Note 10 – Employee Benefit Plans

U.S. Plan

We maintain a defined contribution pension plan for U.S. employees established pursuant to Section 401(k) of the Internal Revenue Code. The plan allows voluntary employee contributions and discretionary employer contributions. For the years ended December 31, 2017, 2016, and 2015, we expensed contributions of $191, $167, and $110, respectively.

Non-U.S. Plan

We are subject to national mandatory pension systems and other compulsory plans, or make contributions to social pension funds based on local regulations. When our obligation is limited to the payment of the contribution into these plans or funds, the recognition of such liabilities is not required.

In addition, we have, in some countries, defined benefit plans consisting of final retirement salary and committed pension payments.

In Switzerland, the pension plan is a cash balance plan where contributions are expressed as a percentage of the pensionable salary. Contributions to Swiss plans are paid by the employees and the employer. The pension plan guarantees the amount accrued on the members’ savings accounts, as well as a minimum interest on those savings accounts. The plan assets are held in guaranteed investment contracts.

We also maintain a pension plan for our Belgian employees, in compliance with Belgian law. Contributions to Belgium plans are paid by the employees and the employer. Certain features of the plans require them to be categorized as defined benefit plans under ASC 715 due to Belgian social legislation, which prescribed a minimum annual return of 1.6% on employer contributions and 1.6% for employee contributions. The plan assets are held in guaranteed investment contracts.

Components of net periodic pension cost:


	Year ended December 31,
	2017		2016		2015

Service cost (gross)	$	1,397	$	783	$	601
Interest cost		188		243		261
Expected return on plan assets		(199)		(157)		(162)
Amortization of unrecognized actuarial gain		45		—		—
Net periodic pension cost	$	1,431	$	869	$	700

The net unfunded status of the Non-U.S. pension plans is as follows:


	As of December 31,
	2017		2016
Fair value of plan assets	$	12,390	$	11,024
Projected benefit obligation		(18,308)		(16,690)
Net unfunded benefit obligation	$	(5,918)	$	(5,666)

Net unfunded benefit obligation is recorded as other long-term liabilities in our consolidated balance sheets.

The change in the fair value of plan assets is as follows:


	Year ended December 31,
	2017		2016

Fair value of plan assets at January 1	$	11,024	$	9,264
Employee contributions		530		458
Actual return on plan assets		91		63
Benefits (paid), net of transfers		(1,277)		752
Employer contributions		992		832
Foreign exchange adjustment		1,030		(345)
Fair value of plan assets at December 31	$	12,390	$	11,024

The change in benefit obligations is as follows:


	Year ended December 31,
	2017		2016

Benefit obligations at January 1	$	16,690	$	12,674
Gross service cost		1,397		783
Interest cost		188		243
Employee contributions		530		458
Actuarial losses		30		2,296
Plan amendment		(356)		—
Benefits (paid), net of transfers		(1,277)		752
Foreign exchange adjustment		1,106		(516)
Benefit obligations at December 31	$	18,308	$	16,690

Our investment policy meets our responsibility under local social legislation and aligns plan assets with liabilities, while minimizing risk. For the years ended December 31, 2017 and 2016, plan assets are invested in guaranteed investment contracts. Fair value of guaranteed investment contracts is surrender value. Fair value is determined using Level 3 inputs as defined by ASC 820, Fair Value Measurements.

The net periodic cost for 2018 will include the amortization of prior service cost and unrecognized actuarial gains, currently included in Accumulated other comprehensive loss, of $89.

The accumulated benefit obligation for the plans were $7,984 and $8,247 as of December 31, 2017 and 2016, respectively.

Actuarial Assumptions

Certain actuarial assumptions such as the discount rate and the long-term rate of return on plan assets have a significant effect on the amounts reported for net periodic cost and the benefit obligation. The assumed discount rates reflect the prevailing market rates of a universe of high-quality, non-callable, corporate bonds currently available that, if the obligation were settled at the measurement date, would provide the necessary future cash flows to pay the benefit obligation when due. In determining the long-term return on plan assets, the Company considers long-term rates of return of comparable low risk investments, such as Euro AA bonds.

The following weighted average assumptions were utilized in pension calculations:


	As of December 31, 2017
	2017			2016
	(%)
Discount rates	0.7	-	1.5	0.7	-	1.6
Inflation	1.0	-	1.8	1.0	-	1.8
Expected return on plan assets	1.3	-	2.0	1.3	-	2.0
Rate of salary increases	2.0	-	2.8	2.0	-	2.8

Project future pension benefits as of December 31, 2017:


2018	$	529
2019		460
2020		478
2021		742
2022		1,169
Beyond		4,044