EMPLOYEE BENEFIT PLANS

12 Months Ended

Jan. 31, 2021

Retirement Benefits [Abstract]

Retirement Benefits [Text Block]

NOTE 13 – EMPLOYEE BENEFIT PLANS

Employee Savings Plans

We sponsor a tax-qualified 401(k) retirement plan covering substantially all employees. This plan assists employees in meeting their savings and retirement planning goals through employee salary deferrals and discretionary employer matching contributions. Our contributions to the plan amounted to $1.3 million in fiscal 2021, $1.4 million in fiscal 2020, and $1.3 million in fiscal 2019.

We adopted ASU 2017-07 as of the beginning of our 2019 fiscal year on January 29, 2018. Components of net periodic benefit cost other than the service cost for the SRIP, SERP and the Pension Plan are included in the line item “Other income, net” in our consolidated statements of operations. Service cost is included in our consolidated statements of operations under “Selling and administrative expenses.” The adoption resulted in the reclassification of a $30,000 gain from Selling and administrative expenses to Other income, net in fiscal 2018 consolidated statements of operations.

Executive Benefits

Pension, SRIP and SERP Overview

We maintain two “frozen” retirement plans, which are paying benefits and may include active employees among the participants but we do not expect to add participants to these plans in the future. The two plans include:

■ a supplemental retirement income plan (“SRIP”) for certain former and current executives of Hooker Furniture Corporation; and

■ the Pulaski Furniture Corporation Supplemental Executive Retirement Plan (“SERP”) for certain former executives.

In January 2019, we terminated the Pulaski Furniture Corporation Pension Plan (“Pension Plan”) settled all the obligations in fiscal 2020 which was also frozen and had been frozen since we acquired it in the Home Meridian acquisition.

SRIP and SERP

The SRIP provides monthly payments to participants or their designated beneficiaries based on a participant’s “final average monthly earnings” and “specified percentage” participation level as defined in the plan, subject to a vesting schedule that may vary for each participant. The benefit is payable for a 15-year period following the participant’s termination of employment due to retirement, disability or death. In addition, the monthly retirement benefit for each participant, regardless of age, becomes fully vested and the present value of that benefit is paid to each participant in a lump sum upon a change in control of the Company as defined in the plan. The SRIP is unfunded and all benefits are payable solely from our general assets. The plan liability is based on the aggregate actuarial present value of the vested benefits to which participating employees are currently entitled but based on the employees’ expected dates of separation or retirement. No employees have been added to the plan since 2008 and we do not expect to add additional employees in the future, due to changes in our compensation philosophy, which emphasizes more performance-based compensation measures in total management compensation.

The SERP provides monthly payments to eight retirees or their designated beneficiaries based on a defined benefit formula as defined in the plan.  The benefit is payable for the life of the retiree with the following forms available as a reduced monthly benefit: Ten-year Certain and Life; 50% or 100% Joint and Survivor Annuity. The SERP is unfunded and all benefits are payable solely from our general assets. The plan liability is based on the aggregate actuarial present value of the benefits to which retired employees are currently entitled. No employees have been added to the plan since 2006 and we do not expect to add additional employees in the future.

Summarized SRIP and SERP information as of each fiscal year-end (the measurement date) is as follows:

	SRIP (Supplemental Retirement Income Plan)
	Fifty-Two			Fifty-Two
	Weeks Ended			Weeks Ended
	January 31,			February 2,
	2021			2020
Change in benefit obligation:
Beginning projected benefit obligation	$	10,256		$	9,622
Service cost		128			104
Interest cost		249			351
Benefits paid		(591	)		(537	)
Actuarial loss		530			716
Ending projected benefit obligation (funded status)	$	10,572		$	10,256
Accumulated benefit obligation	$	10,421		$	10,131
Discount rate used to value the ending benefit obligations:		1.75	%		2.50	%
Amount recognized in the consolidated balance sheets:
Current liabilities (Accrued salaries, wages and benefits line)	$	877		$	557
Non-current liabilities (Deferred compensation line)		9,695			9,699
Total	$	10,572		$	10,256

	Fifty-Two			Fifty-Two			Fifty-Three
	Weeks Ended			Weeks Ended			Weeks Ended
	January 31,			February 2,			February 3,
	2021			2020			2019
Net periodic benefit cost
Service cost	$	128		$	104		$	326
Interest cost		249			351			341
Net loss		338			149			172
Net periodic benefit cost	$	715		$	604		$	839
Other changes recognized in accumulated other comprehensive income
Net loss arising during period		530			716			101
Amortizations:
Loss		(338	)		(149	)		(172	)
Total recognized in other comprehensive loss (income)		192			567			(71	)
Total recognized in net periodic benefit cost and       accumulated other comprehensive income	$	907		$	1,171		$	768
Assumptions used to determine net periodic benefit cost:
Discount rate		2.50	%		3.75	%		3.75	%
Increase in future compensation levels		4.00	%		4.00	%		4.00	%

Estimated Future Benefit Payments:
Fiscal 2022	$	877
Fiscal 2023		877
Fiscal 2024		958
Fiscal 2025		958
Fiscal 2026		958
Fiscal 2027 through fiscal 2031		4,066

For the SRIP, the discount rate used to determine the fiscal 2021 net periodic cost was 2.5%, based on the Mercer yield curve and the plan’s expected benefit payments. At January 31, 2021, combining the Mercer yield curve and the plan's expected benefit payments resulted in a rate of 1.75%. This rate was used to value the ending benefit obligations.

