NOTE 8 – PENSION PLANS

Defined Benefit Pension Plan

Our predecessor, Syms, sponsored a defined benefit pension plan for certain eligible employees not covered under a collective bargaining agreement. The pension plan was frozen effective December 31, 2006. As of December 31, 2019 and 2018, we had a recorded liability of $924,000 and $2.8 million, respectively, which is included in pension liabilities on the accompanying consolidated balance sheets. This liability represents the estimated cost to us of terminating the plan in a standard termination, which would require us to make additional contributions to the plan so that the assets of the plan are sufficient to satisfy all benefit liabilities.

We currently plan to continue to maintain the Syms pension plan and make all contributions required under applicable minimum funding rules; however, we may terminate it at any time. In the event we terminate the plan, we intend that any such termination would be a standard termination. Although we have accrued the liability associated with a standard termination, we have not taken any steps to commence such a termination and currently have no intention of terminating the pension plan. In accordance with minimum funding requirements and court ordered allowed claims distributions, we paid approximately $4.9 million to the Syms sponsored plan from September 17, 2012 through December 31, 2019. Historically, we have funded this plan in the third quarter of the calendar year. We funded $400,000, $470,000 and $460,000 to the Syms sponsored plan during the years ended December 31, 2019, 2018 and 2017, respectively.

Presented below is financial information relating to this plan for the periods indicated (dollars in thousands):


	Year Ended		Year Ended
	December 31,		December 31,
	2019		2018

CHANGE IN BENEFIT OBLIGATION:
Net benefit obligation - beginning of period	$	13,668	$	14,620
Interest cost		644		666
Actuarial loss (gain)		410		(630)
Gross benefits paid		(789)		(988)
Net benefit obligation - end of period	$	13,933	$	13,668

CHANGE IN PLAN ASSETS:
Fair value of plan assets - beginning of period	$	10,852	$	12,120
Employer contributions		400		470
Gross benefits paid		(789)		(988)
Return (loss) on plan assets		2,546		(750)
Fair value of plan assets - end of period	$	13,009	$	10,852

Un-funded status at end of period	$	(924)	$	(2,816)

The pension expense includes the following components (dollars in thousands):


	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2019			2018			2017

COMPONENTS OF NET PERIODIC COST:
Interest cost	$	644		$	666		$	697
(Gain) loss on assets		(628)			750			(1,421)
Amortization of loss (gain)		484			(990)			1,241
Net periodic cost	$	500		$	426		$	517

WEIGHTED-AVERAGE ASSUMPTION USED:
Discount rate		5.0	%		5.0	%		5.0	%
Rate of compensation increase		0.0	%		0.0	%		0.0	%

The expected long-term rate of return on plan assets was 6% for the years ended December 31, 2019, 2018 and 2017.

As of December 31, 2019 the benefits expected to be paid in the next five fiscal years and then in the aggregate for the five fiscal years thereafter are as follows (dollars in thousands):


Year	Amount

2020	$	867
2021		896
2022		917
2023		931
2024		944
2025-2030		4,929

The fair values and asset allocation of our plan assets as of December 31, 2019 and 2018 and the target allocation for fiscal 2019, by asset category, are presented in the following table. All fair values are based on quoted prices in active markets for identical assets (Level 1 in the fair value hierarchy) (dollars in thousands):


			December 31, 2019				December 31, 2018
					% of Plan				% of Plan
Asset Category	Asset Allocation		Fair Value		Assets		Fair Value (1)		Assets

Cash and equivalents	0% to 10	%	$	835	6	%	$	557	5	%
Equity securities	40% to 57	%		8,019	62	%		6,460	58	%
Fixed income securities	35% to 50	%		4,155	32	%		4,121	37	%
Total			$	13,009	100	%	$	11,138	100	%

(1)

The fair value balance at December 31, 2018 includes a $286,000 past due payable which was distributed in the first half of 2019.

Under the provisions of ASC 715, we are required to recognize in our consolidated balance sheets the unfunded status of the benefit plan. This is measured as the difference between plan assets at fair value and the projected benefit obligation. For the pension plan, this is equal to the accumulated benefit obligation.

Multiemployer Pension Plans

Certain Syms employees were covered by collective bargaining agreements and participated in various multiemployer pension plans. Syms ceased to have an obligation to contribute to these plans in 2012, thereby triggering a complete withdrawal from the plans within the meaning of section 4203 of the Employee Retirement Income Security Act of 1974. As a result of the complete withdrawal, we were obligated to pay a withdrawal liability to one of these pension plans through the first quarter of 2020. We had a liability of approximately $109,000 and $922,000 as of December 31, 2019 and 2018, respectively, related to this plan which is included in pension liabilities on the accompanying consolidated balance sheets. We are required to make quarterly payments in the amount of approximately $203,000 until this liability is completely paid, which occurred with the final payment in the first quarter of 2020. In accordance with minimum funding requirements and court ordered allowed claims distributions, we paid a total of approximately $6.8 million to the various multiemployer plans from September 17, 2012 through December 31, 2019, of which approximately $813,000 was funded to the remaining multiemployer plan during each of the years ended December 31, 2019 and 2018. Our final payment, of approximately $109,000, was made in January 2020.

The trustees for the multiemployer pension plan to which the January 2020 payment was made have claimed that notwithstanding the plain language of the Plan as approved by the confirmation order entered by the Bankruptcy Court, the multiemployer pension plan is due additional sums in excess of the claim amount set forth in the Plan. We have advised the trustees for the multiemployer pension plan that if an action is taken to pursue a further claim against the Company, they will be in violation of the permanent injunction under the Plan and confirmation order and we will petition the Bankruptcy Court to enforce the permanent injunction, including seeking attorneys’ fees and costs.

401(k) Plan – We have established a 401(k) plan for all of our employees. Eligible employees are able to contribute a percentage of their salary to the plan subject to statutory limits. We paid approximately $67,000, $65,000 and $55,000 in matching contributions to this plan during the years ended December 31, 2019, 2018 and 2017, respectively.