Employee Retirement Benefits

12 Months Ended

Jan. 31, 2021


NOTE 8			EMPLOYEE POSTRETIREMENT BENEFITS

Defined contribution 401(k) plan

The Company has one 401(k) plan covering substantially all employees and this plan matches employee contributions up to 5%. 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. Participants may elect to direct up to 10% of their contributions and the employers matching contributions to the 401(k) plan into the Company's common stock. In addition, the plan does not allow a participant to exchange more than 10% of their existing account balance into the Company’s common stock or permit exchanges that would cause the participant’s investment in the Company’s common stock to exceed 10% of the participant's total balance in the 401(k) plan. Officers of the Company may not include Raven's common stock in their 401(k) plan elections.

Total contribution expense was $3,935, $3,696, and $3,006 for fiscal 2021, 2020, and 2019, respectively.

Deferred compensation plan

Effective January 1, 2018, the Company established a section 409A non-qualified deferred compensation plan (the "Plan") and associated rabbi trust for participants approved by the Board of Director's Personnel and Compensation Committee. The purpose of the deferred compensation plan is to attract and retain key employees by providing them with an opportunity to defer a portion of their compensation. The Plan's rabbi trust is funded from the participant's deferred compensation as the Company does not contribute or match participant contributions. Any assets held in rabbi trust are part of the Company's general assets and are subject to creditor's claims. The Company's common stock is not an investment option under this Plan as all contributions to the rabbi trust are invested in open-end mutual funds registered with the Securities and Exchange Commission based on the participant's investment elections.

The Company reports these financial instruments at fair value using level 1 observable inputs and are primarily classified as long term assets and reported as "Other assets" in the Consolidated Balance Sheets. The fair value of the liability and financial instruments held were $1,697 and $1,691, respectively, at January 31, 2021. The fair value of the liability and financial instruments held were $1,363 and $1,358, respectively, at January 31, 2020. Changes in the fair value of these financial instruments, realized gains and losses, dividends, and interest income were reported in "Other income (expense), net" on the Consolidated Statements of Income and Comprehensive Income and were not material for fiscal years 2021, 2020 and 2019.

Defined benefit postretirement plan

In addition, the Company provides postretirement medical and other benefits to certain senior executive officers and senior managers. These plan obligations are unfunded and therefore have no assets as of January 31, 2021, and 2020. The accumulated benefit obligation is as follows:


	For the years ended January 31,
	2021		2020
Benefit obligation at beginning of year	$	9,073	$	8,001
Service cost	36		27
Interest cost	280		333
Actuarial loss and assumption changes	303		1,053
Retiree benefits paid	(332)		(341)
Benefit obligation at end of year	$	9,360	$	9,073

Service cost is reported in net income as "Cost of sales" or "Selling, general, and administrative expenses" in a manner consistent with the classification of direct labor and personnel costs of the eligible employees. The components of the net periodic benefit cost, other than the service cost component, are classified as a non-operating expense in "Other income (expense), net" on the Consolidated Statements of Income and Comprehensive Income.

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


	For the years ended January 31,
	2021		2020
Amounts not yet recognized in net periodic benefit cost:
Net actuarial loss	$	2,817	$	3,070
Prior service cost	290		(253)
Total pre-tax accumulated other comprehensive loss	$	3,107	$	2,817

Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation	$	2,817	$	1,701
Reclassification adjustments recognized in benefit cost:
Recognized net (loss)	(173)		(97)
Amortization of prior service cost	160		160
Amounts recognized in AOCI during the year:
Net actuarial loss	303		1,053
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation	$	3,107	$	2,817

The net actuarial loss for fiscal year 2021 was the result of a decrease in the discount rate by 24 basis points. The mortality assumptions, claims experience and demographics were also updated and were unfavorable to the benefit obligation at January 31, 2021 by approximately $31. The net actuarial loss for fiscal year 2020 was the result of a decrease in the discount rate by 111 basis points. The mortality assumptions and claims experience were also updated and were favorable to the benefit obligation at January 31, 2020 by approximately $400.

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,
	2021			2020
Beginning liability balance	$	9,073		$	8,001
Net periodic benefit cost	329			297
Other comprehensive loss	290			1,116
Total recognized in net periodic benefit cost and other comprehensive income	619			1,413
Retiree benefits paid	(332)			(341)
Ending liability balance	$	9,360		$	9,073

Current portion in accrued liabilities	$	364		$	332
Long-term portion in other liabilities	$	8,996		$	8,741

Assumptions used to calculate benefit obligation:
Discount rate	2.90		%	3.14		%
Rate of compensation increase	4.00		%	4.00		%
Health care cost trend rates:
Health care cost trend rate assumed for next year	6.00		%	6.17		%
Ultimate health care cost trend rate	4.50		%	4.50		%
Year that the rate reaches the ultimate trend rate	2030			2030
Assumptions used to calculate the net periodic benefit cost:
Discount rate	3.14		%	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 Company expects to make $369 in postretirement medical and other benefit payments in fiscal 2022. The following postretirement other than pension benefit payments, which reflect expected future service as appropriate, are expected to be

paid:


	2022		2023		2024		2025		2026		2027 - 2030
Expected postretirement medical and other benefit payments	$	369	$	377	$	379	$	378	$	384	$	2,049