Supplemental Executive Retirement Plan

9 Months Ended

Oct. 29, 2011

Supplemental Executive Retirement Plan

Supplemental Executive Retirement Plan

(12)         Supplemental Executive Retirement Plan

The components of net periodic pension cost for the three and nine months ended October 29, 2011 and October 30, 2010 were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	Oct. 29, 2011		Oct. 30, 2010		Oct. 29, 2011		Oct. 30, 2010
Service cost	$	—	$	69	$	—	$	207
Interest cost	662		557		1,978		1,673
Net amortization of unrecognized prior service cost	155		186		785		808
Net amortization of actuarial losses	458		140		1,592		420
Curtailment expense	—		—		1,242		5,819
Net periodic defined benefit pension cost	$	1,275	$	952	$	5,597	$	8,927

As a non-qualified pension plan, no dedicated funding of the SERP is required; however, the Company has and expects to continue to make periodic payments into insurance policies held in a rabbi trust to fund the expected obligations arising under the non-qualified SERP. The amount of future payments may vary, depending on the future years of service, future annual compensation of the participants and investment performance of the trust. The cash surrender values of the insurance policies were $34.6 million and $32.9 million as of October 29, 2011 and January 29, 2011, 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 losses of $0.7 million and $0.3 million in other income and expense during the three and nine months ended October 29, 2011, respectively, and unrealized gains of $1.5 million and $2.2 million during the three and nine months ended October 30, 2010, respectively.

During the nine months ended October 29, 2011, the Company recorded a SERP curtailment expense of $1.2 million before taxes related to the accelerated amortization of prior service cost resulting from the announced retirement of Maurice Marciano as an employee and executive officer, effective upon the expiration of his current employment agreement on January 28, 2012.  Mr. Marciano will not receive or earn any additional SERP-related benefits in connection with his retirement.  During the nine months ended October 30, 2010, the Company recorded a SERP curtailment expense of $5.8 million before taxes related to the accelerated amortization of prior service cost resulting from the departure of Carlos Alberini, the Company’s former President and Chief Operating Officer. Mr. Alberini did not receive any termination payments in connection with his departure and, as of the date of his departure, he ceased vesting or accruing any additional benefits under the terms of the SERP. Mr. Marciano’s retirement and Mr. Alberini’s departure resulted in a significant reduction in the total expected remaining years of future service of all SERP participants combined, resulting in the pension curtailment during each of the separate periods.

A reconciliation of the changes in the projected benefit obligation for the fiscal year ended January 29, 2011 and nine months ended October 29, 2011 is as follows (in thousands):

	Projected Benefit Obligation
Balance at January 30, 2010	$	37,165
Service cost	69
Interest cost	2,177
Actuarial losses	8,361
Balance at January 29, 2011	$	47,772
Interest cost	1,978
Actuarial losses	1,609
Balance at October 29, 2011	$	51,359