Postretirement Health Care and Life Insurance Benefits
|12 Months Ended|
Jan. 30, 2021
|Pension And Other Postretirement Benefit Expense [Abstract]|
|Postretirement Health Care and Life Insurance Benefits||
In addition to pension and other supplemental benefits, certain retired employees currently are provided with specified health care and life insurance benefits. Eligibility requirements for such benefits vary by division and subsidiary, but generally state that benefits are available to eligible employees who were hired prior to a certain date and retire after a certain age with specified years of service. Certain employees are subject to having such benefits modified or terminated.
The following provides a reconciliation of benefit obligations, plan assets, and funded status of the postretirement obligations as of January 30, 2021 and February 1, 2020:
Net postretirement benefit costs and other amounts recognized in other comprehensive loss included the following actuarially determined components:
The following weighted average assumption was used to determine the accumulated postretirement benefit obligations at January 30, 2021 and February 1, 2020:
The following weighted average assumption was used to determine the net postretirement benefit costs for the postretirement obligations:
The accumulated postretirement benefit obligation assumptions are evaluated annually, and at interim re- measurements if required, and updated as necessary.
The discount rate used to determine the present value of the Company’s accumulated postretirement benefit obligations is based on a yield curve constructed from a portfolio of high quality corporate debt securities with various maturities. Each year’s expected future benefit payments are discounted to their present value at the appropriate yield curve rate, thereby generating the overall discount rate for the accumulated postretirement benefit obligations.
The Company estimates the interest cost component of net periodic benefit costs using a full yield curve approach in the estimation of these components of net periodic benefit costs. Under this approach, the Company applies discounting using individual spot rates from the yield curve composed of the rates of return from a portfolio of high quality corporate debt securities available at the measurement date. These spot rates align to each of the projected benefit obligation and service cost cash flows.
The future medical benefits provided by the Company for certain employees are based on a fixed amount per year of service, and the accumulated postretirement benefit obligation is not affected by increases in health care costs. However, the future medical benefits provided by the Company for certain other employees are affected by increases in health care costs.
The following provides the assumed health care cost trend rates related to the Company’s accumulated postretirement benefit obligations at January 30, 2021 and February 1, 2020:
The following table reflects the benefit payments estimated to be funded by the Company and paid from the accumulated postretirement benefit obligations and estimated federal subsidies expected to be received under the Medicare Prescription Drug Improvement and Modernization Act of 2003:
The federal subsidies expected to be received for each of the years presented above are estimated to be less than $1 million each year and are estimated to be a total of approximately $1 million for the entire time period presented.
The entire disclosure for postemployment benefits, which may include supplemental unemployment benefits, obligations recognized for all types of benefits provided to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. Disclosure may also include discussion that an obligation for postemployment benefits is not accrued in accordance with regulation only because the amount cannot be reasonably estimated.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef