11. Defined Benefit Plans

The Company assumed sponsorship of two statutory pension plans in Switzerland as part of the Bluehill ID acquisition on January 4, 2010, and assumed sponsorship of another Swiss statutory pension plan as part of the polyright acquisition on July 18, 2011. These pension plans are maintained by private insurance companies, and in accordance with Swiss law, the plans function as defined contribution plans whereby employee and employer contributions are defined based upon a percentage of an individual’s salary, depending on the age of the employee, and using a minimum guaranteed interest rate, which is annually defined by the Swiss Federal Council and reviewed every two years. These plans are accounted for as defined benefit plans in accordance with ASC Topic 715, Compensation-Retirement Benefits (“ASC 715”).

The net periodic pension cost for the Company’s pension plans includes the following components for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012 (1)		2013			2012 (1)
Service cost	$	80		$	—	$	236		$	—
Interest cost		21			—		63			—
Expected return on plan assets		(15	)		—		(45	)		—
Amortization of prior service cost		6			—		17			—
Amortization of transition obligation		12			—		38			—
Net periodic pension cost	$	104		$	—	$	309		$	—

(1) As stated in Note 1 to the Consolidated Financial Statements in its 2012 Annual Report on Form 10-K, the Company began accounting for its pension plans as defined benefit plans in the fourth quarter of 2012 as a correction of an error. Prior to that date, no amounts were recognized in the first three quarters of 2012.