I. EMPLOYEE BENEFIT PLANS

The Company accounts for its employee benefit plans in accordance with ASC Topic 715 Compensation – Retirement Benefits. ASC Topic 715 requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur.

These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of accumulated other comprehensive income (loss). The amortization of the unrecognized loss included in accumulated other comprehensive income (loss) and expected to be recognized in net periodic pension cost in fiscal 2017 is approximately $788,000.

Noncontributory Pension Plan

In connection with the Casual Male acquisition, the Company assumed the assets and liabilities of the Casual Male Noncontributory Pension Plan “Casual Male Corp. Retirement Plan”, which was previously known as the J. Baker, Inc. Qualified Plan (the “Pension Plan”). Casual Male Corp. froze all future benefits under this plan on May 1, 1997.

The following table sets forth the Pension Plan’s funded status at January 28, 2017 and January 30, 2016:

	January 28, 2017			January 30, 2016
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	16,845		$	18,927
Benefits and expenses paid		(733	)		(668	)
Interest costs		686			634
Settlements		(346	)		(21	)
Actuarial (gain) loss		4			(2,027	)

Balance at end of year	$	16,456		$	16,845

Change in fair value of plan assets
Balance at beginning of period	$	11,969		$	12,945
Actual return on plan assets		844			(433	)
Employer contributions		—			146
Settlements		(346	)		(21	)
Benefits and expenses paid		(733	)		(668	)

Balance at end of period	$	11,734		$	11,969

Reconciliation of Funded Status
Projected benefit obligation	$	16,456		$	16,845
Fair value of plan assets		11,734			11,969
Unfunded Status	$	(4,722	)	$	(4,876	)

Balance Sheet Classification
Other long-term liabilities	$	4,722		$	4,876

Total plan expense and other amounts recognized in accumulated other comprehensive loss for the years ended January 28, 2017, January 30, 2016 and January 31, 2015 include the following components:

	January 28, 2017			January 30, 2016			January 31, 2015
Net pension cost:	(in thousands)
Interest cost on projected benefit obligation	$	686		$	634		$	669
Expected return on plan assets		(927	)		(1,013	)		(1,002	)
Amortization of unrecognized loss		946			1,026			591
Net pension cost	$	705		$	647		$	258

Other changes recognized in other comprehensive loss, before taxes:
Unrecognized losses at the beginning of the year	$	8,139		$	9,746		$	6,614
Net periodic pension cost		(705	)		(647	)		(258	)
Employer contribution		—			146			468
Change in plan assets and benefit obligations		(154	)		(1,106	)		2,922
Unrecognized losses at the end of year	$	7,280		$	8,139		$	9,746

The Company’s contribution for fiscal 2017 is estimated to be approximately $586,000.

Assumptions used to determine the benefit obligations as of January 28, 2017 and January 30, 2016 include a discount rate of 4.00% for fiscal 2016 and 4.16% for fiscal 2015. Assumptions used to determine the net periodic benefit cost for the years ended January 28, 2017, January 30, 2016 and January 31, 2015 included a discount rate of 4.00% for fiscal 2016, 4.16% for fiscal 2015 and 3.42% for fiscal 2014.

The expected long-term rate of return for plan assets was assumed to be 8.00% for both fiscal 2016 and fiscal 2015. The expected long-term rate of return assumption was developed considering historical and future expectations for returns for each asset class.

