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PENSION PLANS

12 Months Ended

Dec. 31, 2020

NOTE 8 – PENSION PLANS

Defined Benefit Pension Plan

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. At December 31, 2020, we had recorded an overfunded pension balance of $343,000 which is included in prepaid expenses and other assets, net on the accompanying consolidated balance sheet, and at December 31, 2019, we had a recorded liability of $924,000 which is included in pension liabilities on the accompanying consolidated balance sheet. 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 $5.3 million to the Syms sponsored plan from September 17, 2012 through December 31, 2020. Historically, we have funded this plan in the third quarter of the calendar year. We funded $400,000, $400,000 and $470,000 to the Syms sponsored plan during the years ended December 31, 2020, 2019 and 2018, 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,
	2020		2019
CHANGE IN BENEFIT OBLIGATION:
Net benefit obligation - beginning of period	$	13,933	$	13,668
Interest cost		658		644
Actuarial loss		408		410
Gross benefits paid		(775)		(789)
Net benefit obligation - end of period	$	14,224	$	13,933

CHANGE IN PLAN ASSETS:
Fair value of plan assets - beginning of period	$	13,009	$	10,852
Employer contributions		400		400
Gross benefits paid		(775)		(789)
Return on plan assets		1,934		2,546
Fair value of plan assets - end of period	$	14,568	$	13,009

Over (under) funded status at end of period	$	344	$	(924)

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


	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2020			2019			2017
COMPONENTS OF NET PERIODIC COST:
Interest cost	$	658		$	644		$	666
(Gain) loss on assets		(758)			(628)			750
Amortization of loss (gain)		247			484			(990)
Net periodic cost	$	147		$	500		$	426

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, 2020, 2019 and 2018.

As of December 31, 2020 the benefits expected to be paid in the next five years and then in the aggregate for the five fiscal years thereafter are as follows (dollars in thousands):


Year	Amount
2021	$	896
2022		917
2023		931
2024		944
2025		991
2026-2031		3,937

The fair values and asset allocation of our plan assets as of December 31, 2020 and 2019 and the target allocation for fiscal 2020, 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, 2020				December 31, 2019
					% of Plan				% of Plan
Asset Category	Asset Allocation		Fair Value		Assets		Fair Value (1)		Assets
Cash and equivalents	0% to 10	%	$	877	6	%	$	835	6	%
Equity securities	40% to 57	%		9,755	67	%		8,019	62	%
Fixed income securities	35% to 50	%		3,936	27	%		4,155	32	%
Total			$	14,568	100	%	$	13,009	100	%

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 these 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 were required to make quarterly payments in the amount of approximately $203,000 until this liability was completely paid, which occurred with the final payment in the first quarter of 2020. We had no liability and a liability of $109,000 as of December 31, 2020 and 2019, respectively, related to this plan which is included in pension liabilities on the accompanying consolidated balance sheets. In accordance with minimum funding requirements

and court ordered allowed claims distributions, we paid a total of approximately $6.9 million to the various multiemployer plans from September 17, 2012 through December 31, 2020, of which approximately $109,000 and $813,000 was funded to the remaining multiemployer plan during each of the years ended December 31, 2020 and 2019.

See Note 9 - Commitments - Legal Proceedings - for further information regarding a claim related to the multiemployer pension plan.

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 $71,000, $67,000 and $65,000 in matching contributions to this plan during the years ended December 31, 2020, 2019 and 2018, respectively.