Pier 1 2014 Annual Report Download - page 49

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Measurement of obligations for the Plans is calculated as of each fiscal year end. The following provides a reconciliation of benefit
obligations and funded status of the Plans as of March 1, 2014 and March 2, 2013 (in thousands):
2014 2013
Change in projected benefit obligation:
Projected benefit obligation, beginning of year $ 25,573 $ 23,519
Service cost 1,456 1,353
Interest cost 765 740
Actuarial (gain) loss (188) 854
Benefits paid (including settlements) (125) (893)
Projected benefit obligation, end of year $ 27,481 $ 25,573
Reconciliation of funded status:
Projected benefit obligation $ 27,481 $ 25,573
Plan assets ——
Funded status $(27,481) $(25,573)
Accumulated benefit obligation $(27,481) $(25,573)
Amounts recognized in the balance sheets:
Current liability $ (127) $ (129)
Noncurrent liability (27,354) (25,444)
Accumulated other comprehensive loss, pre-tax 4,724 6,714
Net amount recognized $(22,757) $(18,859)
Cumulative other comprehensive loss, net of taxes of $3,261 and $4,033 in fiscal
2014 and 2013, respectively $ 1,463 $ 2,681
Weighted average assumptions used to determine:
Benefit obligation, end of year:
Discount rate 3.00% 3.00%
Lump-sum conversion discount rate 5.00% 5.00%
Rate of compensation increase (1) 0.00% 3.00%
Net periodic benefit cost for years ended:
Discount rate 3.00% 3.25%
Lump-sum conversion discount rate 5.00% 5.00%
Rate of compensation increase 3.00% 0.00%
(1) The rate of compensation increase shown above assumes an increase of 0% for fiscal year 2015 and 3.0% for fiscal years thereafter for all participants except for the Company’s CEO. The
CEO’s rate of compensation is set forth in his employment agreement.
Net periodic benefit cost included the following actuarially determined components during fiscal 2014, 2013, and 2012 as
shown in the table below (in thousands). The amortization of amounts related to unrecognized prior service costs and net
actuarial loss were reclassified out of other comprehensive income as a component of net periodic benefit cost.
2014 2013 2012
Service cost $1,456 $1,353 $1,118
Interest cost 765 740 779
Amortization of unrecognized prior service cost 410 410 410
Amortization of net actuarial loss 1,392 1,408 452
Settlement — (488) —
Net periodic benefit cost $4,023 $3,423 $2,759
As of March 1, 2014 and March 2, 2013, cumulative other comprehensive loss included amounts that had not been recognized
as components of net periodic benefit cost related to prior service cost of $736,000 and $1,146,000, and net actuarial loss of
$3,988,000 and $5,568,000, respectively. During fiscal 2014, 2013 and 2012, $188,000, ($854,000) and ($3,363,000),
PIER 1 IMPORTS, INC. 2014 Form 10-K 45