Dillard's 2012 Annual Report Download - page 73

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Notes to Consolidated Financial Statements (Continued)
8. Benefit Plans (Continued)
at least 50 years of age) or 75% of eligible pay. Eligible employees with one year of service, who elect
to participate in the plan or are auto-enrolled, receive a Company matching contribution. Company
matching contributions are calculated on the eligible employee’s first 6% of elective deferrals with the
first 1% being matched 100% and the next 5% being matched 50%. The Company matching
contributions are used to purchase Class A Common Stock of the Company for the benefit of the
employee. The terms of the plan provide a two-year vesting schedule for the Company matching
contribution portion of the plan. The Company incurred benefit plan expense of approximately
$16 million, $16 million and $15 million for fiscal 2012, 2011 and 2010, respectively.
The Company has an unfunded, nonqualified defined benefit plan (‘‘Pension Plan’’) for its officers.
The Pension Plan is noncontributory and provides benefits based on years of service and compensation
during employment. Pension expense is determined using various actuarial cost methods to estimate the
total benefits ultimately payable to officers and allocates this cost to service periods. The actuarial
assumptions used to calculate pension costs are reviewed annually.
The accumulated benefit obligations, change in projected benefit obligation, change in Pension
Plan assets, funded status, and reconciliation to amounts recognized in the consolidated balance sheets
are as follows:
February 2, January 28,
(in thousands of dollars) 2013 2012
Change in benefit obligation:
Benefit obligation at beginning of year ............... $174,129 $ 132,293
Service cost ................................. 3,267 3,326
Interest cost ................................ 7,294 7,200
Actuarial (gain) loss ........................... (4,640) 35,700
Benefits paid ................................ (4,516) (4,390)
Benefit obligation at end of year ................... $175,534 $ 174,129
Change in Pension Plan assets:
Fair value of Pension Plan assets at beginning of year .... $ — $ —
Employer contribution ......................... 4,516 4,390
Benefits paid ................................ (4,516) (4,390)
Fair value of Pension Plan assets at end of year .......... $ — $ —
Funded status (benefit obligation less Pension Plan assets) . . $(175,534) $(174,129)
Unamortized prior service costs .................. — —
Unrecognized net actuarial loss .................. — —
Intangible asset .............................. — —
Unrecognized net loss ......................... — —
Accrued benefit cost .............................. $(175,534) $(174,129)
Benefit obligation in excess of Pension Plan assets ........ $(175,534) $(174,129)
Amounts recognized in the balance sheets:
Accrued benefit liability ........................ $(175,534) $(174,129)
Net amount recognized ............................ $(175,534) $(174,129)
Accumulated benefit obligation at end of year ........... $(170,562) $(167,148)
F-23