Note 8 - Retirement Plans

9 Months Ended

Oct. 31, 2022

Notes to Financial Statements

Retirement Benefits [Text Block]

Note 8 - Retirement plans

Pension plan termination. The defined benefit plan (the "Plan") that covered the hourly rate employees of a non-operating filtration business unit, previously located in Winchester, Virginia, was frozen on June 30, 2013 per the third Amendment to the Plan dated May 15, 2013. The accrued benefit of each participant was frozen as of the freeze date, and no further benefits accrued with respect to any service or hours of service after the freeze date. The benefits were based on fixed amounts multiplied by years of service of participants.

In the third quarter of 2022, the Company’s Board of Directors approved the termination of the Plan. The Company provided participants of the Plan an option to elect either a lump sum distribution or an annuity. A group annuity contract was purchased with an insurance company for all participants who did not elect a lump sum distribution. That insurance company became responsible for administering and paying pension benefit payments effective December 1, 2022.

During the three and nine months ended October 31, 2022, the Company recognized a non-cash pre-tax settlement charge of $0.9 million, within other income/(expense) in the consolidated statements of operations in connection with the Plan termination process, which represents the acceleration of deferred charges previously included within accumulated other comprehensive loss and the impact of remeasuring the Plan assets and obligations at termination. In addition, the Company recorded an income tax benefit of $0.1 million for the three and nine months ended October 31, 2022, to reclassify the tax effects in accumulated other comprehensive loss upon completion of the termination of the Plan. The Plan termination did not require a cash outlay by the Company. Upon completion of the pension termination and settlement processes, the Company expects a remaining pension surplus investment balance of approximately $0.9 million.