Pier 1 2009 Annual Report Download - page 71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 7—EMPLOYEE BENEFIT PLANS
The Company offers a qualified, defined contribution employee retirement plan to all its full- and
part-time personnel who are at least 18 years old and have been employed for a minimum of six
months. During fiscal 2009, 2008 and 2007, employees contributing 1% to 5% of their compensation
received a matching Company contribution of up to 3%. Company contributions to the plan were
$2,082,000, $2,305,000 and $2,645,000 in fiscal 2009, 2008 and 2007, respectively.
In addition, the Company offers non-qualified deferred compensation plans for the purpose of
providing deferred compensation for certain employees whose benefits under the qualified plan may be
limited under Section 401(k) of the Internal Revenue Code. The Company’s expense for these
non-qualified plans was $690,000, $831,000 and $1,628,000 for fiscal 2009, 2008 and 2007, respectively.
The Company has trusts established for the purpose of setting aside funds to be used to settle certain
obligations of these non-qualified deferred compensation plans and contributed $2,020,000 and used
$3,258,000 to satisfy a portion of retirement obligations during fiscal 2009. As of February 28, 2009 and
March 1, 2008, the trusts’ assets consisted of interest bearing investments of $247,000 and $1,460,000
and life insurance policies with cash surrender values of $5,409,000 and $7,187,000 and death benefits
of $13,486,000 and $17,100,000, respectively. The trust assets are restricted and may only be used to
satisfy obligations to plan participants. The Company owns and is the beneficiary of a number of
insurance policies on the lives of current and former key executives that are unrestricted as to use. At
the discretion of the Board of Directors such policies could be contributed to these trusts or to the
trusts established for the purpose of setting aside funds to be used to satisfy obligations arising from
supplemental retirement plans described below. The cash surrender value of these unrestricted policies
was $16,038,000 at February 28, 2009, and the death benefit was $24,920,000. These cash surrender
values are carried in the Company’s consolidated financial statements in other noncurrent assets.
The Company maintains supplemental retirement plans (the ‘‘Plans’’) for certain of its executive
officers. The Plans provide that upon death, disability, reaching retirement age and certain termination
events, a participant will receive benefits based on highest compensation, years of service and years of
plan participation. The Company recorded expenses related to the Plans of $3,210,000, $3,511,000 and
$15,112,000 in fiscal 2009, 2008 and 2007, respectively.
The Plans are not funded and thus have no plan assets. However, a trust has been established for
the purpose of setting aside funds to be used to settle the defined benefit plan obligations upon
retirement or death of certain participants. The trust assets are consolidated in the Company’s financial
statements and consist of interest bearing investments in the amounts of $17,000 and $16,000 included
in other noncurrent assets at February 28, 2009 and March 1, 2008, respectively. These investments are
restricted and may only be used to satisfy retirement obligations to certain participants. The Company
has accounted for these restricted investments as available-for-sale securities. Cash contributions of $0
and $23,000 were made to the trust in fiscal 2009 and 2008, respectively. Any future contributions will
be made at the discretion of the Board of Directors. Restricted investments from the trust were sold to
fund retirement benefits of $0 and $6,986,000 in fiscal 2009 and 2008, respectively. Funds from the trust
will be used to fund or partially fund benefit payments through fiscal year 2019 that are expected to
total approximately $21,118,000. Of this amount, the Company expects to pay $1,784,000 during fiscal
2010, $118,000 during fiscal 2011, $118,000 during fiscal 2012, $118,000 during fiscal 2013, $1,792,000
during fiscal 2014 and $17,188,000 during fiscal years 2015 through 2019.
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