Retirement Plans

Savings Plan

Substantially all employees of the Company and its subsidiaries who are regular full-time employees or who work 1,000 hours during a 12-month period are eligible to participate in the Company’s 401(k) Plan. Participants can contribute up to 100% of their annual earnings to the 401(k) Plan in any combination of pre-tax, Roth 401(k) or after-tax contributions, subject to certain limitations. The Company matches 100% with respect to the first 3% and 50% with respect to the second 3% of each participant’s contributions to the 401(k) Plan. Participants are 100% vested in the company matching contributions after two years of service.

The Company’s contributions to the 401(k) Plan for Fiscal 2014, Fiscal 2013 and Fiscal 2012 were approximately $8.3 million, $8.0 million and $7.5 million, respectively.

Pension Plan

The Company froze its non-contributory defined benefit pension plan (the “Pension Plan”) in October 2007. As a result, no additional associates became participants in the Pension Plan, and no additional benefits were earned under the Pension Plan on or after that date.

The following table provides information for the Pension Plan as of January 31, 2015 and February 1, 2014:



	Fiscal Year Ended
	January 31, 2015			February 1, 2014
	(in thousands)
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	30,302		$	34,250
Interest cost	1,336			1,418
Actuarial loss/(gain)	6,710			(3,872		)
Benefits paid	(223		)	(1,494		)
Plan settlements	(3,174		)	—
Projected benefit obligation at end of year	34,951			30,302
Change in plan assets:
Fair value of plan assets at beginning of year	26,451			26,417
Actual return on plan assets	4,868			1,528
Benefits paid	(223		)	(1,494		)
Plan settlements	(3,174		)	—
Fair value of plan assets at end of year	27,922			26,451
Funded status at end of year	(7,029		)	(3,851		)
Net amount included in “Other liabilities”	$	(7,029	)	$	(3,851	)

As a result of the Pension Plan freeze, the accumulated benefit obligation equals the projected benefit obligation and was approximately $35.0 million and $30.3 million at January 31, 2015 and February 1, 2014, respectively.

11. Retirement Plans (Continued)

Pension Plan (continued)

The following table summarizes the components of net periodic benefit cost and other amounts recognized in accumulated other comprehensive loss:



	Fiscal Year Ended
	January 31, 2015			February 1, 2014			February 2, 2013
	(in thousands)
Net periodic benefit cost:
Interest cost	$	1,336		$	1,418		$	1,752
Expected return on plan assets	(1,255		)	(1,244		)	(1,500		)
Amortization of net loss	—			600			726
Settlement loss recognized	129			—			1,760
Net periodic benefit cost	210			774			2,738
Other changes in plan assets and benefit obligations recognized in other comprehensive loss:
Net loss/(gain) arising during the year	3,097			(4,156		)	1,153
Settlement charge	(129		)	—			(1,760		)
Amortization of net loss	—			(600		)	(726		)
Total recognized in other comprehensive loss/(income)	2,968			(4,756		)	(1,333		)
Total recognized in net periodic benefit cost and other comprehensive loss/(income)	$	3,178		$	(3,982	)	$	1,405

As a result of the Pension Plan freeze, the Company has no remaining prior service cost that will be amortized from accumulated other comprehensive loss into net periodic benefit cost. When the total amount of lump sum payments made to Pension Plan participants exceeds the interest cost for the fiscal year, a non-cash settlement charge is recorded. Since the total amount of lump sum payments made to plan participants was greater than the interest component of pension expense during Fiscal 2014 and Fiscal 2012, non-cash settlement charges of $0.1 million and $1.8 million, respectively, were recorded and included in “Selling, general and administrative expenses” in the Company's Consolidated Statements of Operations. There were no such settlement charges recorded in Fiscal 2013.

Amounts recognized in accumulated other comprehensive loss consist of:



	Fiscal Year Ended
	January 31, 2015		February 1, 2014
	(in thousands)
Net actuarial loss	$	5,519	$	2,551
Total	$	5,519	$	2,551

For the fiscal years ended January 31, 2015 and February 1, 2014, the following weighted average assumptions were used to determine benefit obligations at the end of the fiscal year:

11. Retirement Plans (Continued)

Pension Plan (continued)

For the fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013, the following weighted average assumptions were used to determine net periodic benefit cost:



	Fiscal Year Ended
	January 31, 2015		February 1, 2014		February 2, 2013
Discount rate	4.65	%	4.35	%	4.85	%
Long-term rate of return on assets	5.10	%	5.10	%	5.10	%

To develop the expected long-term rate of return on Pension Plan assets, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the Pension Plan portfolio. The Company assumes that all employees will take lump-sum payouts based on historical payout trends. The discount rate was developed using a yield curve which consists of spot interest rates for each of the next 30 years and is developed based on pricing and yield information for high quality corporate bonds, whose cash flows mirror the anticipated timing of future benefit payments.

In October 2014, the Society of Actuaries published updated mortality tables (RP-2014) and an updated mortality improvement scale (MP-2014) specifically intended for use in estimating retirement plan liabilities for U.S. plans, both of which reflect increased life expectancy. The Company has historically utilized the Society of Actuaries' published mortality data in its Pension Plan assumptions. Accordingly, the Company adopted RP-2014 and MP-2014 for purposes of measuring its Pension Plan obligation at January 31, 2015, the impact of which was not material.

