EMPLOYEE BENEFIT PLANS

12 Months Ended

Mar. 26, 2022

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

NOTE 5 – EMPLOYEE BENEFIT PLANS

Defined Contribution Plan. All of Transcat’s U.S. based employees are eligible to participate in a defined contribution plan, the Long-Term Savings and Deferred Profit Sharing Plan (the “Plan”), provided they meet certain qualifications. In fiscal year 2022, the Company matched 50% of the first 6% of pay that eligible employees contribute to the Plan. In response to the COVID-19 pandemic, the Company suspended the employer match to the Plan for the first six months of fiscal year 2021. In the second six months of fiscal year 2021, the Company matched 50% of the first 6% of pay that eligible employees contribute to the Plan.

In the long-term savings portion of the Plan (the “401K Plan”), plan participants are entitled to a distribution of their vested account balance upon termination of employment or retirement. Plan participants are fully vested in their contributions while Company contributions are fully vested after three years of service. The Company’s matching contributions to the 401K Plan were approximately $1.1 million and $0.4 million in fiscal years 2022 and 2021, respectively.

In the deferred profit sharing portion of the Plan, Company contributions are made at the discretion of the Company’s Board of Directors. The Company made no profit sharing contributions in fiscal years 2022 and 2021.

Employee Stock Purchase Plan. The Company has an Employee Stock Purchase Plan (the “ESPP”) that allows for eligible employees as defined in the ESPP to purchase common shares of the Company through payroll deductions at a price that is 85% of the closing market price on the second last business day of each calendar month (the “Investment Date”).  650,000 shares can be purchased under the ESPP. The difference between the closing market price on the Investment Date and the price paid by employees is recorded as a general and administrative expense in the accompanying Consolidated Statements of Income. The expense related to the ESPP was less than $0.1 million in each of fiscal years 2022 and 2021.

Non-Qualified Deferred Compensation Plan. The Company has available a non-qualified deferred compensation plan (the “NQDC Plan”) for directors and officers. Participants are fully vested in their contributions. At its discretion, the Company may elect to match employee contributions, subject to legal limitations in conjunction with the 401K Plan, which fully vest after three years of service. During fiscal years 2022 and 2021, the Company did not match any employee contributions. Participant accounts are adjusted to reflect performance, whether positive or negative, of selected investment options chosen by each participant during the deferral period. In the event of bankruptcy, the assets of the NQDC Plan are available to satisfy the claims of the Company’s general creditors. The liability for compensation deferred under the NQDC Plan was $0.2 million as of March 26, 2022 and $0.4 million as of March 27, 2021, and is included as a component of other liabilities (non-current) on the Consolidated Balance Sheets.

Post-retirement Health Care Plans. The Company has a defined benefit post-retirement health care plan which provides long-term care insurance benefits, medical and dental insurance benefits and medical premium reimbursement benefits to eligible retired corporate officers and their eligible spouses (the “Officer Plan”).

The change in the post-retirement benefit obligation is as follows (amounts in thousands):

	FY 2022			FY 2021
Post-retirement benefit obligation, at beginning of fiscal year	$	1,831		$	1,509
Service cost		96			84
Interest cost		52			48
Benefits paid		(125	)		(95	)
Actuarial (gain) loss		(528	)		285
Post-retirement benefit obligation, at end of fiscal year		1,326			1,831
Fair value of plan assets, at end of fiscal year		-			-
Funded status, at end of fiscal year	$	(1,326	)	$	(1,831	)
Accumulated post-retirement benefit obligation, at end of fiscal year	$	1,326		$	1,831

The accumulated post-retirement benefit obligation is included as a component of other liabilities (non-current) in the Consolidated Balance Sheets. The components of net periodic post-retirement benefit cost and other amounts recognized in other comprehensive income are as follows (amounts in thousands):

	FY 2022			FY 2021
Net periodic post-retirement benefit cost:
Service cost	$	96		$	84
Interest cost		52			48
Amortization of prior service cost		1			1
		149			133
Benefit obligations recognized in other comprehensive income:
Amortization of prior service cost		(1	)		(1	)
Net actuarial (loss) gain		(583	)		233
		(584	)		232
Total recognized in net periodic benefit cost and other comprehensive income	$	(435	)	$	365
Amount recognized in accumulated other comprehensive income, at end of fiscal year:
Unrecognized prior service cost	$	156		$	739

The prior service cost is amortized over the average remaining life expectancy of active participants in the Officer Plan. The estimated prior service cost that will be amortized from accumulated other comprehensive income into net periodic post-retirement benefit cost during fiscal year 2023 is less than $0.1 million.

The post-retirement benefit obligation was computed by an independent third-party actuary. Assumptions used to determine the post-retirement benefit obligation and the net periodic postretirement benefit cost were as follows:

	March 26, 2022			March 27, 2021
Weighted average discount rate		3.6	%		3.0	%
Medical care cost trend rate:
Trend rate assumed for next year		7.0	%		7.0	%
Ultimate trend rate		3.8	%		3.8	%
Year that rate reaches ultimate trend rate		2075			2075
Dental care cost trend rate:
Trend rate assumed for next year and remaining at that level thereafter		3.0	%		3.0	%

Benefit payments are funded by the Company as needed. Payments toward the cost of a retiree’s medical and dental coverage are initially determined as a percentage of a base coverage plan in the year of retirement and are limited to increase at a rate of no more than 50% of the annual increase in medical and dental costs, as defined in the plan document. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows (amounts in thousands):

Fiscal Year	Amount
2023	$	135
2024		113
2025		118
2026		84
2027		91
Thereafter	$	785

Increasing the assumed health care cost trend rate by one percentage point would increase the accumulated post-retirement benefit obligation and the annual net periodic post-retirement benefit cost by $0.1 million. A one percentage point decrease in the healthcare cost trend would decrease the accumulated post-retirement benefit obligation and the annual net periodic post-retirement benefit cost by $0.1 million.