Employee Retirement Benefits

12 Months Ended

Jan. 31, 2018



NOTE 8	EMPLOYEE POSTRETIREMENT BENEFITS

Defined contribution 401(k) plan

As of January 1, 2018, the Company has one 401(k) plan covering substantially all employees. This plan, which covers the majority of employees, matches employee contributions up to 5%. Prior to January 1, 2018, the plan matched 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. The Company also contributes to post-retirement and pensions as are required or customary for employees in foreign locations.

Deferred compensation plan

Effective January 1, 2018, the Company established a section 409A non-qualified deferred compensation plan. The purpose of the deferred compensation plan is to attract and retain key employees by providing them with an opportunity to defer receipt of a portion of their compensation, and there is no standard Company contribution or match. Participants are approved by the Board of Director's Personnel and Compensation Committee which is also responsible for the deferred compensation plan's general administration. A rabbi trust was also established in January 2018 which the Company may elect to make contributions to in order to provide a source of funds to assist the Company in meeting its obligation. Any assets held by the deferred compensation plan are still part of the Company's general assets and are subject to creditor's claims. The Company's common stock is not an investment option.

Total contribution expense to all such plans was $2,263, $2,030, and $1,952 for fiscal 2018, 2017, and 2016, respectively, and all of these contributions were to the 401(k) plan.

Defined benefit postretirement plan

In addition, the Company provides postretirement medical and other benefits to senior executive officers and senior managers. The accumulated benefit obligation is as follows:



	For the years ended January 31,
	2018			2017
Benefit obligation at beginning of year	$	8,416		$	7,991
Service cost	74			80
Interest cost	312			333
Actuarial loss (gain) and assumption changes	112			341
Retiree benefits paid	(343		)	(329		)
Benefit obligation at end of year	$	8,571		$	8,416

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



	For the years ended January 31,
	2018			2017
Amounts not yet recognized in net periodic benefit cost:
Net actuarial loss	$	2,714		$	2,699
Prior service cost	(572		)	(732		)
Total pre-tax accumulated other comprehensive loss	$	2,142		$	1,967

Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation	$	1,967		$	1,612
Reclassification adjustments recognized in benefit cost:
Recognized net (loss)	(96		)	(146		)
Amortization of prior service cost	159			160
Amounts recognized in AOCI during the year:
Net actuarial loss (gain)	112			341
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation	$	2,142		$	1,967

The net actuarial loss for fiscal year 2018 was the result of a decrease in the discount rate and unfavorable demographic experience partially offset by medical costs trending lower than expected. 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 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,
	2018			2017
Beginning liability balance	$	8,416		$	7,991
Net periodic benefit cost	323			399
Other comprehensive loss	175			355
Total recognized in net periodic benefit cost and other comprehensive income	498			754
Retiree benefits paid	(343		)	(329		)
Ending liability balance	$	8,571		$	8,416

Current portion in accrued liabilities	$	307		$	362
Long-term portion in other liabilities	$	8,264		$	8,054

Assumptions used to calculate benefit obligation:
Discount rate	3.75		%	4.00		%
Rate of compensation increase	4.00		%	4.00		%
Health care cost trend rates:
Health care cost trend rate assumed for next year	6.50		%	6.67		%
Ultimate health care cost trend rate	4.50		%	4.50		%
Year that the rate reaches the ultimate trend rate	2030			2030
Assumptions used to calculated the net periodic benefit cost:
Discount rate	4.00		%	4.25		%
Rate of compensation increase	4.00		%	4.00		%

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 $(31); $129 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, 2018
	One-percentage-point increase		One-percentage-point decrease
Effect on total of service and interest cost components	$	71	$	(58	)
Effect on accumulated postretirement benefit obligation	$	1,180	$	(1,045	)

The Company expects to make $313 in postretirement medical and other benefit payments in fiscal 2019. The following postretirement other than pension benefit payments, which reflect expected future service as appropriate, are expected to be paid:



	2019		2020		2021		2022		2023 - 2028
Expected postretirement medical and other benefit payments	$	313	$	323	$	332	$	341	$	2,192