) upon death or disability, in a lump sum, or (3) on a date or dates specified by the participant (“scheduled distributions”) with such scheduled payments made in either a lump sum or substantially equal annual installments over a period of up to five years, as elected by the participant. Participant contributions commenced during the third quarter of fiscal 2017. Company contributions will vest in full (1) on the third anniversary of the date such amounts are credited to the participant’s account, (2) the date that the participant reaches age 63 or (3) upon death or disability. Company contributions are subject to the same rules described above regarding the crediting of gains or losses from deemed investments and the timing of distributions. Expense (credits) associated with deferred compensation under the Plan was $925, $46 and $(16) for fiscal 2024, 2023 and 2022, respectively. Our liability for Company contributions and participant deferrals at November 30, 2024 and November 25, 2023 was $3,486 and $2,661, respectively, and is included in post-employment benefit obligations in our consolidated balance sheets.

On May 2, 2017, we made Long Term Cash Awards (“LTC Awards”) totaling $2,000 under the Plan to certain management employees in the amount of $400 each. The LTC Awards vest in full on the first anniversary of the date of the award if the participant has reached age 63 by that time, or, if later, on the date the participant reaches age 63, provided in either instance that the participant is still employed by the Company at that time. If not previously vested, the awards will also vest immediately upon the death or disability of the participant prior to the participant’s separation from service. The awards will be payable in 10 equal annual installments following the participant’s death, disability or separation from service. We are accounting for the LTC Awards as a defined benefit pension plan. During fiscal 2024, 2023 and 2022, we invested $343, $1,019 and $853 in life insurance policies covering all participants in the Plan. At November 30, 2024, these policies have a net death benefit of $15,885 for which the Company is the sole beneficiary. These policies are intended to provide a potential source of funds to meet the obligations arising from the deferred compensation and LTC Awards under the Plan and serve as an economic hedge of the financial impact of changes in the liabilities. They are held in an irrevocable trust but are subject to claims of creditors in the event of the Company’s insolvency.

Supplemental Retirement Income Plan

We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives. Upon retirement, the Supplemental Plan provides for lifetime monthly payments in an amount equal to 65% of the participant’s final average compensation as defined in the Supplemental Plan, which is reduced by certain social security benefits to be received and other benefits provided by us. The Supplemental Plan also provides a death benefit that is calculated as (a) prior to retirement death, which pays the beneficiary 50% of final average annual compensation for a period of 120 months, or (b) post-retirement death, which pays the beneficiary 200% of final average compensation in a single payment. We own life insurance policies on these executives with a current net death benefit of $1,587 at November 30, 2024. We expect that any death benefit payable out of the plan would be substantially offset by the proceeds received from our life insurance policy upon the death of the executive. Funding for the remaining cash flows is expected to be provided through operations. There are no benefits payable as a result of a termination of employment for any reason other than death or retirement, other than a change of control provision which provides for the immediate vesting and payment of the retirement benefit under the Supplemental Plan in the event of an employment termination resulting from a change of control.

Aggregated summarized information for the Supplemental Plan and the LTC Awards, measured as of the end of each year presented, is as follows:

`	2024			2023
Change in Benefit Obligation:
Projected benefit obligation at beginning of year	$	6,979		$	7,262
Service cost		13			27
Interest cost		391			370
Actuarial (gains) and losses		(170	)		(424	)
Benefits paid		(296	)		(256	)
Projected benefit obligation at end of year	$	6,917		$	6,979
Accumulated Benefit Obligation	$	6,917		$	6,979
Discount rate used to value the ending benefit obligations:		5.00	%		5.92	%
Amounts recognized in the consolidated balance sheet:
Current liabilities	$	792		$	719
Noncurrent liabilities		6,085			6,260
Total amounts recognized	$	6,877		$	6,979
Amounts recognized in accumulated other comprehensive income: before income tax effects:
Prior service cost	$	-		$	103
Actuarial (gain) loss		(1,066	)		(965	)
Net amount recognized	$	(1,066	)	$	(862	)
Total recognized in net periodic benefit cost and accumulated other comprehensive income:	$	234		$	(27	)

	2024			2023		2022
Components of Net Periodic Pension Cost:
Service cost	$	13		$	27	$	36
Interest cost		391			370		231
Amortization of prior service cost		61			125		126
Amortization of other loss		(22	)		-		133
Net periodic pension cost	$	443		$	522	$	526

Assumptions used to determine net periodic pension cost:
Discount rate	5.92	%	5.38	%	2.25	%
Increase in future compensation levels	3.00	%	3.00	%	3.00	%

Estimated Future Benefit Payments (with mortality):
Fiscal 2025	$	792
Fiscal 2026		794
Fiscal 2027		791
Fiscal 2028		749
Fiscal 2029		709
Fiscal 2030 through 2034		2,864

Of the $1,066 net gain recognized in accumulated other comprehensive income at November 30, 2024, $65 of amortization is expected to be recognized as a component of net periodic pension cost during fiscal 2025.

The components of net periodic pension cost other than the service cost component are included in other loss, net in our consolidated statements of operations.

Deferred Compensation Plan

We have an unfunded Deferred Compensation Plan that covers one current and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or benefits permitted. We recognized expense of $79, $204, and $154 in fiscal 2024, 2023, and 2022, respectively, associated with the plan. Our liability under this plan was $1,568 and $1,655 as of November 30, 2024 and November 25, 2023, respectively. The non-current portion of this obligation is included in post-employment benefit obligations in our consolidated balance sheets, with the current portion included in accrued compensation and benefits.

Defined Contribution Plan

We have a qualified defined contribution plan (Employee Savings/Retirement Plan) that covers substantially all employees who elect to participate and have fulfilled the necessary service requirements. Employee contributions to the Plan are matched at the rate of 25% of up to 8% of gross pay, regardless of years of service. Expense for employer matching contributions was $943, $998 and $1,108 during fiscal 2024, 2023 and 2022, respectively.