Defined Benefit Plans

6 Months Ended

Aug. 03, 2019

Supplemental Executive Retirement Plan

On August 23, 2005, the Board of Directors of the Company adopted a Supplemental Executive Retirement Plan (“SERP”) which became effective January 1, 2006. The SERP provides select employees who satisfy certain eligibility requirements with certain benefits upon retirement, termination of employment, death, disability or a change in control of the Company, in certain prescribed circumstances.

As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has made periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of any future payments into the insurance policies, if any, may vary depending on investment performance of the trust. The cash surrender values of the insurance policies were $63.9 million and $61.7 million as of August 3, 2019 and February 2, 2019, respectively, and were included in other assets in the Company’s condensed consolidated balance sheets. As a result of changes in the value of the insurance policy investments, the Company recorded unrealized gains (losses) of $(0.2) million and $3.0 million in other income (expense) during the three and six months ended August 3, 2019, respectively, and unrealized gains of $1.7 million and $0.7 million in other income (expense) during the three and six months ended August 4, 2018, respectively. The projected benefit obligation was $52.3 million and $52.2 million as of August 3, 2019 and February 2, 2019, respectively, and was included in accrued expenses and other long-term liabilities in the Company’s condensed consolidated balance sheets depending on the expected timing of payments. SERP benefit payments of $0.4 million and $0.8 million were made during the three and six months ended August 3, 2019, respectively. SERP benefit payments of $0.4 million and $0.8 million were made during the three and six months ended August 4, 2018, respectively.

Foreign Pension Plans

In certain foreign jurisdictions, primarily in Switzerland, the Company is required to guarantee the returns on Company-sponsored defined contribution plans in accordance with local regulations. These plans are typically

government-mandated defined contribution plans that provide employees with a minimum investment return, and as such, are treated under pension accounting in accordance with authoritative guidance. Under the Swiss plan, both the Company and certain of its employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. The Company’s contributions must be made in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary and gender.

As of August 3, 2019 and February 2, 2019, the foreign pension plans had a total projected benefit obligation of $33.6 million and $31.1 million, respectively, and plan assets held in independent investment fiduciaries of $27.4 million and $25.4 million, respectively. The net liability of $6.2 million and $5.7 million was included in other long-term liabilities in the Company’s condensed consolidated balance sheets as of August 3, 2019 and February 2, 2019, respectively.

The components of net periodic defined benefit pension cost for the three and six months ended August 3, 2019 and August 4, 2018 related to the Company’s defined benefit plans are as follows (in thousands):



	Three Months Ended Aug 3, 2019
	SERP		Foreign Pension Plans			Total
Service cost	$	—	$	808		$	808
Interest cost	481		67			548
Expected return on plan assets	—		(78		)	(78		)
Net amortization of unrecognized prior service credit	—		(9		)	(9		)
Net amortization of actuarial losses	15		96			111
Net periodic defined benefit pension cost	$	496	$	884		$	1,380



	Six Months Ended Aug 3, 2019
	SERP		Foreign Pension Plans			Total
Service cost	$	—	$	1,615		$	1,615
Interest cost	962		135			1,097
Expected return on plan assets	—		(155		)	(155		)
Net amortization of unrecognized prior service credit	—		(19		)	(19		)
Net amortization of actuarial losses	31		191			222
Net periodic defined benefit pension cost	$	993	$	1,767		$	2,760



	Three Months Ended Aug 4, 2018
	SERP		Foreign Pension Plans			Total
Service cost	$	—	$	754		$	754
Interest cost	472		55			527
Expected return on plan assets	—		(75		)	(75		)
Net amortization of unrecognized prior service credit	—		(7		)	(7		)
Net amortization of actuarial losses	46		105			151
Net periodic defined benefit pension cost	$	518	$	832		$	1,350



	Six Months Ended Aug 4, 2018
	SERP		Foreign Pension Plans			Total
Service cost	$	—	$	1,494		$	1,494
Interest cost	944		110			1,054
Expected return on plan assets	—		(149		)	(149		)
Net amortization of unrecognized prior service credit	—		(14		)	(14		)
Net amortization of actuarial losses	93		210			303
Net periodic defined benefit pension cost	$	1,037	$	1,651		$	2,688