In Germany, the Company traditionally had an unfunded defined benefit pension plan whose benefits are based primarily on years of service and wage and salary group. As of January 1, 2001, the Company replaced its unfunded defined benefit pension plan with a new defined contribution plan. All new hires after that date only receive defined contributions to a pension plan based on a percentage of the employee's eligible compensation. However, due to grandfathering provisions for certain existing employees hired before that date, the Company continues to be obligated to provide pension benefits which are at a minimum equal to benefits that would have been available under the terms of the traditional defined benefit plans (Grandfathered Benefit). The Grandfathered Benefit and contributions to the Company's pension plan made for those employees after January 1, 2001 are included in the disclosures for defined benefit plans. The Company accounts for the Grandfathered Benefit by recognizing the higher of the defined contribution obligation or the defined benefit obligation for the minimum benefit. As of September 30, 2013 and 2012, contributions made through the defined contribution plan for those employees are adequate to cover the Grandfathered Benefit obligation. Therefore, the Company accounts for that portion of its pension obligation as a fully funded plan with a funded status of zero.

In addition, the Company offers defined contribution benefits under the terms of a Section 401(k) plan to employees in the U.S.

Change in the projected benefit obligation and plan assets for all of the Company's defined benefit plans is as follows:

		Year ended		Year ended
		September 30,		September 30,
		2013		2012
		$'000s
Projected benefit obligation at beginning
of period	$	74,712	$	62,255
Service cost		1,426		1,069
Interest cost		2,127		2,483
Actuarial (gain)/loss		1,149		13,535
Investment earnings		222		409
Benefits paid		(2,568)		(2,303)
Currency translation		3,404		(2,736)
Projected benefit obligation at end of period		80,472		74,712
Fair value of plan assets at beginning of
period		13,083		12,578
Actual return on plan assets		222		409
Employer's contribution		1,223		857
Benefits paid		(648)		(218)
Currency Translation		607		(543)
Fair value of plan assets at end of period		14,487		13,083
Funded status	$	(65,985)	$	(61,629)

		Year ended		Year ended		Year ended
		September 30,		September 30,		September 30,
		2013		2012		2011
		$'000s
Service cost, net	$	203	$	212	$	578
Interest cost		2,127		2,483		2,510
Amortization of actuarial gains		128		(310)		(164)
Net periodic benefit cost	$	2,458	$	2,385	$	2,924

The accumulated benefit obligation as of September 30, 2013 and 2012 was $64,978 and $60,614, respectively.

To the extent the defined benefit obligation is recognized for the Grandfathered Benefit, the long-term estimated rate of return on plan assets is 3.56% (2012: 4.16%) per annum. This rate was based on an appropriate long-term rate for the plan assets held.

The benefits expected to be paid in cash of the following five years, and in aggregate for the fiscal years thereafter, are as follows:

The contributions expected to be made in each of the following five years and in aggregate thereafter are as follows:

Weighted-average assumptions used to determine benefit obligations (current-year rate) and net periodic benefit costs (prior-year rate) are as follows:

Plan assets consist of insurance policies with a guaranteed minimum return by the insurance company and an excess profit participation feature for a portion of the benefits. Sirona pays the premiums on the insurance policies but does not manage the investment of the funds; the insurance company makes all decisions on investment of funds, including the allocation to asset groups. The fair value of the plan assets such as equity securities, fixed-income investments, and others is based on the cash surrender values reported by the insurance company.

The Company made contributions to the U.S. plans of $801 and $688 for the fiscal years ended September 30, 2013 and 2012, respectively. The Company is obligated to match employee contributions as defined in the plans.

Contributions were also made to foreign plans of $931 and $747 for the fiscal years ended September 30, 2013 and 2012, respectively.