Saks Fifth Avenue 2010 Annual Report Download - page 75

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
adequately accrued for its income tax exposures. As of January 29, 2011, certain state examinations were
ongoing. To the extent the Company were to prevail in matters for which accruals have been established or be
required to pay amounts in excess of reserves, the Company’s effective tax rate in a given financial statement
period may be materially impacted.
NOTE 8—EMPLOYEE BENEFIT PLANS
DEFERRED COMPENSATION PLAN
The Company sponsors a non-qualified deferred compensation plan wherein eligible employees can defer a
portion of their compensation or unvested restricted stock and allocate the deferrals to a choice of investment
options. The liability for compensation deferred under this plan was $13,169 and $12,266 as of January 29, 2011
and January 30, 2010, respectively. The Company manages the risk of changes in the fair value of the liability for
deferred compensation by electing to match its liability under the plan with investment vehicles that offset a
substantial portion of its exposure. The cash value of the investment vehicles was $12,568 and $11,962 as of
January 29, 2011 and January 30, 2010, respectively, and is included in Other Assets in the accompanying
consolidated balance sheets.
EMPLOYEE SAVINGS PLAN
The Company sponsors a qualified defined contribution savings plan (“Savings Plan”) that covers
substantially all full-time employees. Eligible employees may elect regular payroll deductions of up to 90% of
their eligible compensation, as defined in the plan document, on a pre-tax basis, subject to Internal Revenue
Service (“IRS”) limitations. The Company makes contributions matching a portion of the employees’
contribution on the first 5% of compensation that a participant elects to contribute. The employer matching
contribution rate for 2008 and 2009 was 50% and 0%, respectively. The employer matching contribution rate
increased from 0% to 10% in July 2010. Company contributions charged to expense under the Savings Plan for
2010, 2009, and 2008 were $297, $0, and $7,805, respectively. As of January 29, 2011 and January 30, 2010,
total assets invested by participants under the Savings Plan were $414,402 and $394,715, respectively. As of
January 29, 2011 approximately 2% of the plan assets were invested in the Company’s stock at the discretion of
the participating employees. In February 2011, the employer matching contribution rate was increased from 10%
to 35%.
DEFINED BENEFIT PLANS
The Company sponsors a funded defined-benefit cash balance pension plan (“Pension Plan”) and an
unfunded supplemental executive retirement plan (“SERP”) for certain employees of the Company. The
Company amended the Pension Plan during 2006, freezing benefit accruals for all participants except those who
have attained age 55 and completed 10 years of credited service as of January 1, 2007, who are considered to be
non-highly compensated employees. In January 2009, the Company amended the Pension Plan to suspend future
benefit accruals for all remaining participants effective March 13, 2009. This curtailment resulted in a gain of
approximately $616 for the year ended January 31, 2009.
The Company generally funds pension costs currently, subject to regulatory funding requirements. The
Company expects funding requirements of approximately $3,200 in 2011.
Effective January 31, 2009, in accordance with authoritative guidance, the Company changed its
measurement date from November 1 to the date of its fiscal year-end. The Company elected to adopt the change
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