Estimated Future Benefit Payments

The estimated future benefits for the next ten fiscal years are as follows:

	Total
FISCAL YEAR	(in thousands)
2017	$	804
2018		836
2019		867
2020		945
2021		977
2022-2026		5,145
	$	9,574

Plan Assets

The fair values of the Company’s noncontributory defined benefit retirement plan assets at the end of fiscal 2016 and fiscal 2015, by asset category, were as follows:

	Fair Value Measurement
	January 28, 2017								January 30, 2016
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Asset category:
Common Stock :
U.S.	$	2,645	$	—	$	—	$	2,645	$	6,537	$	—	$	—	$	6,537
Foreign		210		—		—		210		—		—		—		—
Mutual Funds:
U.S. Equity		2,153		—		—		2,153		407		—		—		407
International Equity		2,039		—		—		2,039		1,596		—		—		1,596
Bond		4,418		—		—		4,418		2,914		—		—		2,914
Real Estate Investment Trust		6		—		—		6		—		—		—		—
Cash		263		—		—		263		515		—		—		515
Total	$	11,734	$	—	$	—	$	11,734	$	11,969	$	—	$	—	$	11,969

The Company’s target asset allocation for fiscal 2017 and its asset allocation at January 28, 2017 and January 30, 2016 were as follows, by asset category:

	Target Allocation			Percentage of plan assets at
	Fiscal 2017			January 28, 2017			January 30, 2016
Asset category:
Equity securities		60.0	%		60.1	%		71.4	%
Debt securities		38.0	%		37.7	%		24.3	%
Cash		2.0	%		2.2	%		4.3	%
Total		100.0	%		100.0	%		100.0	%

The target policy is set to maximize returns with consideration to the long-term nature of the obligations and maintaining a lower level of overall volatility through the allocation of fixed income. The asset allocation is reviewed throughout the year for adherence to the target policy and is rebalanced periodically towards the target weights.

Supplemental Executive Retirement Plan

In connection with the Casual Male acquisition, the Company also assumed the liability of the Casual Male Supplemental Retirement Plan (the “SERP”).

The following table sets forth the SERP’s funded status at January 28, 2017 and January 30, 2016:

	January 28, 2017			January 30, 2016
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	670		$	745
Benefits and expenses paid		(30	)		(30	)
Interest costs		27			25
Actuarial (gain) loss		(15	)		(70	)
Balance at end of year	$	652		$	670

Change in fair value of plan assets
Balance at beginning of period	$	—		$	—
Employer contributions		30			30
Benefits and expenses paid		(30	)		(30	)
Balance at end of period	$	—		$	—

Projected benefit obligation	$	652		$	670

Reconciliation of Funded Status
Projected benefit obligation	$	652		$	670
Fair value of plan assets		—			—
Unfunded Status	$	(652	)	$	(670	)

Balance Sheet Classification
Other long-term liabilities	$	652		$	670

Other changes recognized in other comprehensive loss, before taxes (in thousands):

	January 28, 2017			January 30, 2016			January 31, 2015
Other changes recognized in other comprehensive loss, before taxes:	in thousands
Unrecognized losses at the beginning of the year	$	178		$	256		$	142
Net periodic pension cost		(33	)		(34	)		(31	)
Employer contribution		30			30			30
Change in benefit obligations		(18	)		(74	)		115
Unrecognized losses at the end of year	$	157		$	178		$	256

Assumptions used to determine the benefit obligations as of January 28, 2017 and January 30, 2016 included a discount rate of 4.00% for fiscal 2016 and 4.16% for fiscal 2015. Assumptions used to determine the net periodic benefit cost for the years ended January 28, 2017, January 30, 2016 and January 31, 2015 included a discount rate of 4.00% for fiscal 2016, 4.16% for fiscal 2015 and 3.42% for fiscal 2014.

Defined Contribution Plan

The Company has one defined contribution plan, the Destination XL Group, Inc. 401(k) Savings Plan (the “401(k) Plan”). Under the 401(k) Plan, the Company offers a qualified automatic contribution arrangement (“QACA”) with the Company matching 100% of the first 1% of deferred compensation and 50% of the next 5% (with a maximum contribution of 3.5% of eligible compensation). As of January 1, 2015, employees who are 21 years of age or older are eligible to make deferrals after 6 months of employment and are eligible to receive a Company match after one year of employment and 1,000 hours.

The Company recognized $2.2 million, $2.0 million and $1.6 million of expense under this plan in fiscal 2016, fiscal 2015 and fiscal 2014, respectively.