Retirement Plans

The Company and its subsidiaries cover certain employees under a noncontributory defined benefit retirement plan, entitled the Virco Employees’ Retirement Plan (the “Pension Plan”). Benefits under the Employees Retirement Plan are based on years of service and career average earnings. As more fully described in the Form 10-K, benefit accruals under the Employees Retirement Plan were frozen effective December 31, 2003. There is no service cost incurred under this plan.

The Company also provides a supplementary retirement plan for certain key employees, the VIP Retirement Plan (the “VIP Plan”). The VIP Plan provides a benefit of up to 50% of average compensation for the last 5 years in the VIP Plan, offset by benefits earned under the Pension Plan. As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2019, benefit accruals under this plan were frozen since December 31, 2003. There is no service cost incurred under this plan.

The net periodic pension cost for the Pension Plan and the VIP Plan for the three and nine months ended October 31, 2019 and 2018 were as follows (in thousands):



	Combined Employee Retirement Plans
	Three Months Ended						Nine Months Ended
	10/31/2019			10/31/2018			10/31/2019			10/31/2018

Service cost	$	—		$	—		$	—		$	—
Interest cost	355			370			1,065			1,080
Expected return on plan assets	(343		)	(348		)	(1,029		)	(1,162		)
Plan settlement	—			22			—			341
Amortization of prior service cost	—			—			—			—
Recognized net actuarial loss	176			252			528			597
Benefit cost	$	188		$	296		$	564		$	856

401(k) Retirement Plan

The Company’s retirement plan, which covers all U.S. employees, allows participants to defer from 1% to 75% of their eligible compensation through a 401(k)-retirement program. The plan includes Virco stock as one of the investment options. At October 31, 2019 and 2018, the plan held 710,319 shares and 646,984 shares of Virco stock, respectively. For the three months ended October 31, 2019 and 2018, the compensation costs incurred for employer match was 204,000 and 190,000, respectively. For the nine months ended October 31, 2019 and 2018, the compensation costs incurred for employer match was $578,000 and $553,000, respectively.