Postretirement Benefits and Retirement Plan

12 Months Ended

Jan. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Postretirement Benefits and Retirement Plan

POSTRETIREMENT BENEFITS AND RETIREMENT PLAN

The Company had a plan to provide group medical benefits for eligible retired employees. The costs of these insurance benefits were previously recognized as the eligible employees render service. Effective January 1, 2006, the Company decided to indefinitely suspend eligibility to the postretirement medical plan for future company retirees. At the time of the Separation the $1.5 million liability related to postretirement benefits was transferred to Sears Holdings Corporation as it assumed administration and funding of the plan after the Separation. This transaction was accounted for as an adjustment to Net parent company investment and did not result in cash flows.

The following table presents the change in the benefit obligation:

(in thousands)	Fiscal 2014			Fiscal 2013
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,541		$	1,678
Transfer to Sears Holdings	(1,526		)	—
Interest cost	12			58
Plan participants’ contributions	—			18
Actuarial gain	(27		)	(103		)
Benefits paid	—			(110		)
Benefit obligation at end of year, net amount recognized	$	—		$	1,541
Change in plan assets at fair value:
Employer contributions	$	—		$	92
Plan participants’ contributions	—			18
Benefits paid	—			(110		)
Plan assets at end of year	$	—		$	—

The components of net periodic benefit (income) cost are as follows:

(in thousands)	Fiscal 2014			Fiscal 2013			Fiscal 2012
Interest cost	$	12		$	58		$	70
Recognized net actuarial (gain) loss	(27		)	(103		)	29
Total postretirement benefit (income) cost	$	(15	)	$	(45	)	$	99
Weighted-average assumption at end of year:
Discount rate	N/A			4.0		%	4.2		%

For measurement purposes, an 8.0% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2014 and beyond, moving to an ultimate downward trend rate of 5.0% for 2020 and remaining at that level thereafter. An increase or decrease of one percentage point in the assumed health care trend rate would not have a material effect on the Combined Financial Statements.

The Company also has a 401(k) retirement plan, which covers most regular employees and allows them to make contributions. The Company also provides a matching contribution on a portion of the employee contributions. Total expense provided under this plan was $3.4 million, $3.3 million and $3.6 million for Fiscal 2014, Fiscal 2013 and Fiscal 2012, respectively.