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Deferred Compensation and Retirement Plans
 12 Months Ended
Apr. 30, 2024
Retirement Benefits [Abstract]  
Deferred Compensation and Retirement Plans Deferred Compensation and Retirement Plans
The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions.
The total benefit obligations for these plans were as follows:
Year Ended April 30,
20242023
(in thousands)
Deferred compensation and pension plans$262,403 $227,255 
Medical and Life Insurance plan4,227 4,838 
International retirement plans12,606 13,617 
Executive Capital Accumulation Plan204,537 178,043 
Total benefit obligation483,773 423,753 
Less: current portion of benefit obligation (1)
(43,377)(27,219)
Non-current benefit obligation$440,396 $396,534 
_______________________________
(1)Current portion of benefit obligation is included in Compensation and benefits payable in the consolidated balance sheet.
Deferred Compensation and Pension Plans
The EWAP was established in fiscal 1994, which replaced the WAP. Certain vice presidents elected to participate in a “deferral unit” that required the participant to contribute a portion of their compensation for an eight year period, or in some cases, make an after-tax contribution, in return for defined benefit payments from the Company over a fifteen year period at retirement age of 65 or later. Participants were able to acquire additional “deferral units” every five years. Vice presidents who did not choose to roll over their WAP units into the EWAP continue to be covered under the earlier version in which participants generally vest and commence receipt of benefit payments at retirement age of 65. In June 2003, the Company amended the EWAP and WAP, so as not to allow new participants or the purchase of additional deferral units by existing participants.
In conjunction with the acquisition of Hay Group, the Company acquired multiple pension and savings plans covering certain of its employees worldwide. Among these plans is a defined benefit pension plan for certain employees in the U.S. The assets of this plan are held separately from the assets of the sponsors in self-administered funds.
On July 8, 2016, the Company established the LTPU Plan in order to promote the success of the Company by providing a select group of management and highly compensated employees with nonqualified supplemental retirement benefits as an additional means to attract, motivate and retain such employees. A unit award has a base value of either $25,000 or $50,000 for the purpose of determining the payment that would be made upon early termination for a partially vested unit award. The units vest 25% on each anniversary date with the unit becoming fully vested on the fourth anniversary of the grant date, subject to the participant’s continued service as of each anniversary date. Each vested unit award will pay out an annual benefit of either $10,000, $12,500 or $25,000 for each of five years commencing on the seventh anniversary of the grant date.
Deferred Compensation and Pension Plans
The following tables reconcile the benefit obligation for the deferred compensation and pension plans:
Year Ended April 30,
20242023
(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year$246,340 $211,598 
Service cost43,879 40,843 
Interest cost13,447 9,511 
Actuarial gain(5,001)(6,083)
Administrative expenses paid(240)(168)
Benefits paid from plan assets(1,988)(1,901)
Benefits paid from cash(15,511)(7,460)
Benefit obligation, end of year280,926 246,340 
Change in fair value of plan assets:
Fair value of plan assets, beginning of year19,085 21,990 
Actual return on plan assets795 (836)
Benefits paid from plan assets(1,988)(1,901)
Administrative expenses paid(240)(168)
Employer contributions871 — 
Fair value of plan assets, end of year18,523 19,085 
Funded status and balance, end of year (1)
$(262,403)$(227,255)
Current liability$26,093 $15,447 
Non-current liability236,310 211,808 
Total liability$262,403 $227,255 
Plan Assets - weighted-average asset allocation:
Debt securities47 %44 %
Equity securities51 %52 %
Other2 %4 %
Total100 %100 %
_______________________________
(1)The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As the COLI contracts are held in trust and are not separated from our general corporate assets, they are not included in the funded status. As of April 30, 2024 and 2023, the Company held contracts with gross CSV of $295.9 million and $275.1 million, offset by outstanding policy loans of $77.0 million and $77.1 million, respectively.
