Pep Boys 2014 Annual Report Download - page 66

THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended January 31, 2015, February 1, 2014 and February 2, 2013
NOTE 14—BENEFIT PLANS (Continued)
2014 and the Company’s contribution expense for the Account Plan was $0.8 million and $0.1 million
for fiscal 2013 and 2012, respectively.
The Company has a qualified 401(k) savings plan and a separate savings plan for employees
residing in Puerto Rico, which cover all full-time employees who are at least 18 years of age and have
completed the lesser of (1) six consecutive months of employment and have a minimum of 500 hours of
service and (2) 12 consecutive months and have a minimum of 1,000 hours of service. The Company
contributes the lesser of 50% of the first 6% of a participant’s pre-tax contributions or 3% of the
participant’s compensation under both savings plans. For fiscal 2012, the Company’s contributions were
conditional upon the achievement of certain pre-established financial performance goals which were not
met in fiscal 2012. The Company’s contributions for fiscal 2013 and fiscal 2014 were not conditional on
any financial performance goals. The Company’s savings plans’ contribution expense in fiscal 2014 and
2013 was $3.2 million and $3.5 million respectively. The Company had no contribution expense in fiscal
2012.
During the fourth quarter of fiscal 2012, the Company terminated its defined benefit pension plan
and contributed $14.1 million to fully fund the plan on a termination basis. Accordingly, the Company
has no further defined benefit pension expense. The participants’ benefits were converted into a lump
sum cash payment or an annuity contract placed with an insurance carrier. The Company used a fiscal
year end measurement date for determining the benefit obligation and the fair value of Plan assets.
The actuarial computations were made using the ‘‘projected unit credit method.’’ Variances between
actual experience and assumptions for costs and returns on assets were amortized over the remaining
service lives of employees under the Plan.
Pension expense is as follows:
Year ended
February 2,
(dollar amounts in thousands) 2013
Service cost ............................................. $ —
Interest cost ............................................. 2,170
Expected return on plan assets ............................... (2,658)
Amortization of prior service cost ............................. 13
Recognized actuarial loss ................................... 1,896
Net Period Pension Cost .................................... 1,421
Settlement Charge ........................................ 17,753
Net Period Pension Cost .................................... $19,174
DEFERRED COMPENSATION PLAN
The Company maintains a non-qualified deferred compensation plan that allows its officers and
certain other employees to defer up to 20% of their annual salary and 100% of their annual bonus.
Through fiscal 2013, the first 20% of an officer’s bonus deferred into the Company’s stock was matched
by the Company on a one-for-one basis with Company stock that vests and is expensed over three
years. The shares required to satisfy distributions of voluntary bonus deferrals and the accompanying
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