Benefit Plans

12 Months Ended

Feb. 01, 2020

The Company has a retirement plan with a 401(k)-salary deferral feature for eligible employees. Under the terms of the plan, eligible employees could contribute up to the lesser of $19,000 ($25,000 if at least 50 years of age) or 75% of eligible pay. Eligible employees with 1 year of service, who elect to participate in the plan or are auto-enrolled, receive a Company matching contribution. Company matching contributions are calculated on the eligible employee's first 6% of elective deferrals with the first 1% being matched 100% and the next 5% being matched 50%. The Company matching contributions are used to purchase Class A Common Stock of the Company for the benefit of the employee. This stock may be immediately diversified into any of the other funds within the plan at the election of the employee. The terms of the plan provide a two-year vesting schedule for the Company matching contribution portion of the plan.

The Company incurred benefit plan expense of approximately $19 million for each of fiscal years 2019 and 2018 and $18 million for fiscal 2017. Benefit plan expenses are included in selling, general and administrative expenses.

The Company has an unfunded, nonqualified defined benefit plan ("Pension Plan") for its officers. The Pension Plan is noncontributory and provides benefits based on years of service and compensation during employment. Pension expense is determined using an actuarial cost method to estimate the total benefits ultimately payable to officers and allocates this cost to service periods. The actuarial assumptions used to calculate pension costs are reviewed annually. The service cost component of net periodic benefit costs is included in selling, general and administrative expenses, and the interest costs and net actuarial loss components are included in other expense in the consolidated statements of income.

The accumulated benefit obligations, change in projected benefit obligation, change in Pension Plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets are as follows:



(in thousands of dollars)	February 1, 2020			February 2, 2019
Change in benefit obligation:
Benefit obligation at beginning of year	$	193,865		$	194,733
Service cost	3,621			3,687
Interest cost	7,667			7,131
Actuarial loss (gain)	24,137			(6,294		)
Benefits paid	(5,554		)	(5,392		)
Benefit obligation at end of year	$	223,736		$	193,865
Change in Pension Plan assets:
Fair value of Pension Plan assets at beginning of year	$	—		$	—
Employer contribution	5,554			5,392
Benefits paid	(5,554		)	(5,392		)
Fair value of Pension Plan assets at end of year	$	—		$	—
Funded status (Pension Plan assets less benefit obligation)	$	(223,736	)	$	(193,865	)
Amounts recognized in the balance sheets:
Accrued benefit liability	$	(223,736	)	$	(193,865	)
Net amount recognized	$	(223,736	)	$	(193,865	)
Pretax amounts recognized in accumulated other comprehensive loss:
Net actuarial loss	$	41,017		$	16,880
Prior service cost	—			—
Net amount recognized	$	41,017		$	16,880

Accumulated benefit obligation at end of year	$	(218,277	)	$	(192,982	)

The accrued benefit liability is included in other liabilities. At February 1, 2020 and February 2, 2019, the current portion of the accrued benefit liability of $5.5 million and $5.3 million, respectively, is included in trade accounts payable and accrued expenses.

The increase in the benefit obligation from February 2, 2019 to February 1, 2020 was primarily related to the decrease in the discount rate of 2.8% as of February 1, 2020 from 4.0% as of February 2, 2019, which is included in the actuarial loss of $24.1 million.

The discount rate that the Company utilizes for determining future pension obligations is based on the FTSE Above Median Pension Index Curve on its annual measurement date as of the end of each fiscal year and is matched to the future expected cash flows of the benefit plans by annual periods. The discount rate decreased to 2.8% as of February 1, 2020 from 4.0% as of February 2, 2019. Weighted average assumptions are as follows:



	Fiscal 2019		Fiscal 2018		Fiscal 2017
Discount rate—net periodic pension cost	4.0	%	3.7	%	4.0	%
Discount rate—benefit obligations	2.8	%	4.0	%	3.7	%
Rate of compensation increases	2.0	%	2.0	%	2.0	%

The components of net periodic benefit costs are as follows:



(in thousands of dollars)	Fiscal 2019		Fiscal 2018			Fiscal 2017
Components of net periodic benefit costs:
Service cost	$	3,621	$	3,687		$	3,494
Interest cost	7,667		7,131			7,229
Net actuarial loss	—		529			—
Amortization of prior service cost	—		—			—
Plan curtailment gain	—		—			—
Net periodic benefit costs	$	11,288	$	11,347		$	10,723
Other changes in benefit obligations recognized in other comprehensive loss (income):
Net actuarial loss (gain)	$	24,137	$	(6,823	)	$	5,701
Amortization of prior service cost	—		—			—
Total recognized in other comprehensive loss (income)	$	24,137	$	(6,823	)	$	5,701
Total recognized in net periodic benefit costs and other comprehensive income or loss	$	35,425	$	4,524		$	16,424

The estimated future benefits payments for the nonqualified benefit plan are as follows:



(in thousands of dollars)
Fiscal Year
2020	$	5,545	*
2021	5,826
2022	7,803
2023	8,486
2024	8,779
2025- 2029	80,664
Total payments for next ten fiscal years	$	117,103

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* The estimated benefit payment for fiscal 2020 also represents the amount the Company expects to contribute to the Pension Plan for fiscal 2020.