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 2018 is approximately $699,000.

Noncontributory Pension Plan

In connection with the Casual Male acquisition in May 2002, 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 February 3, 2018 and January 28, 2017:

	February 3, 2018			January 28, 2017
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	16,456		$	16,845
Benefits and expenses paid		(775	)		(733	)
Interest costs		641			686
Settlements		(410	)		(346	)
Actuarial loss		372			4
Balance at end of year	$	16,284		$	16,456

Change in fair value of plan assets:
Balance at beginning of period	$	11,734		$	11,969
Actual return on plan assets		1,720			844
Employer contributions		586			—
Settlements		(410	)		(346	)
Benefits and expenses paid		(775	)		(733	)
Balance at end of period	$	12,855		$	11,734

Reconciliation of Funded Status
Projected benefit obligation	$	16,284		$	16,456
Fair value of plan assets		12,855			11,734
Unfunded Status	$	(3,429	)	$	(4,722	)

Balance Sheet Classification
Other long-term liabilities	$	3,429		$	4,722

Total plan expense and other amounts recognized in accumulated other comprehensive loss for the years ended February 3, 2018, January 28, 2017 and January 30, 2016 include the following components:

	February 3, 2018			January 28, 2017			January 30, 2016
Net pension cost:	(in thousands)
Interest cost on projected benefit obligation	$	641		$	686		$	634
Expected return on plan assets		(813	)		(927	)		(1,013	)
Amortization of unrecognized loss		842			946			1,026
Net pension cost	$	670		$	705		$	647

Other changes recognized in other comprehensive loss, before taxes:
Unrecognized losses at the beginning of the year	$	7,280		$	8,139		$	9,746
Net periodic pension cost		(670	)		(705	)		(647	)
Employer contribution		586			—			146
Change in plan assets and benefit obligations		(1,293	)		(154	)		(1,106	)
Unrecognized losses at the end of year	$	5,903		$	7,280		$	8,139

The Company’s contribution for fiscal 2018 is estimated to be approximately $628,000.

Assumptions used to determine the benefit obligations as of February 3, 2018 and January 28, 2017 include a discount rate of 3.68% for fiscal 2017 and 4.00% for fiscal 2016. Assumptions used to determine the net periodic benefit cost for the years ended February 3, 2018, January 28, 2017 and January 30, 2016 included a discount rate of 3.68% for fiscal 2017, 4.00% for fiscal 2016 and 4.16% for fiscal 2015.

The expected long-term rate of return for plan assets was assumed to be 7.00% for fiscal 2017 and 8.00% for fiscal 2016. 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)
2018	$	857
2019		878
2020		936
2021		961
2022		980
2023-2027		5,048
	$	9,660

Plan Assets

The fair values of the Company’s noncontributory defined benefit retirement plan assets at the end of fiscal 2017 and fiscal 2016, by asset category, were as follows:

	Fair Value Measurement
	February 3, 2018								January 28, 2017
(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
Foreign		—		—		—		—		210		—		—		210
Mutual Funds:
U.S. Equity		4,789		—		—		4,789		2,153		—		—		2,153
International Equity		3,662		—		—		3,662		2,039		—		—		2,039
Bond		4,074		—		—		4,074		4,418		—		—		4,418
Real Estate Investment Trust		-		—		—		—		6		—		—		6
Cash		330		—		—		330		263		—		—		263
Total	$	12,855	$	—	$	—	$	12,855	$	11,734	$	—	$	—	$	11,734

The Company’s target asset allocation for fiscal 2018 and its asset allocation at February 3, 2018 and January 28, 2017 were as follows, by asset category:

	Target Allocation			Percentage of plan assets at
	Fiscal 2018			February 3, 2018			January 28, 2017
Asset category:
Equity securities		60.0	%		65.7	%		60.1	%
Debt securities		38.0	%		31.7	%		37.7	%
Cash		2.0	%		2.6	%		2.2	%
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 February 3, 2018 and January 28, 2017:

	February 3, 2018			January 28, 2017
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	652		$	670
Benefits and expenses paid		(32	)		(30	)
Interest costs		25			27
Actuarial gain		(115	)		(15	)
Balance at end of year	$	530		$	652

Change in fair value of plan assets
Balance at beginning of period	$	—		$	—
Employer contributions		32			30
Benefits and expenses paid		(32	)		(30	)
Balance at end of period	$	—		$	—

Projected benefit obligation	$	530		$	652

Reconciliation of Funded Status
Projected benefit obligation	$	530		$	652
Fair value of plan assets		—			—
Unfunded Status	$	(530	)	$	(652	)

Balance Sheet Classification
Other long-term liabilities	$	530		$	652

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

	February 3, 2018			January 28, 2017			January 30, 2016
Other changes recognized in other comprehensive loss, before taxes:	in thousands
Unrecognized losses at the beginning of the year	$	157		$	178		$	256
Net periodic pension cost		(30	)		(33	)		(34	)
Employer contribution		32			30			30
Change in benefit obligations		(122	)		(18	)		(74	)
Unrecognized losses at the end of year	$	37		$	157		$	178

Assumptions used to determine the benefit obligations as of February 3, 2018 and January 28, 2017 included a discount rate of 3.60% for fiscal 2017 and 4.00% for fiscal 2016. Assumptions used to determine the net periodic benefit cost for the years ended February 3, 2018, January 28, 2017 and January 30, 2016 included a discount rate of 3.60% for fiscal 2017, 4.00% for fiscal 2016 and 4.16% for fiscal 2015.

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 $2.3 million, $2.2 million and $2.0 million of expense under this plan in fiscal 2017, 2016 and 2015, respectively.