NOTE 8 – PENSION AND PROFIT SHARING PLANS

Pension Plans - Syms sponsored a defined benefit pension plan for certain eligible employees not covered under a collective bargaining agreement. The pension plan was frozen effective December 31, 2006. As of December 31, 2016 and December 31, 2015, we had a recorded liability of $3.4 million and $3.1 million, respectively, which is included in pension liabilities on the accompanying consolidated balance sheets. This liability represents the estimated cost to us of terminating the plan in a standard termination, which would require us to make additional contributions to the plan so that the assets of the plan are sufficient to satisfy all benefit liabilities.

We had contemplated other courses of action, including a distress termination, whereby the Pension Benefits Guaranty Corporation (“PBGC”) would take over the plan. On February 27, 2012, Syms notified the PBGC and other affected parties of its consideration to terminate the plan in a distress termination. However, the estimated total cost associated with a distress termination was approximately $15 million. As a result of the cost savings associated with the standard termination approach, Syms elected not to terminate the plan in a distress termination and formally notified the PBGC of this decision. We will maintain the Syms pension plan and make all contributions required under applicable minimum funding rules; provided, however, that we may terminate the Syms pension plan from and after January 1, 2017. In the event that we terminate the Syms pension plan, we intend that any such termination shall be a standard termination. Although we have accrued the liability associated with a standard termination, we have not taken any steps to commence such a termination and have made no commitment to do so by a certain date.

In accordance with minimum funding requirements and court ordered allowed claims distributions, we paid approximately $3.6 million to the Syms sponsored plan from September 17, 2012 through December 31, 2016 of which $0.6 million was funded during the year ended December 31, 2016 to the Syms sponsored plan.

Presented below is financial information relating to this plan for the periods indicated (dollars in thousands):

			Period from
			March 1, 2015
	Year Ended		through
	December 31, 2016		December 31, 2015

CHANGE IN BENEFIT OBLIGATION:
Net benefit obligation - beginning of period	$	13,394	$	13,333
Interest cost		653		538
Actuarial loss		867		52
Gross benefits paid		(636)		(529)
Net benefit obligation - end of period	$	14,278	$	13,394

CHANGE IN PLAN ASSETS:
Fair value of plan assets - beginning of period	$	10,254	$	10,423
Employer contributions		575		631
Gross benefits paid		(636)		(529)
Actual return (loss) on plan assets		696		(271)
Fair value of plan assets - end of period	$	10,889	$	10,254

Funded status at end of period	$	(3,389)	$	(3,140)

The pension expense includes the following components (dollars in thousands):

				Period from
				March 1,
	Year Ended			2015 through
	December 31, 2016			December 31, 2015

COMPONENTS OF NET PERIODIC COST:
Interest cost	$	653		$	538
(Gain) loss of assets		(696)			271
Amortization of loss		478			454
Net periodic cost	$	435		$	1,263

WEIGHTED-AVERAGE ASSUMPTION USED:
Discount rate		5.0	%		5.0	%
Rate of compensation increase		0.0	%		0.0	%

The expected long-term rate of return on plan assets was 6% for both the year ended December 31, 2016 and the period from March 1, 2015 through December 31, 2015.

As of December 31, 2016 the benefits expected to be paid in the next five fiscal years and then in the aggregate for the five fiscal years thereafter are as follows (dollars in thousands):

Year	Amount

2017	$	807
2018		918
2019		932
2020		940
2021		969
2022-2026		4,678

The fair values and asset allocation of our plan assets as of December 31, 2016 and December 31, 2015 and the target allocation for fiscal 2016, by asset category, are presented in the following table. All fair values are based on quoted prices in active markets for identical assets (Level 1 in the fair value hierarchy) (dollars in thousands):

		December 31, 2016					December 31, 2015
				% of Plan					% of Plan
Asset Category	Asset Allocation	Fair Value		Assets			Fair Value		Assets

Cash and equivalents	0% to 10%	$	648		6	%	$	932		9	%
Equity securities	40% to 55%		5,871		54	%		5,295		52	%
Fixed income securities	35% to 50%		4,150		38	%		3,854		37	%
Alternative investments	2% to 10%		220		2	%		173		2	%
Total		$	10,889		100	%	$	10,254		100	%

Under the provisions of ASC 715, we are required to recognize in our consolidated balance sheet the unfunded status of a benefit plan. This is measured as the difference between plan assets at fair value and the projected benefit obligation. For the pension plan, this is equal to the accumulated benefit obligation.

Certain employees covered by collective bargaining agreements participate in multiemployer pension plans. Syms ceased to have an obligation to contribute to these plans in 2012, thereby triggering a complete withdrawal from the plans within the meaning of section 4203 of the Employee Retirement Income Security Act of 1974. Consequently, we are subject to the payment of a withdrawal liability to these pension funds. We had a recorded liability of $2.5 million and $3.4 million which is reflected in pension liability as of December 31, 2016 and December 31, 2015, respectively, and is included as part of the net claims distribution. We are required to make quarterly distributions in the amount of $0.2 million until this liability is completely paid to the multiemployer plan by the end of 2019. In accordance with minimum funding requirements and court ordered allowed claims distributions, we paid approximately $4.4 million to the multiemployer plans from September 17, 2012 through December 31, 2016 of which $0.8 million and $0.6 million was funded during the year ended December 31, 2016 and the period ended December 31, 2015, respectively, to the multiemployer plan.

401(k) Plan – During fiscal 2014, we established a 401(k) plan for all of our employees. Eligible employees are able to contribute a percentage of their salary to the plan subject to statutory limits. We paid approximately $54,000 and $43,000 in matching contributions to this plan during the year ended December 31, 2016 and the period March 1, 2015 to December 31, 2015, respectively.