Annual report pursuant to Section 13 and 15(d)

Employee Benefits Plans

v3.19.3
Employee Benefits Plans
 12 Months Ended
Sep. 30, 2019
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefits Plans

Management Security Plan

The management security plan (“MSP”) is a nonqualified, noncontributory defined supplemental deferred retirement benefit plan for a select group of management personnel. The MSP provides a fixed supplemental retirement benefit for 180 months. The MSP was frozen as of September 30, 2017. As a result, no new participants are being added to the MSP and no further benefits are accumulating. The MSP benefit expense and the projected management security plan benefit obligation are determined using assumptions as of the end of the year. The weighted-average discount rate used to compute the obligation was 4.08% and 4.08% in fiscal years 2019 and 2018, respectively.

Actuarial gains or losses are recognized when incurred; therefore, the end of year benefit obligation is the same as the accrued benefit costs recognized in the Consolidated Balance Sheets.

The amount of MSP benefit expense charged to costs and expenses was as follows:
(in thousands)
Fiscal Year Ended September 30,
 
2019
 
2018
 
2017
Service cost
$
—

 
$
—

 
$
200

Interest cost
171

 
293

 
140

MSP termination adjustments
985

 
—

 
—

Recognized actuarial gain (loss) adjustment
13

 
16

 
(78
)
Total
$
1,169

 
$
309

 
$
262



The following provides a roll-forward of the MSP benefit obligation:
(in thousands)
September 30,
 
2019
 
2018
Change in projected benefit obligation:
 

 
 

Benefit obligation at beginning of year
$
4,397

 
$
4,438

Interest cost
171

 
293

Benefits paid
(340
)
 
(350
)
MSP termination adjustments
985

 
—

Recognized actuarial gain adjustment
13

 
16

Benefit obligation at end of year
$
5,226

 
$
4,397

 
 
 
 
Funded status at end of year
$
(5,226
)
 
$
(4,397
)


Effective September 30, 2018, the Company terminated the MSP. Under the MSP termination, payout for benefits covered under the applicable Internal Revenue Code regulations cannot commence until at least twelve months following plan termination decision, but must be fully paid out within twenty-four (24) months following plan termination. The Company has determined to pay out a lump sum under the Equivalent Annuity approach, whereby the payout under this approach would mitigate participants tax burden. In essence, the Company would be covering the amount needed to purchase an annuity providing the same after-tax benefit as if the plan was not terminated. As a result, the Company recorded an additional liability of approximately $720,000.
The Company has established a “Rabbi Trust” to provide for the funding of accrued benefits under the MSP. According to the terms of the Rabbi Trust, funding is voluntary until a change of control of the Company as defined in the Management Security Plan Trust Agreement occurs. Upon a change of control, funding is triggered. As of September 30, 2019, the Rabbi Trust had no assets, and no change of control had occurred.

Profit Sharing and 401(k) Plans

The Company maintains a 401(k) employee savings plan for eligible employees, which provides up to a 4% matching contribution payable on employee payroll deferrals. The Company’s matching funds vest to the employee immediately, pursuant to a safe harbor election effective in October 2012. The Company’s contribution to the plan was approximately $380,000, $342,000 and $445,000 for the fiscal years ended September 30, 2019, 2018 and 2017, respectively.

The Profit Sharing Plan (“Plan”) is fully funded by contributions from the Company. Contributions to the Plan are discretionary and determined annually by the Company’s Board of Directors. Contributions to employee accounts are based on the participant’s compensation. The Company’s paid contribution to the Profit Sharing Plan was $0, $0 and $378,000 for the fiscal years ended September 30, 2019, 2018 and 2017, respectively.