Pension Plan | (12) Pension Plan The Company and certain subsidiaries have a noncontributory defined benefit retirement plan (the “ Pension Plan ERISA The Company’s Pension Plan asset allocation, by asset category, is as follows for the fiscal years ended: 2019 2018 Equity securities 46 % 57 % Debt securities 48 % 42 % Cash and cash equivalents 6 % 1 % Total 100 % 100 % The current asset allocation is being managed to meet the Company’s stated objective of asset growth and capital preservation. The factor is based upon the combined judgments of the Company’s Administrative Committee and its investment advisors to meet the Company’s investment needs, objectives, and risk tolerance. The Company’s target asset allocation percentage, by asset class, for the year ended February 28, 2019 is as follows: Asset Class Target Allocation Percentage Cash 1 - 5% Fixed Income 35 - 55% Equity 45 - 60% The Company estimates the long-term rate of return on Pension Plan assets will be 7.5% based upon target asset allocation. Expected returns are developed based upon the information obtained from the Company’s investment advisors. The advisors provide ten-year historical and five-year expected returns on the fund in the target asset allocation. The return information is weighted based upon the asset allocation at the end of the fiscal year. The expected rate of return at the beginning of the fiscal year ended 2019 was 7.5%, the rate used in the calculation of the fiscal year 2018 pension expense. The following tables present the Pension Plan’s fair value hierarchy for those assets measured at fair value as of February 28, 2019 and February 28, 2018 (in thousands): Assets Measured at Fair Value Fair Value Measurements Description at 2/28/19 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 3,945 $ 3,945 $ — $ — Government bonds 16,128 — 16,128 — Corporate bonds 10,722 — 10,722 — Domestic equities 20,903 20,903 — — Foreign equities 6,023 6,023 — — $ 57,721 $ 30,871 $ 26,850 $ — Assets Measured at Fair Value Fair Value Measurements Description at 2/28/18 (Level 1) (Level 2) (Level 3) Cash and cash equivalents $ 893 $ 893 $ — $ — Government bonds 14,005 — 14,005 — Corporate bonds 9,609 — 9,609 — Domestic equities 25,558 25,558 — — Foreign equities 6,819 6,819 — — $ 56,884 $ 33,270 $ 23,614 $ — Fair value estimates are made at a specific point in time, based on available market information and judgments about the financial asset, including estimates of timing, amount of expected future cash flows, and the credit standing of the issuer. In some cases, the fair value estimates cannot be substantiated by comparison to independent markets. The disclosed fair value may not be realized in the immediate settlement of the financial asset. In addition, the disclosed fair values do not reflect any premium or discount that could result from offering for sale at one time an entire holding of a particular financial asset. Potential taxes and other expenses that would be incurred in an actual sale or settlement are not reflected in amounts disclosed. Pension expense is composed of the following components included in cost of goods sold and selling, general and administrative expenses in the Company’s consolidated statements of operations for fiscal years ended (in thousands): 2019 2018 2017 Components of net periodic benefit cost Service cost $ 1,106 $ 1,083 $ 1,166 Interest cost 2,274 2,270 2,372 Expected return on plan assets (4,109 ) (3,794 ) (3,665 ) Amortization of: Prior service cost — — — Unrecognized net loss 2,047 2,041 2,683 Net periodic benefit cost 1,318 1,600 2,556 Other changes in Plan Assets and Projected Benefit Obligation Recognized in Other comprehensive Income Net actuarial loss (gain) 2,414 (669 ) (723 ) Amortization of net actuarial loss (2,047 ) (2,041 ) (2,683 ) Amortization of prior service credit — — — 367 (2,710 ) (3,406 ) Total recognized in net periodic pension cost and other comprehensive income $ 1,685 $ (1,110 ) $ (850 ) The following table represents the assumptions used to determine benefit obligations and net periodic pension cost for fiscal years ended: 2019 2018 2017 Weighted average discount rate (net periodic pension cost) 4.05 % 4.10 % 4.30 % Earnings progression (net periodic pension cost) 3.00 % 3.00 % 3.00 % Expected long-term rate of return on plan assets (net periodic pension cost) 7.50 % 7.50 % 7.50 % Weighted average discount rate (benefit obligations) 4.10 % 4.05 % 4.10 % Earnings progression (benefit obligations) 3.00 % 3.00 % 3.00 % During the current fiscal year, the Company adopted the new MP-2017 improvement scale to determine their benefit obligations under the Pension Plan. The accumulated benefit obligation (“ ABO PBO 2019 2018 Change in benefit obligation Projected benefit obligation at beginning of year $ 57,619 $ 57,658 Service cost 1,106 1,083 Interest cost 2,274 2,270 Actuarial (gain) loss (367 ) 978 Other assumption change (120 ) (423 ) Benefits paid (3,371 ) (3,947 ) Projected benefit obligation at end of year $ 57,141 $ 57,619 Change in plan assets: Fair value of plan assets at beginning of year $ 56,884 $ 52,812 Company contributions 3,000 3,000 Gain on plan assets 1,208 5,019 Benefits paid (3,371 ) (3,947 ) Fair value of plan assets at end of year $ 57,721 $ 56,884 Funded (unfunded) status $ 580 $ (735 ) Accumulated benefit obligation at end of year $ 52,747 $ 53,244 The measurement dates used to determine pension and other postretirement benefits is the Company’s fiscal year end. The Company contributed $3.0 million to the Pension Plan during fiscal year 2019. Given current funding status, the Company expects to contribute between $1.0 and $1.5 million to the Pension Plan during fiscal year 2020. Estimated future benefit payments which reflect expected future service, as appropriate, are expected to be paid to the Pension Plan participants in the fiscal years ended (in thousands): Year Projected Payments 2020 $ 3,500 2021 4,200 2022 4,300 2023 3,000 2024 4,800 2025 - 2029 21,000 Effective February 1, 1994, the Company adopted a Defined Contribution 401(k) Plan (the “ 401(k) Plan In addition, the Northstar Computer Forms, Inc. 401(k) Profit Sharing Plan was merged into the 401(k) Plan on February 1, 2001. The Company declared profit sharing contributions on behalf of the former employees of Northstar Computer Forms, Inc. in accordance with its original plan in the amounts of $206,000, $203,000, and $228,000, in fiscal years ended 2019, 2018 and 2017, respectively. |