Defined Benefit Plans

9 Months Ended

Oct. 31, 2020

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 $68.1 million and $67.7 million as of October 31, 2020 and February 1, 2020, 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 $(0.3) million and $1.7 million in other income (expense) during the three and nine months ended October 31, 2020, respectively, and unrealized gains of $2.0 million and $5.0 million in other income during the three and nine months ended November 2, 2019, respectively. The projected benefit obligation was $51.6 million and $51.9 million as of October 31, 2020 and February 1, 2020, 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 $1.3 million were made during the three and nine months ended October 31, 2020, respectively. SERP benefit payments of $0.4 million and $1.3 million were made during the three and nine months ended November 2, 2019, 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 October 31, 2020 and February 1, 2020, the foreign pension plans had a total projected benefit obligation of $36.4 million and $34.8 million, respectively, and plan assets held in independent investment fiduciaries of $29.9 million and $28.9 million, respectively. The net liability of $6.5 million and $5.9 million

was included in other long-term liabilities in the Company’s condensed consolidated balance sheets as of October 31, 2020 and February 1, 2020, respectively.

The components of net periodic defined benefit pension cost for the three and nine months ended October 31, 2020 and November 2, 2019 related to the Company’s defined benefit plans are as follows (in thousands):


	Three Months Ended Oct 31, 2020
	SERP		Foreign Pension Plans		Total
Service cost	$	—	$	809	$	809
Interest cost	319		8		327
Expected return on plan assets	—		(48)		(48)
Net amortization of unrecognized prior service credit	—		(17)		(17)
Net amortization of actuarial losses	10		91		101
Net periodic defined benefit pension cost	$	329	$	843	$	1,172


	Nine Months Ended Oct 31, 2020
	SERP		Foreign Pension Plans		Total
Service cost	$	—	$	2,339	$	2,339
Interest cost	958		23		981
Expected return on plan assets	—		(138)		(138)
Net amortization of unrecognized prior service credit	—		(49)		(49)
Net amortization of actuarial losses	30		264		294
Net periodic defined benefit pension cost	$	988	$	2,439	$	3,427


	Three Months Ended Nov 2, 2019
	SERP		Foreign Pension Plans		Total
Service cost	$	—	$	809	$	809
Interest cost	481		68		549
Expected return on plan assets	—		(78)		(78)
Net amortization of unrecognized prior service credit	—		(10)		(10)
Net amortization of actuarial losses	15		97		112
Net periodic defined benefit pension cost	$	496	$	886	$	1,382


	Nine Months Ended Nov 2, 2019
	SERP		Foreign Pension Plans		Total
Service cost	$	—	$	2,424	$	2,424
Interest cost	1,443		203		1,646
Expected return on plan assets	—		(233)		(233)
Net amortization of unrecognized prior service credit	—		(29)		(29)
Net amortization of actuarial losses	46		288		334
Net periodic defined benefit pension cost	$	1,489	$	2,653	$	4,142