The pension obligation in fiscal 2024 increased compared to fiscal 2023 due to the ongoing accruals for the LTPU Plan for additional awards issued in fiscal 2024. Additionally, the actual return on plan assets was lower than the expected return and this caused our funded position to decrease. The increase in pension benefit obligations was partially offset by the actuarial
gain which was primarily due to an increase in discount rates. The fair value measurements of the defined benefit plan assets fall within the following levels of the fair value hierarchy as of April 30, 2024 and 2023:
Level 1Level 2Level 3Total
(in thousands)
April 30, 2024:
Mutual funds$— $18,033 $— $18,033 
Money market funds490 — — 490 
Total$490 $18,033 $— $18,523 
April 30, 2023:
Mutual funds$— $18,350 $— $18,350 
Money market funds735 — — 735 
Total$735 $18,350 $— $19,085 
Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification and investment return over the long term. The investment goal is a return on assets that is at least equal to the assumed actuarial rate of return over the long term within reasonable and prudent levels of risk. Investment policies reflect the unique circumstances of the respective plans and include requirements designed to mitigate risk including quality and diversification standards. Asset allocation targets are reviewed periodically with investment advisors to determine the appropriate investment strategies for acceptable risk levels. Our target allocation ranges are as follows: equity securities 40% to 60% and debt securities 40% to 60%. We establish our estimated long‑term return on plan assets considering various factors, including the targeted asset allocation percentages, historic returns and expected future returns.
The components of net periodic benefits costs are as follows:
Year Ended April 30,
202420232022
(in thousands)
Service cost$43,879 $40,843 $37,952 
Interest cost13,447 9,511 4,028 
Amortization of actuarial loss818 945 2,170 
Net prior service credit amortization(97)(97)(97)
Expected return on plan assets(1,088)(1,156)(1,554)
Net periodic benefit cost (1)
$56,959 $50,046 $42,499 
_______________________________
(1)The service cost, interest cost and other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.
The weighted-average assumptions used in calculating the benefit obligations were as follows:
Year Ended April 30,
202420232022
Discount rate, beginning of year4.77 %4.08 %2.17 %
Discount rate, end of year5.55 %4.77 %4.08 %
Rate of compensation increase0.00 %0.00 %0.00 %
Expected long-term rates of return on plan assets6.00 %6.00 %5.50 %
Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:
Year Ending April 30,Deferred Retirement Plans
(in thousands)
2025$28,881 
202639,226 
202748,208 
202856,045 
202965,123 
2030-2034286,973 
Medical and Life Insurance Plan
In conjunction with the acquisition of Hay Group, the Company inherited a benefit plan which offers medical and life insurance coverage to 101 retired participants. The medical and life insurance benefit plan is closed to new entrants and is unfunded.
The following table reconciles the benefit obligation for the medical and life insurance plan:
Year End April 30,
20242023
(in thousands)
Change in benefit obligation:
Benefit obligation, beginning of year$4,838 $5,365 
Interest cost217 195 
Actuarial gain(321)(93)
Benefits paid(507)(629)
Benefit obligation, end of year$4,227 $4,838 
Current liability$535 $563 
Non-current liability3,692 4,275 
Total liability$4,227 $4,838 
The components of net periodic benefits costs are as follows:
Year Ended April 30,
202420232022
(in thousands)
Service cost$— $— $— 
Interest cost217 195 110 
Net prior service credit amortization
(308)(308)(308)
Amortization of actuarial gain(83)(74)— 
Net periodic benefit cost (1)
$(174)$(187)$(198)
_______________________________
(1)The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income (loss), net, respectively, on the consolidated statements of income.
The weighted-average assumptions used in calculating the medical and life insurance plan were as follows:
Year Ended April 30,
202420232022
Discount rate, beginning of year4.85 %4.25 %2.54 %
Discount rate, end of year5.62 %4.85 %4.25 %
Healthcare care cost trend rate6.50 %6.50 %6.00 %
Benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next ten years as follows:
Year Ending April 30,Medical and Life Insurance
(in thousands)
2025$551 
2026523 
2027483 
2028446 
2029419 
2030-20341,719 
International Retirement Plans
The Company also maintains various retirement plans and other miscellaneous deferred compensation arrangements in 25 foreign jurisdictions. The aggregate of the long-term benefit obligation accrued at April 30, 2024 and 2023 is $12.6 million for 3,752 participants and $13.6 million for 4,058 participants, respectively. The Company’s contribution to these plans was $17.2 million and $16.4 million in fiscal 2024 and 2023, respectively.
