EMPLOYEE BENEFIT PLANS

Pension Benefits

We maintain the Pension Plan and Supplemental Pension Plan covering certain employees whose hire date was on or before April 1, 1994. Benefits under each plan are based on credited years of service and the employee's compensation during the last five years of employment. The Supplemental Pension Plan is maintained for certain highly compensated executives whose benefits were frozen in the Pension Plan in 1996. The Supplemental Pension Plan is designed to pay benefits in the same amount as if the participants continued to accrue benefits under the Pension Plan. We have no obligation to fund the Supplemental Pension Plan, and all assets and amounts payable under the Supplemental Pension Plan are subject to the claims of our general creditors.

The components of net periodic pension expense were comprised of the following:



(In thousands)	2014			2013			2012
Service cost - benefits earned in the period	$	1,951		$	2,086		$	2,171
Interest cost on projected benefit obligation	3,218			3,041			3,292
Expected investment return on plan assets	(3,219		)	(2,893		)	(3,089		)
Amortization of prior service cost	(34		)	(34		)	(34		)
Amortization of transition obligation	—			12			13
Amortization of actuarial loss	1,497			1,692			2,345
Settlement loss	1,868			83			298
Net periodic pension cost	$	5,281		$	3,987		$	4,996

In 2014, 2013, and 2012, we incurred pretax non-cash settlement charges of $1.9 million, $0.1 million and $0.3 million, respectively. The settlement charges were caused by lump sum benefit payments made to plan participants in excess of combined annual service cost and interest cost for each year.

The weighted-average assumptions used to determine net periodic pension expense were:



	2014		2013		2012
Discount rate	5.0	%	4.6	%	5.0	%
Rate of increase in compensation levels	3.0	%	3.5	%	3.5	%
Expected long-term rate of return	6.0	%	5.1	%	5.5	%

The weighted-average assumptions used to determine benefit obligations were:



	2014		2013
Discount rate	3.3	%	5.0	%
Rate of increase in compensation levels	2.8	%	3.0	%

The following schedule provides a reconciliation of projected benefit obligations, plan assets, funded status, and amounts recognized for the Pension Plan and Supplemental Pension Plan at January 31, 2015 and February 1, 2014:



(In thousands)	January 31, 2015			February 1, 2014
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	64,878		$	70,210
Service cost	1,951			2,086
Interest cost	3,218			3,041
Plan amendments	217			—
Benefits and settlements paid	(7,857		)	(5,035		)
Actuarial loss (gain)	15,780			(5,424		)
Projected benefit obligation at end of year	$	78,187		$	64,878

Change in plan assets:
Fair market value at beginning of year	$	56,329		$	59,376
Actual return on plan assets	5,685			1,379
Employer contributions	1,135			609
Benefits and settlements paid	(7,857		)	(5,035		)
Fair market value at end of year	$	55,292		$	56,329

Under funded and net amount recognized	$	(22,895	)	$	(8,549	)

Amounts recognized in the consolidated balance sheets consist of:
Current liabilities	$	(372	)	$	(340	)
Noncurrent liabilities	(22,523		)	(8,209		)
Net amount recognized	$	(22,895	)	$	(8,549	)

The following are components of accumulated other comprehensive income and, as such, are not yet reflected in net periodic pension expense:



(In thousands)	2014			2013
Unrecognized past service credit	$	(195	)	$	56
Unrecognized actuarial loss	(24,074		)	(14,124		)
Accumulated other comprehensive loss, pretax	$	(24,269	)	$	(14,068	)

We expect to reclassify $2.0 million of the actuarial loss along with an immaterial amount of past service credit into net periodic pension expense during 2015.

The following table sets forth certain information for the Pension Plan and the Supplemental Pension Plan at January 31, 2015 and February 1, 2014:



	Pension Plan				Supplemental Pension Plan
(In thousands)	January 31, 2015		February 1, 2014		January 31, 2015		February 1, 2014
Projected benefit obligation	$	72,659	$	59,724	$	5,528	$	5,154
Accumulated benefit obligation	65,627		54,635		4,667		4,643
Fair market value of plan assets	$	55,292	$	56,329	$	—	$	—

We elected not to make a discretionary contribution to the Pension Plan in 2014 or 2013. Our funding policy of the Pension Plan is to make annual contributions based on advice from our actuaries and the evaluation of our cash position, but not less than the minimum required by applicable regulations. Currently, we expect no required contributions to the Pension Plan during 2015, however, discretionary contributions could be made depending upon further analysis.

