Pier 1 2013 Annual Report Download - page 51

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
$1,051,000, $744,000 and $576,000 for fiscal 2013, 2012 and 2011, 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 $2,773,000 and used $497,000 to satisfy a portion of retirement
obligations during fiscal 2013. The Company also contributed $1,526,000 and used $423,000 to satisfy a portion
of retirement obligations during fiscal 2012. As of March 2, 2013 and February 25, 2012, the trusts’ assets
included investments with an aggregate value of $3,732,000 and $1,215,000, respectively. The investments were
held in money market funds and mutual funds. All investments held in the trusts are valued at fair value using
Level 1 Inputs, which are unadjusted quoted prices in active markets for identical assets or liabilities. The
Company has accounted for these restricted investments as trading securities. The trust assets also consisted of
life insurance policies, which were classified as non-current assets, with cash surrender values of $6,556,000 as
of March 2, 2013 and $6,333,000 as of February 25, 2012, and death benefits of $13,090,000 for both periods.
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 $17,634,000 at March 2, 2013, and the death benefit was $25,980,000. These cash surrender values
are carried in the Company’s consolidated financial statements in other non-current 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 or 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 $3,423,000, $2,759,000 and $2,458,000 in fiscal 2013, 2012
and 2011, 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 amount of $17,000 that are included in other noncurrent assets at both
March 2, 2013 and February 25, 2012. 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 $794,000 and $0 were made to the trust in fiscal 2013 and
2012, 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 $794,000 and $0 in fiscal 2013 and 2012,
respectively. Funds from the trust will be used to fund or partially fund benefit payments. The Company expects
to pay $129,000 during fiscal 2014, $129,000 during fiscal 2015, $17,719,000 during fiscal 2016, $3,475,000
during fiscal 2017, $128,000 during fiscal 2018 and $7,332,000 during fiscal years 2019 through 2023.
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