

NOTE 7	EMPLOYEE POSTRETIREMENT BENEFITS

The Company has two 401(k) plans covering substantially all employees as of January 31, 2014. One plan, which covers the majority of employees, matches employee contributions up to 4%. Under this plan all account balances and future contributions and related earnings can be invested in several investment alternatives as well as Raven's common stock in accordance with each participant's elections. Participants' contributions to the 401(k) and the employer matching contributions are limited to 20% investment in Raven's common stock. Participants may choose to make separate investment choices for current account balances and for future contributions. The other 401(k) plan was assumed as part of the Vista acquisition. Contributions under this plan include a 3% annual contribution and may include additional discretionary contributions to the plan that are determined annually by management. Total contribution expense to such plans was $2,412, $2,021 and $1,556 for fiscal 2014, 2013 and 2012, respectively.

In addition, the Company provides postretirement medical and other benefits to senior executive officers and senior managers. These plan obligations are unfunded. The accumulated benefit obligation for these benefits is as follows:



	For the years ended January 31,
	2014			2013			2012
Benefit obligation at beginning of year	$	8,307		$	7,560		$	5,969
Service cost	202			187			121
Interest cost	348			335			334
Actuarial (gain) loss and assumption changes	(340		)	433			1,363
Retiree benefits paid	(263		)	(208		)	(227		)
Benefit obligation at end of year	$	8,254		$	8,307		$	7,560

The following tables set forth the plans pre-tax adjustment to accumulated other comprehensive income/loss:



	For the years ended January 31,
	2014			2013			2012
Amounts not yet recognized in net periodic benefit cost:
Net actuarial loss	$	2,918		$	3,441		$	3,218
Transition obligation	—			—			23
Total pre-tax accumulated other comprehensive loss	$	2,918		$	3,441		$	3,241

Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation	$	3,441		$	3,241		$	1,957
Reclassification adjustments recognized in benefit cost:
Recognized net (loss)	(183		)	(210		)	(104		)
Amortization of transition obligation	—			(23		)	(23		)
Amounts recognized in AOCI during the year:
Net actuarial (gain) loss	(340		)	433			1,411
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation	$	2,918		$	3,441		$	3,241

The net actuarial gain for fiscal year 2014 was driven by an increase in the discount rate The net actuarial loss in fiscal year 2013 was driven by a decrease in the discount rate and demographic changes, partially offset by better than expected claims experience. The net actuarial loss in fiscal year 2012 was primarily caused by the decrease in discount rate.

The liability and net periodic benefit cost reflected in the Consolidated Balance Sheets and Consolidated Statements of Income and Comprehensive Income were as follows:



	For the years ended January 31,
	2014			2013			2012
Beginning liability balance	$	8,307		$	7,560		$	5,969
Net periodic benefit cost	733			755			582
Other comprehensive (income) loss	(523		)	200			1,236
Total recognized in net and other comprehensive income	210			955			1,818
Retiree benefits paid	(263		)	(208		)	(227		)
Ending liability balance	$	8,254		$	8,307		$	7,560

Current portion in accrued liabilities	$	255		$	235		$	212
Long-term portion in other liabilities	$	7,999		$	8,072		$	7,348

Assumptions used to calculate benefit obligation:
Discount rate	4.50		%	4.25		%	4.50		%
Wage inflation rate	4.00		%	4.00		%	4.00		%
Health care cost trend rates:
Health care cost trend rate assumed for next year	7.70		%	8.10		%	8.60		%
Ultimate health care cost trend rate	5.00		%	5.00		%	5.00		%
Year that the rate reaches the ultimate trend rate	2025			2025			2025

The discount rate is based on matching rates of return on high-quality fixed-income investments with the timing and amount of expected benefit payments. No material fluctuations in retiree benefit payments are expected in future years. The total estimated cost to be recognized from AOCI into net periodic benefit cost over the next fiscal year is $153.

The assumed health care cost trend rate has a significant effect on the amounts reported. The impact of a one-percentage point change in assumed health care rates would have the following effects:



	January 31, 2014
	One-percentage-point increase		One-percentage-point decrease
Effect on total of service and interest cost components	$	145	$	(107	)
Effect on accumulated postretirement benefit obligation	$	1,542	$	(1,198	)