Pier 1 2016 Annual Report Download - page 54

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$7,691,000 and used $7,676,000 to fund retirement benefits and taxes for the Company’s former chief financial officer, who
retired during fiscal 2015 and received payment during fiscal 2016. During fiscal 2015, there were no cash contributions made to
the trust and no restricted investments were sold to fund retirement benefits. Any future contributions will be made at the
discretion of the Company’s Board. Funds from the trust will be used to fund or partially fund benefit payments. The Company
expects to pay $127,000 during fiscal 2017, $127,000 during fiscal 2018, $28,460,000 during fiscal 2019, $172,000 during
fiscal 2020, $246,000 during fiscal 2021 and $1,214,000 during fiscal years 2022 through 2026 under the plans.
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 February 27, 2016 and February 28, 2015 (in thousands):
2016 2015
Change in projected benefit obligation:
Projected benefit obligation, beginning of year $ 25,404 $ 27,481
Service cost 1,468 1,402
Interest cost 634 823
Actuarial loss 812 2,772
Benefits paid (including settlements) (127) (7,707)
Curtailment — 633
Projected benefit obligation, end of year $ 28,191 $ 25,404
Reconciliation of funded status:
Projected benefit obligation $ 28,191 $ 25,404
Plan assets ——
Funded status $(28,191) $(25,404)
Accumulated benefit obligation $(28,191) $(25,404)
Amounts recognized in the balance sheets:
Current liability $ (127) $ (127)
Noncurrent liability (28,064) (25,277)
Accumulated other comprehensive loss, pre-tax 3,719 4,361
Net amount recognized $(24,472) $(21,043)
Cumulative other comprehensive loss, net of taxes of $2,871 and $3,121 in fiscal
2016 and 2015, respectively $ 850 $ 1,240
Weighted average assumptions used to determine:
Benefit obligation, end of year:
Discount rate 2.75% 2.50%
Lump-sum conversion discount rate 3.50% 4.00%
Rate of compensation increase (1) 3.00% 3.00%
Net periodic benefit cost for years ended:
Discount rate 2.50% 3.00%
Lump-sum conversion discount rate 4.00% 5.00%
Rate of compensation increase 0.00% 0.00%
(1) The rate of compensation increase shown above assumes an increase of 0% for fiscal year 2017 and 3% for fiscal years thereafter, except for the Company’s CEO. The CEO’s rate of
compensation is governed by his employment agreement.
The Company’s former chief financial officer retired on February 10, 2015. As of his retirement date, he had earned under one of
the plans an early retirement benefit payment of $7,573,981, which was not included in the projected benefit obligation at fiscal
2015 year end. The benefit payment was paid during fiscal 2016 and was included in other accrued liabilities at fiscal 2015 year
end.
48 PIER 1 IMPORTS, INC. 2016 Form 10-K