Note 13 – 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, 2019, 2018, and 2017, we expensed contributions of $0.3 million, $0.3 million, and $0.2 million, respectively.

Non-U.S. Plans

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.

The Company also includes a liability related to obligations to provide retirement benefits to employees who retire from the Company’s French subsidiary, as required by law. Per French regulations, each employee is entitled to a lump sum payment upon retirement based on years of service and salary at retirement. Benefit rights vest upon the statutory retirement age of 62. The obligation recorded represents the present value of amounts the Company expects to pay.

Components of net periodic pension cost included in earnings:


	Year ended December 31,
	2019		2018		2017

Service cost (gross)	$	1,164	$	1,281	$	1,397
Interest cost		234		199		188
Expected return on plan assets		(242)		(327)		(199)
Amortization of unrecognized actuarial gain		(22)		18		45
Net periodic pension cost	$	1,134	$	1,171	$	1,431

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


	As of December 31,
	2019		2018
Fair value of plan assets	$	14,159	$	12,823
Projected benefit obligation		(21,759)		(18,173)
Net unfunded benefit obligation	$	(7,600)	$	(5,350)

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,
	2019		2018

Fair value of plan assets at January 1	$	12,823	$	12,390
Employee contributions		485		506
Actual return on plan assets		908		904
Benefits (paid), net of transfers		(977)		(1,601)
Employer contributions		977		971
Foreign exchange adjustment		(57)		(347)
Fair value of plan assets at December 31	$	14,159	$	12,823

The change in benefit obligations is as follows:


	Year ended December 31,
	2019		2018

Benefit obligations at January 1	$	18,173	$	18,308
Gross service cost		1,164		1,281
Interest cost		234		199
Employee contributions		485		506
Actuarial (gains)/losses		2,763		(672)
Plan amendment		—		560
Benefits (paid), net of transfers		(977)		(1,601)
Foreign exchange adjustment		(83)		(408)
Benefit obligations at December 31	$	21,759	$	18,173

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, 2019 and 2018, plan assets are invested in guaranteed investment contracts. Fair value of guaranteed investment contracts is surrender value. Fair value for the year ended December 31, 2019 was determined using Level 3 inputs as defined by ASC 820, Fair Value Measurements. Changes in our plan assets are attributable to benefit payments and contributions as we have not actively traded our assets during the years ended December 31, 2019 and December 31, 2018.

Other

The accumulated benefit obligation for the plans were $20.3 million and $16.5 million as of December 31, 2019 and 2018, respectively.

The Company expects to pay $1.0 million of contributions over the next twelve months.

The amounts reclassified out of other comprehensive income during the twelve months ended December 31, 2019, 2018, and 2017 were not material.

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 between all plans were utilized in the pension calculations:


	As of December 31,
	2019			2018
	(%)
Discount rates	0.15	-	0.70	0.90	-	1.80
Inflation	1.00	-	2.00	1.00	-	2.00
Expected return on plan assets	1.25	-	2.00	1.30	-	2.00
Rate of salary increases	2.00	-	2.80	2.00	-	2.80

Projected future pension benefits as of December 31, 2019:


2020	$	452
2021		549
2022		769
2023		667
2024		568
Beyond		4,460