Retirement Plans

9 Months Ended

Oct. 31, 2021

The Company and its subsidiaries cover certain employees under a noncontributory defined benefit retirement plan, entitled the Virco Employees’ Retirement Plan (the “Pension Plan”). As more fully described in the Annual Report on 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”). As more fully described in the Annual Report on Form 10-K for the year ended January 31, 2021, benefit accruals under this plan were frozen since December 31, 2003. During the second quarter ended July 31, 2021, the Company, at the retirees request, paid lump-sum distributions for the related benefit obligations. As the amount of the lump-sum settlement exceeded the sum of the service and interest cost for the year, the distribution was treated as a settlement in accordance with U.S. GAAP, resulting in plan settlement loss of $285,000 recorded in pension expense in the accompanying condensed consolidated statements of operations and an actuarial gain on the plan re-measurement of $2,059,000, net of tax, recorded to accumulated other comprehensive income for the three and nine months ended October 31, 2021.

The net periodic pension cost for the Pension Plan and the VIP Plan for the three and nine months ended October 31, 2021 and 2020 were as follows:


	Combined Employee Retirement Plans
	Three Months Ended				Nine Months Ended
	10/31/2021		10/31/2020		10/31/2021		10/31/2020
	(in thousands)
Service cost	$	—	$	—	$	—	$	—
Interest cost	281		301		841		903
Expected return on plan assets	(218)		(224)		(654)		(672)
Plan settlement	65		—		285		—
Amortization of prior service cost	—		—		—		—
Recognized net actuarial loss	442		465		1,328		1,395
Benefit cost	$	570	$	542	$	1,800	$	1,626

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, 2021 and 2020, the plan held 1,026,096 shares and 893,811 shares of Virco stock, respectively. For the three months ended October 31, 2021 and 2020, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $217,000 and $182,000, respectively. For the nine months ended October 31, 2021 and 2020, the compensation costs incurred for employer match, which is paid in the form of Company stock, was $608,000 and $587,000, respectively.