Defined Benefit Pension Plans and Other Postretirement Benefit Plans

Defined Benefit Pension Plans

The Company previously sponsored a non-contributory, defined benefit pension plan. As of January 1, 1996, the Company amended the plan to change the pension benefit formula to a cash balance formula from the then existing benefit calculation based upon years of service and final average pay. The benefits accrued under the old formula were frozen as of December 31, 1995. Upon retirement, the participant will receive this accrued benefit payable as an annuity. In addition, the participant will receive as a lump sum (or annuity if desired) the amount credited to the participant’s cash balance account under the new formula. Effective January 1, 2005, the Company froze the defined benefit cash balance plan which prevents any new entrants into the plan as of that date as well as affects the amounts credited to the participants’ accounts as discussed below.

Under the cash balance formula, beginning January 1, 1996, the Company credits each participants’ account annually with an amount equal to 4% of the participant’s compensation plus 4% of the participant’s compensation in excess of the Social Security taxable wage base. Beginning December 31, 1996 and annually thereafter, the account balance of each active participant was credited with 7% interest calculated on the sum of the balance as of the beginning of the plan year and 50% of the amounts credited to the account, other than interest, for the plan year. The account balance of each participant who was inactive would be credited with interest at the lesser of 7% or the 30 year Treasury rate. Under the frozen plan, each participants’ cash balance plan account will be credited annually only with interest

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

at the 30 year Treasury rate, not to exceed 7%, until the participant retires. The amount credited each year will be based on the rate at the end of the prior year.

In June 2016, the Company's board of directors authorized an offer to vested former employees and active employees over the age of 62 in the Company's defined benefits pension plan to buy out their future benefits under the plan for a lump sum cash payment. The Company made the buyout offer in

the third quarter of Fiscal 2017, and completed it in the fourth quarter of Fiscal 2017. The Company incurred a one-time charge to earnings of $2.5 million in the fourth quarter of Fiscal 2017 in connection with the pension plan buyout.

Other Postretirement Benefit Plans

The Company provides health care benefits for early retirees and life insurance benefits for certain retirees not covered by collective bargaining agreements. Under the health care plan, early retirees are eligible for benefits until age 65. Employees who meet certain requirements are eligible for life insurance benefits upon retirement. The Company accrues such benefits during the period in which the employee renders service.

Obligations and Funded Status

The measurement date of the assets and liabilities for the defined benefit pension plan and postretirement medical and life insurance plans is the month-end date that is closest to the Company's fiscal year end.

Change in Benefit Obligation



	Pension Benefits						Other Benefits
In thousands	2018			2017			2018			2017
Benefit obligation at beginning of year	$	86,947		$	100,290		$	8,943		$	6,826
Service cost	550			550			903			704
Interest cost	3,277			4,118			354			286
Plan participants’ contributions	—			—			159			158
Plan settlements	—			(13,862		)	—			—
Benefits paid	(7,811		)	(8,308		)	(403		)	(257		)
Actuarial loss	2,072			4,159			628			1,226
Benefit Obligation at End of Year	$	85,035		$	86,947		$	10,584		$	8,943

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

Change in Plan Assets



	Pension Benefits						Other Benefits
In thousands	2018			2017			2018			2017
Fair value of plan assets at beginning of year	$	80,682		$	90,333		$	—		$	—
Actual gain on plan assets	12,859			12,531			—			—
Plan settlements	—			(13,874		)	—			—
Employer contributions	—			—			244			99
Plan participants’ contributions	—			—			159			158
Benefits paid	(7,811		)	(8,308		)	(403		)	(257		)
Fair Value of Plan Assets at End of Year	$	85,730		$	80,682		—			—
Funded Status at End of Year	$	695		$	(6,265	)	$	(10,584	)	$	(8,943	)

Amounts recognized in the Consolidated Balance Sheets consist of:



	Pension Benefits					Other Benefits
In thousands	2018		2017			2018			2017
Noncurrent assets	$	695	$	—		$	—		$	—
Current liabilities	—		—			(393		)	(343		)
Noncurrent liabilities	—		(6,265		)	(10,191		)	(8,600		)
Net Amount Recognized	$	695	$	(6,265	)	$	(10,584	)	$	(8,943	)

Amounts recognized in accumulated other comprehensive income consist of:



