

NOTE 7	EMPLOYEE POSTRETIREMENT BENEFITS

The Company has two 401(k) plans covering substantially all employees as of January 31, 2016. 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 the Company'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 the Company's common stock. Participants may choose to make separate investment choices for current account balances and for future contributions. Officers of the Company may not include Raven's common stock in their 401(k) plan elections.

The other 401(k) plan was assumed as part of the Vista acquisition. Employee contributions under this plan are matched up to 4% under an amendment in fiscal 2015 to eliminate a 3% annual contribution and to eliminate a provision allowing an additional annual discretionary contribution. The Company also assumed an additional 401(k) profit sharing plan as part of the Integra acquisition. This plan was merged into Raven's 401(k) plan on December 31, 2014. The Company also contributes to post-retirement and pensions as are required or customary for employees in foreign locations. Total contribution expense to all such plans was $1,952, $2,416, and $2,412 for fiscal 2016, 2015, and 2014, respectively.

In addition, the Company provides postretirement medical and other benefits to senior executive officers and senior managers. These plan obligations are unfunded. On August 25, 2015 the Company amended the employment agreements with five of its senior executive officers eliminating the postretirement medical benefits to these individuals and their spouses. In consideration of eliminating this retiree benefit, the senior executive officers received lump sum payments in amounts ranging from $8 to $15 based on each officer’s years of service to the Company. The Company’s current senior executive officers that either already qualified for retirement or had twenty or more years of service to the Company are still eligible for benefits under their employment agreements. The elimination of coverage for these executives reduced the benefit obligation due to prior service by approximately

$1,000 as of August 31, 2015. The amount was recognized as a negative plan amendment and amortized over the average remaining years of service to full eligibility for active participants not yet fully eligible for benefits as of August 31, 2015. The accumulated benefit obligation, including the impact of the August 31, 2015 remeasurement resulting from the plan amendment, for these benefits is as follows:



	For the years ended January 31,
	2016			2015			2014
Benefit obligation at beginning of year	$	12,125		$	8,254		$	8,307
Service cost	285			195			202
Interest cost	386			366			348
Amendments	(958		)	—			—
Actuarial (gain) loss and assumption changes	(3,544		)	3,543			(340		)
Retiree benefits paid	(303		)	(233		)	(263		)
Benefit obligation at end of year	$	7,991		$	12,125		$	8,254

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



	For the years ended January 31,
	2016			2015			2014
Amounts not yet recognized in net periodic benefit cost:
Net actuarial loss	$	2,504		$	6,309		$	2,918
Prior service cost	(892		)	—			—
Total pre-tax accumulated other comprehensive loss	$	1,612		$	6,309		$	2,918

Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation	$	6,309		$	2,918		$	3,441
Reclassification adjustments recognized in benefit cost:
Recognized net (loss)	(261		)	(152		)	(183		)
Amortization of prior service cost	66			—			—
Amounts recognized in AOCI during the year:
Prior service cost from amendments	(958		)	—			—
Net actuarial (gain) loss	(3,544		)	3,543			(340		)
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation	$	1,612		$	6,309		$	2,918

The net actuarial gain for fiscal year 2016 was the result of an increase in the discount rate, lower than expected claims, updated trend rates, and application of updated mortality assumptions. The net actuarial loss for fiscal year 2015 was the result of a decrease in the discount rate and application of updated mortality assumptions. The net actuarial gain in fiscal year 2014 was driven by an increase in the 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,
	2016			2015			2014
Beginning liability balance	$	12,125		$	8,254		$	8,307
Net periodic benefit cost	866			713			733
Other comprehensive (income) loss	(4,697		)	3,391			(523		)
Total recognized in net periodic benefit cost and other comprehensive income	(3,831		)	4,104			210
Retiree benefits paid	(303		)	(233		)	(263		)
Ending liability balance	$	7,991		$	12,125		$	8,254

Current portion in accrued liabilities	$	329		$	313		$	255
Long-term portion in other liabilities	$	7,662		$	11,812		$	7,999

Assumptions used to calculate benefit obligation:
Discount rate	4.25		%	3.50		%	4.50		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%
Health care cost trend rates:
Health care cost trend rate assumed for next year	6.83%^(a) \| 7.00%^(b)			7.20		%	7.70		%
Ultimate health care cost trend rate	4.50%^(a) \| 5.00%^(b)			5.00		%	5.00		%
Year that the rate reaches the ultimate trend rate	2030^(a) \| 2025^(b)			2025			2025
Assumptions used to calculated the net periodic benefit cost:
Discount rate	4.25%^(a)\| 3.50%^(b)			4.50		%	4.25		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%

^(a)Assumptions used for the five months of fiscal 2016 following the August 31, 2015 remeasurement.

^(b)Assumptions used for the seven months of fiscal 2016 prior to the plan amendment triggering the August 31, 2015 remeasurement.

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 $(13); $146 of recognized net loss and

$(159) of amortized prior service cost.

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, 2016
	One-percentage-point increase		One-percentage-point decrease
Effect on total of service and interest cost components	$	89	$	(68	)
Effect on accumulated postretirement benefit obligation	$	1,445	$	(1,129	)

The Company expects to make $329 in postretirement medical and other benefit payments in fiscal 2017. The following postretirement other than pension benefit payments, which reflect expected future service as appropriate, are expected to be paid:



Fiscal	2017	$	329
Fiscal	2018	350
Fiscal	2019	352
Fiscal	2020	347
Fiscal	2021 - 2025	2,299