Executive Capital Accumulation Plan
The Company’s ECAP is intended to provide certain employees an opportunity to defer their salary and/or bonus on a pre-tax basis. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance. Certain key management may also receive Company ECAP contributions upon commencement of employment. The Company amortizes these contributions on a straight-line basis over the service period, generally a five-year period. Participants have the ability to allocate their deferrals among a number of investment options and may receive their benefits at termination, retirement or ‘in service’ either in a lump sum or in quarterly installments over one-to-15 years. The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying consolidated balance sheets.
The Company issued ECAP awards during fiscal 2024, 2023 and 2022 of $7.1 million, $6.5 million and $7.5 million, respectively.
The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During fiscal 2024 and 2023, the deferred compensation liability increased; therefore, the Company recognized a compensation expense of $29.5 million and $3.5 million, respectively. Offsetting the increase in compensation and benefits expense in fiscal 2024 and 2023 was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $29.8 million and $2.9 million in fiscal 2024 and 2023, respectively, recorded in other income (loss), net on the consolidated statements of income. During fiscal 2022, deferred compensation liability decreased; therefore, the Company recognized a reduction in compensation expense of $10.6 million. Offsetting the decrease in compensation and benefits expense in fiscal 2022 was a decrease in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $12.0 million in fiscal 2022, recorded in other income (loss), net on the consolidated statement of income.
Changes in ECAP liability were as follows:
Year Ended April 30,
20242023
(in thousands)
Balance, beginning of year$178,043 $166,723 
Employee contributions11,844 17,046 
Amortization of employer contributions7,017 5,886 
Gain on investment
29,492 3,464 
Employee distributions(21,668)(14,306)
Exchange rate fluctuations(191)(770)
Balance, end of year204,537 178,043 
Less: current portion(16,749)(11,209)
Non-current portion$187,788 $166,834 
As of April 30, 2024 and 2023, the unamortized portion of the Company contributions to the ECAP was $16.4 million and $16.1 million, respectively.
Defined Contribution Plan
The Company has a defined contribution plan (“401(k) plan”) for eligible employees. Participants may contribute up to 50% of their base compensation as defined in the plan agreement. In addition, the Company has the option to make matching contributions. Beginning in fiscal 2022, the Company began to match 10% of the employee contributions each pay period up to the IRS limit (excluding catch-up contributions) and then making an additional discretionary match after the fiscal year. The Company made $3.5 million in matching contributions during fiscal 2024. In addition, the Company intends to make an additional matching contribution relating to fiscal 2024 of $3.2 million in fiscal 2025, which are accrued in compensation and benefits payable on the consolidated balance sheet. The Company made $3.5 million matching contributions during fiscal 2023 and an additional $3.1 million matching contribution in fiscal 2024 related to contributions made by employees in fiscal 2023. The Company made $2.1 million matching contributions during fiscal 2022 and an additional $2.7 million matching contribution in fiscal 2023 related to contributions made by employees in fiscal 2022.
Company Owned Life Insurance
The Company purchased COLI contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. The gross CSV of these contracts of $295.9 million and $275.1 million as of April 30, 2024 and 2023, respectively, is offset by outstanding policy loans of $77.0 million and $77.1 million in the accompanying consolidated balance sheets as of April 30, 2024 and 2023, respectively. Total death benefits payable, net of loans under COLI contracts, were $447.3 million and $444.1 million at April 30, 2024 and 2023, respectively. Management intends to use the future death benefits from these insurance contracts to fund the deferred compensation and pension arrangements; however, there may not be a direct correlation between the timing of the future cash receipts and disbursements under these arrangements. The CSV of the underlying COLI investments increased by $8.8 million, $10.6 million and $5.8 million during fiscal 2024, 2023 and 2022, respectively, recorded as a decrease in compensation and benefits expense. Certain of the policies are held in trusts to provide additional benefit security for the deferred compensation and pension plans. As of April 30, 2024, COLI contracts with a net CSV of $190.2 million and death benefits, net of loans, of $392.5 million were held in trust for these purposes.