Employee Benefit Plans

12 Months Ended

Jan. 30, 2021

Postemployment Benefits [Abstract]

Employee Benefit Plans

K. 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 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). For fiscal 2021, the amortization of the unrecognized loss will be calculated based on the average remaining lifetime of all employees, as

opposed to the average remaining future service of active employees.  As a result of this change in amortization, the Company expects a decrease in net periodic pension cost in fiscal 2021 of $50,000.

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 January 30, 2021 and February 1, 2020:

	January 30, 2021			February 1, 2020
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	16,217		$	14,975
Benefits and expenses paid		(877	)		(869	)
Interest costs		430			581
Settlements		(410	)		(490	)
Actuarial loss		504			2,020
Balance at end of year	$	15,864		$	16,217
Change in fair value of plan assets:
Balance at beginning of period	$	11,483		$	11,365
Actual return on plan assets		544			1,057
Employer contributions		611			420
Settlements		(410	)		(490	)
Benefits and expenses paid		(877	)		(869	)
Balance at end of period	$	11,351		$	11,483
Reconciliation of funded status:
Projected benefit obligation	$	15,864		$	16,217
Fair value of plan assets		11,351			11,483
Unfunded status	$	(4,513	)	$	(4,734	)
Balance sheet classification:
Other long-term liabilities	$	4,513		$	4,734

Total plan expense and other amounts recognized in accumulated other comprehensive loss for the years ended January 30, 2021, February 1, 2020 and February 2, 2019 include the following components:

	January 30, 2021			February 1, 2020			February 2, 2019
Net pension cost:	(in thousands)
Interest cost on projected benefit obligation	$	430		$	581		$	580
Expected return on plan assets		(737	)		(724	)		(890	)
Amortization of unrecognized loss		989			784			662
Net pension cost	$	682		$	641		$	352
Other changes recognized in other comprehensive loss,    before taxes:
Unrecognized losses at the beginning of the year	$	7,206		$	6,303		$	5,903
Net periodic pension cost		(682	)		(641	)		(352	)
Employer contribution		611			420			571
Change in plan assets and benefit obligations		(221	)		1,124			181
Unrecognized losses at the end of year	$	6,914		$	7,206		$	6,303

The Company’s contribution for fiscal 2021 is estimated to be approximately $622,000.

Assumptions used to determine the benefit obligations as of January 30, 2021 and February 1, 2020 include a discount rate of 2.39% for fiscal 2020 and 2.72% for fiscal 2019. Assumptions used to determine the net periodic benefit cost for the years ended January 30, 2021, February 1, 2020 and February 2, 2019 included a discount rate of 2.72% for fiscal 2020, 3.98% for fiscal 2019 and 3.68% for fiscal 2018.

The expected long-term rate of return for plan assets was assumed to be 6.50% for both fiscal 2020 and fiscal 2019. 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)
2021	$	898
2022		909
2023		926
2024		925
2025		918
2026-2030		4,599

Plan Assets

The fair values of the Company’s noncontributory defined benefit retirement plan assets at the end of fiscal 2020 and fiscal 2019, by asset category, were as follows:

	Fair Value Measurement
	January 30, 2021								February 1, 2020
(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:
Mutual Funds:
U.S. Equity	$	4,071		—		—	$	4,071	$	4,157		—		—	$	4,157
International Equity		2,939		—		—		2,939		3,132		—		—		3,132
Fixed Income Funds		3,527		—		—		3,527		3,754		—		—		3,754
Cash		814		—		—		814		440		—		—		440
Total	$	11,351	$	—	$	—	$	11,351	$	11,483	$	—	$	—	$	11,483

The Company’s target asset allocation for fiscal 2021 and its asset allocation at January 30, 2021 and February 1, 2020 were as follows, by asset category:

	Target Allocation			Percentage of plan assets at
	Fiscal 2021			January 30, 2021			February 1, 2020
Asset category:
Equity securities		63.0	%		61.7	%		63.5	%
Debt securities		35.0	%		31.1	%		32.7	%
Cash		2.0	%		7.2	%		3.8	%
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 30, 2021 and February 1, 2020:

	January 30, 2021			February 1, 2020
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	547		$	507
Benefits and expenses paid		(38	)		(33	)
Interest costs		14			19
Actuarial loss		40			54
Balance at end of year	$	563		$	547
Change in fair value of plan assets:
Balance at beginning of period	$	—		$	—
Employer contributions		38			33
Benefits and expenses paid		(38	)		(33	)
Balance at end of period	$	—		$	—
Projected benefit obligation	$	563		$	547
Reconciliation of funded status:
Projected benefit obligation	$	563		$	547
Fair value of plan assets		—			—
Unfunded Status	$	(563	)	$	(547	)
Balance sheet classification:
Other long-term liabilities	$	563		$	547

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

	January 30, 2021			February 1, 2020			February 2, 2019
	in thousands
Other changes recognized in other comprehensive loss,    before taxes:
Unrecognized losses at the beginning of the year	$	82		$	28		$	37
Net periodic pension cost		(15	)		(19	)		(19	)
Employer contribution		38			33			33
Change in  benefit obligations		15			40			(23	)
Unrecognized losses at the end of year	$	120		$	82		$	28

Assumptions used to determine the benefit obligations as of January 30, 2021 and February 1, 2020 included a discount rate of 2.24% for fiscal 2020 and 2.59% for fiscal 2019. Assumptions used to determine the net periodic benefit cost for the years ended January 30, 2021, February 1, 2020 and February 2, 2019 included a discount rate of 2.59% for fiscal 2020, 3.87% for fiscal 2019 and 3.60% for fiscal 2018.

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).  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.  

In the second quarter of fiscal 2018, the Board ratified and approved the recommendation of the Company’s management team to suspend employer contributions to the 401(k) Plan, for the period from July 1, 2018 until December 31, 2019. Effective January 1, 2020, the 401(k) Plan resumed its QACA status, as described above. For the 2021 plan year, the Company suspended its QACA safe harbor and, while the Company has the discretion to make an employer match for 2021, it will not be required.  The Company has the option to resume its QACA status in 2022.

The Company recognized $1.5 million, $0.3 million and $0.9 million of expense under the 401(k) Plan in fiscal 2020, 2019 and 2018, respectively.