Using the same assumptions as those used to measure our benefit obligations, the Pension Plan and the Supplemental Pension Plan benefits expected to be paid in each of the following fiscal years are as follows:



Fiscal Year	(In thousands)
2015	$	6,030
2016	5,650
2017	5,689
2018	5,337
2019	5,476
2020 - 2024	$	27,007

Our overall investment strategy is to earn a long-term rate of return sufficient to meet the liability needs of the Pension Plan, within prudent risk constraints. In order to develop the appropriate asset allocation and investment strategy, an actuarial review of the Pension Plan's expected future distributions was completed. The strategy provides a well-defined risk management approach designed to reduce risks based on the Pension Plan's funded status.

Assets can generally be considered as filling one of the following roles within the strategy: (1) liability-hedging assets, which are designed to meet the cash payment needs of the plan's obligation and provide downside protection, primarily invested in intermediate and long maturity investment grade bonds; or (2) return-seeking assets, which are designed to deliver returns in excess of the Pension Plan's obligation growth rates, with broadly diversified assets including U.S. and non-U.S. equities, real estate, and high yield bonds. The current target allocation is approximately 80% liability-hedging assets and 20% return-seeking assets. Target allocations may change over time due to changes in the plan's funded status, or in response to changes in plan or market conditions. All assets must have readily ascertainable market values and be easily marketable. The portfolio of assets maintains a high degree of liquidity in order to meet benefit payment requirements and to allow responsiveness to evolving Pension Plan and market conditions.

The investment managers have the discretion to invest within sub-classes of assets within the parameters of their investment guidelines. Fixed income managers can adjust duration exposure as deemed appropriate given current or expected market conditions. Additionally, the investment managers have the authority to invest in financial futures contracts and financial options contracts for the purposes of implementing hedging strategies. There were no futures contracts owned directly by the Pension Plan at January 31, 2015 and February 1, 2014. The primary benchmark for assessing the effectiveness of the Pension Plan investments is that of the plan’s liabilities themselves. Asset class returns are also judged relative to common benchmark indices such as the Russell 3000 and Barclay's Capital Long Credit Bond. Investment results and plan funded status are monitored daily, with a detailed performance review completed on a quarterly basis.

The fair value of our Pension Plan assets at January 31, 2015 and February 1, 2014 by asset category was comprised of the following:



	January 31, 2015								February 1, 2014
(In thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Cash and Cash Equivalents	$	1,096	$	1,096	$	—	$	—	$	1,418	$	1,418	$	—	$	—

Common / Collective Trusts
Long Credit	25,317		—		25,317		—		44,239		—		44,239		—
Intermediate Credit	17,972		—		17,972		—		8		—		8		—
Global Real Estate	2,894		—		2,894		—		2,623		—		2,623		—
High Yield	2,674		—		2,674		—		2,629		—		2,629		—
U.S. Equity Index	2,183		—		2,183		—		2,165		—		2,165		—
International Equities	2,034		—		2,034		—		2,172		—		2,172		—
U.S. Small Cap	1,122		—		1,122		—		1,075		—		1,075		—

Total	$	55,292	$	1,096	$	54,196	$	—	$	56,329	$	1,418	$	54,911	$	—

Savings Plans

We have a savings plan with a 401(k) deferral feature and a nonqualified deferred compensation plan with a similar deferral feature for eligible employees. We contribute a matching percentage of employee contributions. Our matching contributions are subject to Internal Revenue Service (“IRS”) regulations. For 2014, 2013, and 2012, we expensed $5.9 million, $5.7 million, and $5.6 million, respectively, related to our matching contributions. In connection with our nonqualified deferred compensation plan, we had liabilities of $17.2 million and $21.4 million at January 31, 2015 and February 1, 2014, respectively.