	Pension Benefits				Other Benefits
In thousands	2018		2017		2018		2017
Net loss	$	8,314	$	15,430	$	3,008	$	2,518
Total Recognized in Accumulated Other Comprehensive Loss	$	8,314	$	15,430	$	3,008	$	2,518

Amounts for projected and accumulated benefit obligation and fair value of plan assets are as follows:



In thousands	February 3, 2018		January 28, 2017
Projected benefit obligation	$	85,035	$	86,947
Accumulated benefit obligation	85,035		86,947
Fair value of plan assets	85,730		80,682

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

Components of Net Periodic Benefit Cost

Net Periodic Benefit Cost



	Pension Benefits									Other Benefits
In thousands	2018			2017			2016			2018		2017		2016
Service cost	$	550		$	550		$	450		$	903	$	704	$	821
Interest cost	3,277			4,118			4,263			354		286		245
Expected return on plan assets	(4,505		)	(5,641		)	(5,785		)	—		—		—
Settlement loss recognized	—			2,456			—			—		—		—
Amortization:
Losses	834			810			4,948			139		125		189
Net amortization	$	834		$	810		$	4,948		$	139	$	125	$	189
Net Periodic Benefit Cost	$	156		$	2,293		$	3,876		$	1,396	$	1,115	$	1,255

Reconciliation of Accumulated Other Comprehensive Income



	Pension Benefits			Other Benefits
In thousands	2018			2018
Net (gain) loss	$	(6,282	)	$	628
Amortization of net actuarial loss	(834		)	(139		)
Total Recognized in Other Comprehensive Income	$	(7,116	)	$	489
Total Recognized in Net Periodic Benefit Cost and Other Comprehensive Income	$	(6,960	)	$	1,885

The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year

are $0.8 million and $0.0 million, respectively. The estimated net loss for the other postretirement benefit plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $0.1 million.

Weighted-average assumptions used to determine benefit obligations



	Pension Benefits				Other Benefits
	2018		2017		2018		2017
Discount rate	3.70	%	3.95	%	3.67	%	3.98	%
Rate of compensation increase	NA		NA		—		—

For Fiscal 2018 and 2017, the discount rate was based on a yield curve of high quality corporate bonds with cash flows matching the Company’s planned expected benefit payments.

The decrease in the discount rate for Fiscal 2018 increased the accumulated benefit obligation by $1.9 million and increased the projected benefit obligation by $1.9 million. The decrease in the discount rate for Fiscal 2017 increased the accumulated benefit obligation by $3.2 million and increased the projected benefit obligation by $3.2 million.

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

Weighted-average assumptions used to determine net periodic benefit costs



	Pension Benefits						Other Benefits
	2018		2017		2016		2018		2017		2016
Discount rate	3.95	%	4.30	%	3.55	%	3.98	%	4.04	%	3.31	%
Expected long-term rate of return on plan assets	6.05	%	6.35	%	6.35	%	—		—		—
Rate of compensation increase	NA		NA		NA		—		—		—

To develop the expected long-term rate of return on assets assumption, the Company considered historical asset returns, the current asset allocation and future expectations. Considering this information, the Company selected a 6.05% long-term rate of return on assets assumption.

Assumed health care cost trend rates



	2018		2017
Health care cost trend rate assumed for next year	8.0	%	8.0	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5	%	5	%
Year that the rate reaches the ultimate trend rate	2028		2027

The effect on disclosed information of one percentage point change in the assumed health care cost trend rate for each future year is shown below.



In thousands	1% Increase in Rates		1% Decrease in Rates
Aggregated service and interest cost	$	274	$	222
Accumulated postretirement benefit obligation	$	1,654	$	1,470

Plan Assets

The Company’s pension plan weighted average asset allocations as of February 3, 2018 and January 28, 2017, by asset category are as follows:



	Plan Assets
	February 3, 2018		January 28, 2017
Asset Category
Cash	2	%	—	%
Equity securities	64	%	65	%
Debt securities	34	%	35	%
Total	100	%	100	%

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

The investment strategy of the trust is to ensure over the long-term an asset pool, that when combined with Company contributions, will support benefit obligations to participants, retirees and beneficiaries. Investment management responsibilities of plan assets are delegated to outside investment advisers

and overseen by an Investment Committee comprised of members of the Company’s senior management that are appointed by the Board of Directors. The Company has an investment policy that provides direction on the implementation of this strategy.