Since the Pension Plan was frozen in October 2007, its goal is to provide all plan benefits and expenses through growth and income from the Pension Plan assets, with such employer contributions as may be required in accordance with applicable rules and regulations. Accordingly, the Company sets recommended asset allocation percentages based upon the funded status of the Pension Plan. If the funded status is less than 100%, the recommended allocation of Pension Plan Assets is 45% equity securities and 55% debt securities. If the funded status is greater than 100% but less than 110%, the recommended allocation of Pension Plan assets is 25% equity securities and 75% debt securities. If the funded status is greater than 110%, the recommended allocation of Pension Plan assets is 100% debt securities. Generally, the Company does not make changes to its Pension Plan asset allocation percentages if the funded status decreases from prior levels, however, the Company’s Administrative Committee has the authority to override the target asset allocation or adjust the timing of asset allocation changes to the extent considered necessary.

Pension Plan assets consist primarily of equity and fixed income funds or cash and cash equivalents. The equity securities do not include any of the Company’s common stock. The principal investment objectives of the Pension Plan are to: minimize the volatility of the funding ratio and achieve a satisfactory rate of return based on that objective; incur a reasonable pension cost in the long-term; and satisfy its benefit obligations. The investment performance guidelines of the Pension Plan are set and measured against appropriate portfolio benchmarks. In addition, its goals, objectives, asset allocation policies and funding forecasts are reviewed periodically within any given plan year, or when significant changes have occurred in Pension Plan benefits, participant demographics or funded status.

As discussed in Note 3, “Fair Value Measurements,” ASC 820-10 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The investments held by the Company’s Pension Plan, as well as their associated level within the fair value hierarchy, are shown below:

Mutual funds and money market funds:

Mutual funds of registered investment companies are traded in active markets and valued at the closing price reported on those major markets as of the measurement date and, therefore, are classified in Level 1 of the fair value hierarchy. Short-term money market funds are valued at cost plus accrued interest, which is also considered Level 1 of the fair value hierarchy.

Common collective trusts:

These investments are valued using the Net Asset Value (“NAV”) provided by the administrators of the funds, based on the value of the underlying assets owned by the fund or trust, minus its liabilities, and then divided by the number of shares outstanding. The unit price of these investments is not quoted in an active market. However, the unit price is based on underlying investments that are either traded in an active market or are valued based on observable inputs such as market interest rates and quoted prices for similar securities. Therefore, common collective trusts are classified in Level 2 of the fair value hierarchy.

11. Retirement Plans (Continued)

Pension Plan (continued)

The following tables segregate all financial assets and liabilities held by the Company’s Pension Plan as of January 31, 2015 and February 1, 2014 measured at fair value on a recurring basis (at least annually) into the most appropriate level within the fair value hierarchy, based on the inputs used to determine fair value at the measurement date:



	January 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
			(in thousands)
Mutual funds:
Real estate	$	489	$	489	$	—	$	—
Total mutual funds	489		489		—		—
Common collective trusts:
Small blend	943		—		943		—
Mid cap blend	922		—		922		—
Large value	2,669		—		2,669		—
Large growth	2,780		—		2,780		—
Foreign large growth	1,349		—		1,349		—
Long-term bond	18,669		—		18,669		—
Total common collective trusts	27,332		—		27,332		—
Money market funds	101		101		—		—
Total assets	$	27,922	$	590	$	27,332	$	—

	February 1, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
			(in thousands)
Mutual funds:
Real estate	$	546	$	546	$	—	$	—
Total mutual funds	546		546		—		—
Common collective trusts:
Small blend	901		—		901		—
Mid cap blend	1,036		—		1,036		—
Large value	2,627		—		2,627		—
Large growth	2,735		—		2,735		—
Foreign large growth	1,355		—		1,355		—
Long-term bond	16,980		—		16,980		—
Total common collective trusts	25,634		—		25,634		—
Money market funds	271		271		—		—
Total assets	$	26,451	$	817	$	25,634	$	—

11. Retirement Plans (Continued)

Pension Plan (continued)

The benefits expected to be paid under the Pension Plan as of January 31, 2015 are as follows:



Fiscal Year	(in thousands)
2015	$	2,241
2016	2,420
2017	1,933
2018	1,591
2019	1,419
2020-2024	7,284

The Company made no contributions to the Pension Plan in Fiscal 2014, Fiscal 2013 or Fiscal 2012. Although the Company was not required to make a contribution to the Pension Plan during these periods, any deterioration in the financial markets or changes in discount rates may require the Company to make a contribution to its Pension Plan in Fiscal 2015.

Non-Qualified Deferred Compensation Plan

Under the Company’s Deferred Compensation Plan, certain executives at the vice-president level and above may defer up to 50% of their salary and up to 95% of cash-based performance compensation earned during a calendar year. Under the Deferred Compensation Plan, the Company matches the amount of the base and bonus compensation deferred by the executive during the Plan year above the Internal Revenue Code Section 401(a)(17) qualified plan compensation limit as indexed on an annual basis (“Eligible Compensation”). The Company matches 100% on the first 3% of a participant’s deferred Eligible Compensation, and 50% of a participant’s deferred Eligible Compensation over 3% and up to 6%. Amounts deferred and credited to the executive’s deferred compensation account are at all times fully vested. The Company’s matching contributions vest upon the second anniversary of the executive’s date of hire, or earlier upon a change in control (as defined under the Deferred Compensation Plan). The Company’s matching contributions under the Deferred Compensation Plan were approximately $0.8 million, $1.1 million and $0.8 million during Fiscal 2014, Fiscal 2013 and Fiscal 2012, respectively.

Fiscal Year Ended

January 31,
2015

February 1,
2014

Discount rate