Pension and Retirement Savings Plan

12 Months Ended

Jan. 31, 2023

Retirement Benefits [Abstract]

Pension and Retirement Savings Plan

NOTE 19 – PENSION AND RETIREMENT SAVINGS PLAN

Defined Contribution Plans

401(k) Savings Plan

All employees in the United States are eligible to participate in the Company’s Employee Savings and Investment Plan (“401(k) Plan”), a tax-qualified defined contribution retirement savings plan. The Company matches 50% of each 1% contributed by the employee up to a maximum of 6% of pay (totaling a company maximum match of 3%), subject to the contribution limits imposed by the Internal Revenue Code. Employees vest in the Company match after three years of service. In fiscal 2023, 2022 and 2021, the Company contributed $1.2 million, $1.1 million and $0.3 million, respectively, in cash to the 401(k) Plan. The decrease in fiscal 2021 was due to the Company’s temporary suspension in the Company match from April 2020 to the end of fiscal 2021 in response to the COVID-19 pandemic. The Company match resumed in the first quarter of fiscal 2022.

Other Defined Contribution Plans

The Company sponsors defined contribution benefit plans for its employees located in Asia, the United Kingdom and Mexico. Company contributions and expenses of administering the plans were $1.2 million, $0.8 million and $0.6 million in fiscal 2023, 2022 and 2021, respectively.

The Company maintains a defined contribution Deferred Compensation Plan (also known as a supplemental employee retirement plan or SERP). The SERP provides eligible executives with supplemental retirement benefits in addition to amounts received under the Company’s other retirement plans. The Company makes a matching contribution, up to either 5% or 10% of the executive’s salary, which vests in equal annual installments over five years. Twenty percent of the Company’s matching contribution is in the form of rights to the Company’s common stock. During fiscal 2023, 2022 and 2021, the Company recorded expenses related to the SERP of $0.6 million, $0.6 million and $0.9 million ($0.5 million is included in the Restructuring Plan of the corporate initiatives), respectively. The Company temporarily suspended the matching contribution from April 2020 to the end of fiscal 2021 in response to the COVID-19 pandemic. The Company SERP matches resumed in the first quarter of 2022.

Defined Benefit Plan

The Company sponsors a defined benefit plan in Switzerland. The plan covers certain international employees and is based on years of service and compensation on a career-average pay basis.

The components of the net periodic pension costs for the fiscal years ended January 31, 2023, 2022 and 2021 are as follows:

(Amounts in thousands)	2023			2022			2021
Service cost	$	1,138		$	1,131		$	1,274
Interest cost		57			-			-
Expected return on assets		(439	)		(395	)		(372	)
Actuarial gain recognized due to partial settlement		(105	)		-			(43	)
Amortization of prior service costs		71			74			73
Net Periodic Pension Cost	$	722		$	810		$	932

The other components of the net periodic pension costs, including interest cost, expected return on assets, actuarial gain recognized due to partial settlement and the amortization of the prior service costs, are all included in other income in fiscal 2023, fiscal 2022 and fiscal 2021 in the consolidated statement of operations.

During fiscal 2023 and 2021, the settlements, including lump sum payments, exceeded the sum of the current service cost and interest cost components. Because only a portion of the benefit obligation is settled, the Company recognized in fiscal 2023 and 2021 a pro rata portion of the unamortized net gain in the net periodic pension cost as a reduction of other components of the net periodic pension cost.

The estimated prior service cost that will be amortized from accumulated other comprehensive income into net periodic pension cost in the fiscal year ended January 31, 2024 is $0.1 million.

A reconciliation of the change in benefit obligation, the change in plan assets and the net amount recognized in the consolidated balance sheets are shown below (based on a January 31 measurement date):

(Amounts in thousands)	2023			2022
Change in benefit obligation:
Pension benefit obligation at beginning of period	$	28,302		$	26,583
Service cost		1,138			1,131
Interest cost		57			-
Benefits deposited		20			515
Employee contributions		802			760
Actuarial (gains)/losses		(1,566	)		397
Foreign currency exchange rate impact		356			(1,084	)
Pension benefit obligation at end of year		29,109			28,302
Change in plan assets:
Fair value of plan assets at beginning of period	$	29,096		$	25,837
Company contributions		1,205			1,142
Benefits deposited		20			515
Actual (loss)/return on plan assets		(3,446	)		1,914
Employee contributions		802			760
Foreign currency exchange rate impact		288			(1,072	)
Fair value of plan assets at end of year		27,965			29,096
Funded status - consolidated	$	(1,144	)	$	794
Amounts recognized in the consolidated balance sheets    consist of:
Other non-current assets	$	-		$	794
Other non-current liabilities		(1,144	)		-
Amounts recognized in accumulated other    comprehensive income/(loss):
Prior service cost		288			358
Net actuarial loss/(gain)		1,899			(618	)
Tax effect		(467	)		55
Net amount recognized, after tax	$	1,720		$	(205	)
Accumulated benefit obligation	$	28,997		$	28,142

Investment Policy:

It is the objective of the plan sponsor to maintain an adequate level of diversification to balance market risk, to prudently invest to preserve capital and to provide sufficient liquidity while maximizing earnings for near-term payments of benefits accrued under the plan and to pay plan administrative expenses. The assumption used for the expected long-term rate of return on plan assets is based on the long-term expected returns for each investment category currently in the portfolio. Historical return trends for the various asset classes in the class portfolio are combined with current and anticipated future market conditions to estimate the rate of return for each class. These rates are then adjusted for anticipated future inflation to determine estimated nominal rates of return for each class.

The assets are classified as a Level 3 asset within the fair value hierarchy and consist of an investment in pooled assets and include separate employee accounts that are invested in equity securities, debt securities and real estate. The values of the separate accounts invested are based on values provided by the administrator of the funds that cannot be readily derived from or corroborated by observable market data.

The weighted‑average assumptions that were used to determine the Company’s benefit obligations as of the measurement date (January 31) were as follows:

	2023			2022			2021
Discount rate		1.90	%		0.20	%		0.00	%
Salary progression rate		1.10	%		1.10	%		1.10	%
Expected long-term rate of return on plan assets		2.50	%		1.50	%		1.50	%

The discount rates used are based on high quality AAA- and AA-rated corporate bonds with durations corresponding to the expected durations of the benefit obligations and service time.

The weighted‑average assumptions that were used to determine the Company’s net periodic pension cost were as follows:

	2023			2022			2021
Discount rate		0.20	%		0.00	%		0.00	%
Salary progression rate		1.10	%		1.10	%		1.10	%
Expected long-term rate of return on plan assets		1.50	%		1.50	%		1.50	%

The overall expected long-term rate of return on plan assets is a weighted-average expectation based on the targeted portfolio composition. Historical experience and current benchmarks are considered to arrive at expected long-term rates of return in each asset category.

The Company expects the following benefit payments to be paid out for the fiscal years indicated. The expected benefit payments are based on the same assumptions used to measure the Company’s benefit obligation at January 31, 2023 and include estimated future employee service. The Company does not expect any plan assets to be returned to it during the fiscal year ending January 31, 2024. Payments from the pension plan are made from the plan assets.

Fiscal Year ending January 31,	(in thousands)
2024	$	679
2025		403
2026		364
2027		519
2028		276
2029-2033		3,534

During fiscal 2024, the Company expects to contribute $1.2 million to its Swiss defined benefit plan.