

NOTE 7	EMPLOYEE POSTRETIREMENT BENEFITS

As of January 1, 2017, the Company has one 401(k) plan covering substantially all employees. This 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 may choose to make separate investment choices for current account balances and for future contributions. As a result of changes to the plan’s permissible investment options effective January 1, 2017, participants' contributions to the 401(k) and the employer matching contributions are limited to 10% investment in the Company's common stock. This limit was previously 20%. The plan does not allow a participant to exchange more than 10% of their existing account balance into the Company’s common stock nor permit exchanges that would cause the participant’s investment in the Company’s common stock to exceed 10%. Officers of the Company may not include Raven's common stock in their 401(k) plan elections.

Prior to January 1, 2017, the Company had a second 401(k) plan that was assumed as part of the Vista acquisition. This plan was terminated December 31, 2016 and all participant contributions were merged into the plan previously described. Employee contributions under this plan were 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 $2,030, $1,952, and $2,416 for fiscal 2017, 2016, and 2015, 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 eliminated postretirement medical benefits to five of its senior executive officers and their spouses. In consideration of the elimination of this retiree benefit, each senior executive officer received a lump sum payment in an amount ranging from $8 to $15 based on the officer’s years of service to the Company. At the time of this amendment, the Company’s senior executive officers that either already qualified for retirement or had twenty or more years of service to the Company remained 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 is being 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 plan amendment and remeasurement during fiscal 2016, for these benefits is as follows:



	For the years ended January 31,
	2017			2016			2015
Benefit obligation at beginning of year	$	7,991		$	12,125		$	8,254
Service cost	80			285			195
Interest cost	333			386			366
Amendments	—			(958		)	—
Actuarial loss (gain) and assumption changes	341			(3,544		)	3,543
Retiree benefits paid	(329		)	(303		)	(233		)
Benefit obligation at end of year	$	8,416		$	7,991		$	12,125

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



	For the years ended January 31,
	2017			2016			2015
Amounts not yet recognized in net periodic benefit cost:
Net actuarial loss	$	2,699		$	2,504		$	6,309
Prior service cost	(732		)	(892		)	—
Total pre-tax accumulated other comprehensive loss	$	1,967		$	1,612		$	6,309

Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation	$	1,612		$	6,309		$	2,918
Reclassification adjustments recognized in benefit cost:
Recognized net (loss)	(146		)	(261		)	(152		)
Amortization of prior service cost	160			66			—
Amounts recognized in AOCI during the year:
Prior service cost from amendments	—			(958		)	—
Net actuarial loss (gain)	341			(3,544		)	3,543
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation	$	1,967		$	1,612		$	6,309

The net actuarial loss for fiscal year 2017 was the result of a decrease in the discount rate, a decrease in the average life expectancy by approximately half a year based on the application of an updated mortality projection scale, and census changes. The net actuarial gain for fiscal year 2016 was the result of the negative plan amendment, an increase in the discount rate, lower than expected claims, updated trend rates, and application of updated mortality assumptions in which the average life expectancy increased. The net actuarial loss for fiscal year 2015 was result of a decrease in the discount rate and application of updated mortality assumptions in which the average life expectancy increased.

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,
	2017			2016			2015
Beginning liability balance	$	7,991		$	12,125		$	8,254
Net periodic benefit cost	399			866			713
Other comprehensive loss (income)	355			(4,697		)	3,391
Total recognized in net periodic benefit cost and other comprehensive income	754			(3,831		)	4,104
Retiree benefits paid	(329		)	(303		)	(233		)
Ending liability balance	$	8,416		$	7,991		$	12,125

Current portion in accrued liabilities	$	362		$	329		$	313
Long-term portion in other liabilities	$	8,054		$	7,662		$	11,812

Assumptions used to calculate benefit obligation:
Discount rate	4.00		%	4.25		%	3.50		%
Rate of compensation increase	4.00		%	4.00		%	4.00		%
Health care cost trend rates:
Health care cost trend rate assumed for next year	6.67		%	6.83%^(a) \| 7.00%^(b)			7.20		%
Ultimate health care cost trend rate	4.50		%	4.50%^(a) \| 5.00%^(b)			5.00		%
Year that the rate reaches the ultimate trend rate	2030			2030^(a) \| 2025^(b)			2025
Assumptions used to calculated the net periodic benefit cost:
Discount rate	4.25		%	4.25%^(a)\| 3.50%^(b)			4.50		%
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 $(40); $120 of recognized net loss and

$(160) 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, 2017
	One-percentage-point increase		One-percentage-point decrease
Effect on total of service and interest cost components	$	91	$	(69	)
Effect on accumulated postretirement benefit obligation	$	1,486	$	(1,159	)

The Company expects to make $362 in postretirement medical and other benefit payments in fiscal 2018. The following postretirement other than pension benefit payments, which reflect expected future service as appropriate, are expected to be paid:



	2018		2019		2020		2021		2022 - 2027
Expected postretirement medical and other benefit payments	$	362	$	371	$	366	$	379	$	2,372