At January 31, 2021, the actuarial losses related to the SRIP amounted to $530,000, net of tax of $338,000. At February 2, 2020, the actuarial losses related to the SRIP amounted to $716,000, net of tax of $149,000. The estimated actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the 2022 fiscal year is $401,622. There is no expected prior service (cost) or credit amortization.

	SERP (Supplemental Executive Retirement Plan)
	Fifty-Two			Fifty-Two
	Weeks Ended			Weeks Ended
	January 31,			February 2,
	2021			2020
Change in benefit obligation:
Beginning projected benefit obligation	$	1,860		$	1,805
Service cost		-			-
Interest cost		46			67
Benefits paid		(158	)		(180	)
Actuarial (gain)/loss		(67	)		168
Ending projected benefit obligation (funded status)	$	1,681		$	1,860
Accumulated benefit obligation	$	1,681		$	1,860
Discount rate used to value the ending benefit obligations:		2.10	%		2.60	%
Amount recognized in the consolidated balance sheets:
Current liabilities (Accrued salaries, wages and benefits line)	$	156		$	172
Non-current liabilities (Deferred compensation line)		1,525			1,688
Total	$	1,681		$	1,860

	Fifty-Two			Fifty-Two			Fifty-Three
	Weeks Ended			Weeks Ended			Weeks Ended
	January 31,			February 2,			February 3,
	2021			2020			2019
Net periodic benefit cost
Service cost	$	-		$	-		$	-
Interest cost		46			67			70
Net gain		-			(5	)		-
Net periodic benefit cost	$	46		$	62		$	70
Other changes recognized in accumulated other comprehensive income
Net (gain)/loss arising during period		(67	)		168			(88	)
Amortizations:
Gain (Loss)		-			5			-
Total recognized in other comprehensive loss (income)		(67	)		173			(88	)
Total recognized in net periodic benefit cost and
accumulated other comprehensive income	$	(21	)	$	235		$	(18	)
Assumptions used to determine net periodic benefit cost:
Discount rate		2.60	%		3.90	%		3.64	%
Increase in future compensation levels		N/A			N/A			N/A

Estimated Future Benefit Payments:
Fiscal 2022	$	156
Fiscal 2023		151
Fiscal 2024		146
Fiscal 2025		141
Fiscal 2026		135
Fiscal 2027 through fiscal 2031		573

For the SERP, the discount rate assumption used to measure the projected benefit obligations is set by reference to a certain hypothetical AA-rated corporate bond spot-rate yield curve constructed by our actuary, Aon (“Aon”). This yield curve was constructed from the underlying bond price and yield data collected as of the Plan’s measurement date and is represented by a series of annualized, individual discount rates with durations ranging from six months to seventy-five years. Aon then applies the spot rates of the yield curve to the actuarially projected cash flow patterns to derive the appropriate single effective discount rate. At February 2, 2020, the plan used 2.60% based on rounding the Aon AA Above Median yield curve as of January 31, 2019. This rate was used to determine the fiscal 2021 net periodic cost. At January 31, 2021, combining the Aon AA Above Median yield curve and the plan's expected benefit payments created a rate of 2.10%. This rate was used to value the ending benefit obligations.

At January 31, 2021, the actuarial gain related to the SERP was $67,000. At February 2, 2020, the actuarial loss related to the SERP was $168,000. The estimated net transition (asset)/obligation, prior service (cost) credit and actuarial loss that will be amortized from accumulated other comprehensive income into net periodic benefit cost over fiscal 2020 are immaterial.

The Pension Plan

On January 30, 2019, our Board of Directors voted to terminate the Pension Plan. We settled all Pension Plan obligations during the third quarter of fiscal 2020 with the purchase of nonparticipating annuity contracts for plan participants.

Summarized Pension Plan information as of February 2, 2020 is as follows:

Pulaski Furniture Pension Plan
	Fifty-Two
	Weeks Ended
	February 2,
	2020
Change in benefit obligation:
Beginning projected benefit obligation	$	10,906
Acquisition
Service cost		-
Interest cost		303
Benefits paid		(522	)
Settlement		(12,557	)
Actuarial loss		1,870
Ending projected benefit obligation	$	-
Change in Plan Assets:
Beginning fair value of plan assets	$	10,992
Actual return on plan assets		1,960
Employer contributions		344
Actual expenses paid		(217	)
Settlement		(12,557	)
Actual benefits paid		(522	)
Ending fair value of plan assets	$	-
Funded Status of the Plan	$	-
Discount rate used to value the ending benefit obligations:		N/A
Amount recognized in the consolidated balance sheets:
Current liabilities (Accrued salaries, wages and benefits line)	$	-
Non-current liabilities (Deferred compensation line)		-
Net Asset/(Liability)	$	-

	Fifty-Two			Fifty-Three
	Weeks Ended			Weeks Ended
	February 2,			February 3,
	2020			2019
Net periodic benefit cost
Expected administrative expenses	$	105		$	280
Interest cost		303			415
Net  gain		(305	)		(575	)
Net periodic benefit cost	$	103		$	120
Settlement/Curtailment Income		(193	)
Total net periodic benefit cost (Income)	$	(90	)	$	120
Other changes recognized in other comprehensive income
Net (gain) loss arising during period		327			464
Amortization:
Gain		193			-
Total recognized in other comprehensive  (income) loss		520			464
Total recognized in net periodic benefit cost and    accumulated other comprehensive income	$	430		$	584
Assumptions used to determine net periodic benefit cost:
Discount rate		3.8	%		3.82	%
Increase in future compensation levels		N/A			N/A