

NOTE 7	EMPLOYEE POSTRETIREMENT BENEFITS

The Company has two 401(k) plans covering substantially all employees as of January 31, 2013. One plan, which covers the majority of employees, matches employee contributions up to 4%. The other 401(k) plan was assumed as part of the Vista acquisition. Contributions under this plan include a 3% annual contribution and may include additional discretionary contributions to the plan that are determined annually by management. Total 401(k) contribution expense for both plans was $2,021, $1,556 and $1,254 for fiscal 2013, 2012 and 2011, respectively.

In addition, the Company provides postretirement medical and other benefits to senior executive officers and senior managers. There are no assets held for the postretirement plans and any obligations are covered through operating cash and investments. The accumulated benefit obligation for these benefits is as follows:



	For the years ended January 31,
	2013			2012			2011
Benefit obligation at beginning of year	$	7,560		$	5,969		$	5,512
Service cost	187			121			62
Interest cost	335			334			324
Actuarial loss and assumption changes	433			1,363			237
Retiree benefits paid	(208		)	(227		)	(166		)
Benefit obligation at end of year	$	8,307		$	7,560		$	5,969

The following tables set forth the plans pre-tax adjustment to accumulated other comprehensive income/loss (AOCI):



	For the years ended January 31,
	2013			2012			2011
Amounts not yet recognized in net periodic benefit cost:
Net actuarial loss	$	3,441		$	3,218		$	1,912
Transition obligation	—			23			45
Total pre-tax accumulated other comprehensive loss	$	3,441		$	3,241		$	1,957

Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation	$	3,241		$	1,957		$	1,935
Reclassification adjustments recognized in benefit cost:
Recognized net (loss)	(210		)	(104		)	(144		)
Amortization of transition obligation	(23		)	(23		)	(23		)
Amounts recognized in AOCI during the year:
Net actuarial loss	433			1,411			189
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation	$	3,441		$	3,241		$	1,957

The net actuarial loss for fiscal year 2013 was driven by a decrease in the discount rate and demographic changes, offset by better than expected claims experience. The net actuarial loss in fiscal year 2012 was primarily caused by the decrease in discount rate. The net actuarial loss in fiscal year 2011 was driven by an increase in the ultimate health care trend rate and a decrease in the discount rate, offset by lower than expected claims.

The liability and net periodic benefit cost reflected in the Consolidated Balance Sheets and Consolidated Statements of Income and Comprehensive Income were as follows:



	For the years ended January 31,
	2013			2012			2011
Beginning liability balance	$	7,560		$	5,969		$	5,512
Net periodic benefit cost	755			582			552
Other comprehensive (income) loss	200			1,236			71
Total recognized in net and other comprehensive income	955			1,818			623
Retiree benefits paid	(208		)	(227		)	(166		)
Ending liability balance	$	8,307		$	7,560		$	5,969

Current portion in accrued liabilities	$	235		$	212		$	212
Long-term portion in other liabilities	$	8,072		$	7,348		$	5,757
Assumptions used to calculate benefit obligation:
Discount rate	4.25		%	4.50		%	5.75		%
Wage inflation rate	4.00		%	4.00		%	4.00		%
Health care cost trend rates:
Health care cost trend rate assumed for next year	8.10		%	8.60		%	9.00		%
Ultimate health care cost trend rate	5.00		%	5.00		%	5.00		%
Year that the rate reaches the ultimate trend rate	2025			2025			2025

The discount rate is based on matching rates of return on high-quality fixed-income investments with the timing and amount of expected benefit payments. No material fluctuations in retiree benefit payments are expected in future years. The total estimated cost to be recognized from AOCI into net periodic benefit cost over the next fiscal year is $182.

The assumed health care cost trend rate has a significant effect on the amounts reported. The impact of a one-percentage point change in assumed health care rates would have the following effects:



	January 31, 2013
	One-percentage-point increase		One-percentage-point decrease
Effect on total of service and interest cost components	$	75	$	(53	)

Effect on accumulated postretirement benefit obligation	$	1,588	$	(1,288	)