Postretirement Benefits

12 Months Ended

Nov. 30, 2023

Retirement Benefits [Abstract]

Postretirement Benefits

Postretirement Benefits

We have a supplemental non-qualified, unfunded retirement plan, the KB Home Retirement Plan (“Retirement Plan”), effective as of July 11, 2002, pursuant to which we have offered to pay supplemental pension benefits to certain designated individuals (consisting of current and former employees) in connection with their retirement. The Retirement Plan was closed to new participants in 2004. We also have an unfunded death benefit plan, the KB Home Death Benefit Only Plan (“DBO Plan”), implemented on November 1, 2001, for certain designated individuals (consisting of current and former employees). The DBO Plan was closed to new participants in 2006.

In connection with these plans and two other minor benefit programs, we have purchased cost recovery life insurance contracts on the lives of the designated individuals. The insurance contracts associated with the Retirement Plan and DBO Plan are held by a trust. The trust is the owner and beneficiary of such insurance contracts. The amount of the insurance coverage under the contracts is designed to provide sufficient funds to cover all costs of the plans if assumptions made as to employment term, mortality experience, policy earnings and other factors, as applicable, are realized. The cash surrender value of the Retirement Plan life insurance contracts was $33.1 million at November 30, 2023 and $35.3 million at November 30, 2022. We recognized an investment gain on the cash surrender value of the Retirement Plan life insurance contracts of $.1 million in 2023, and investment losses of $3.1 million and $1.1 million in 2022 and 2021, respectively. In 2023, 2022 and 2021, we paid $2.3 million, $2.0 million and $1.9 million, respectively, in benefits under the Retirement Plan to eligible former employees. The cash surrender value of the DBO Plan life insurance contracts was $16.9 million at November 30, 2023 and $16.8 million at November 30, 2022. We recognized an investment gain on the cash surrender value of the DBO Plan life insurance contracts of $.1 million in 2023, and investment losses of $1.5 million and $.3 million in 2022 and 2021, respectively. In 2022, we paid $.7 million in benefits under the DBO Plan. We did not pay out any benefits under the DBO Plan in 2023 or 2021.

The net periodic benefit cost of our Retirement Plan and DBO Plan is included in selling, general and administrative expenses in our consolidated statements of operations and consisted of the following (in thousands):

	Years Ended November 30,
	2023		2022		2021
Interest cost	$	2,884	$	1,853	$	1,593
Amortization of prior service cost	—		—		85
Service cost	720		1,132		1,152
Amortization of net actuarial (gain) loss	(112)		998		1,443
Total	$	3,492	$	3,983	$	4,273

The liabilities related to these plans were $60.1 million at November 30, 2023 and $61.4 million at November 30, 2022, and are included in accrued expenses and other liabilities in the consolidated balance sheets. For the years ended November 30, 2023 and 2022, the discount rates we used for the plans were approximately 5.2% and 4.8%, respectively.

Benefit payments under our Retirement Plan and DBO Plan are expected to be paid during each year ending November 30 as follows: 2024 — $3.1 million; 2025 — $3.6 million; 2026 — $4.6 million; 2027 — $4.7 million; 2028 — $4.7 million; and for the five years ended November 30, 2033 — $24.2 million in the aggregate.