The investment policy establishes a target allocation for each asset class and investment manager. The actual asset allocation versus the established target is reviewed at least quarterly and is maintained within a +/- 5% range of the target asset allocation. Target allocations are 50% domestic equity, 13% international equity, 35% fixed income and 2% cash investments.

All investments are made solely in the interest of the participants and beneficiaries for the exclusive purposes of providing benefits to such participants and their beneficiaries and defraying the expenses related to administering the trust as determined by the Investment Committee. All assets shall be properly

diversified to reduce the potential of a single security or single sector of securities having a disproportionate impact on the portfolio.

The Committee utilizes an outside investment consultant and investment managers to implement its various investment strategies. Performance of the managers is reviewed quarterly and the investment objectives are consistently evaluated.

At February 3, 2018 and January 28, 2017, there were no Company related assets in the plan.

For level 1 securities in the fair value hierarchy, quoted market prices are used to value pension plan assets. Equities, some fixed income securities, publicly traded investment funds and U.S. government obligations are valued at the closing price reported on the active market on which the individual security is traded. For level 2 securities in the fair value hierarchy, the Company's pension assets are invested principally in commingled funds. Commingled funds represent investment funds comprising multiple individual financial instruments. The commingled funds held consist of securities such as equity or debt. All underlying positions in these commingled funds are either exchange traded or measured using observable inputs for similar instruments. The fair value of commingled funds is based on net asset value ("NAV") per fund share (the unit of account), derived from the prices of the underlying securities in the funds. These commingled funds can be redeemed at the measurement date NAV.

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

The following tables present the pension plan assets by level within the fair value hierarchy as of February 3, 2018 and January 28, 2017.



February 3, 2018 (In thousands)	Level 1			Level 2		Level 3		Total
Equity Securities:
International Securities	$	—		$	11,076	$	—	$	11,076
U.S. Securities	—			44,013		—		44,013
Fixed Income Securities	—			28,795		—		28,795
Other:
Cash Equivalents	1,893			—		—		1,893
Other (includes receivables and payables)	(47		)	—		—		(47		)
Total Pension Plan Assets	$	1,846		$	83,884	$	—	$	85,730



January 28, 2017 (In thousands)	Level 1			Level 2		Level 3		Total
Equity Securities:
International Securities	$	10,367		$	—	$	—	$	10,367
U.S. Securities	42,041			—		—		42,041
Fixed Income Securities	27,987			—		—		27,987
Other:
Cash Equivalents	426			—		—		426
Other (includes receivables and payables)	(139		)	—		—		(139		)
Total Pension Plan Assets	$	80,682		$	—	$	—	$	80,682

Cash Flows

Return of Assets

There was no return of assets from the plan to the Company in Fiscal 2018 and no plan assets are projected to be returned to the Company in Fiscal 2019.

Contributions

There was no Employee Retirement Income Security Act of 1974, as amended ("ERISA") cash requirement for the plan in 2017 and none is projected to be required in 2018. It is the Company’s policy to contribute enough cash to maintain at least an 80% funding level.

Note 10

Defined Benefit Pension Plans and Other Postretirement Benefit Plans, Continued

Estimated Future Benefit Payments

Expected benefit payments from the trust, including future service and pay, are as follows:



Estimated future payments	Pension Benefits ($ in millions)		Other Benefits ($ in millions)
2019	$	7.2	$	0.4
2020	6.9		0.4
2021	6.7		0.5
2022	6.4		0.5
2023	6.3		0.5
2024 – 2028	28.3		2.7

Section 401(k) Savings Plan

The Company has a Section 401(k) Savings Plan available to employees who have completed one full year of service and are age 21 or older.

Since January 1, 2005, the Company has matched 100% of each employee’s contribution of up to 3% of salary and 50% of the next 2% of salary. In addition, for those employees hired before December 31, 2004, who were eligible for the Company’s cash balance retirement plan before it was frozen, the Company annually makes an additional contribution of 2 1/2 % of salary to each employee’s account.

In calendar 2005 and future years, participants are immediately vested in their contributions and the Company’s matching contribution plus actual earnings thereon. The contribution expense to the Company for the matching program was approximately $6.1 million for Fiscal 2018, $5.5 million for Fiscal 2017 and $6.0 million for Fiscal 2016.