PENSION BENEFIT PLANS

401(k) Plan

The Company has a defined contribution program for certain employees that is qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. The Company matches 50% of the employee’s contribution up to 6% of the employee’s salary. NetScout contributions vest at a rate of 25% per year of service. NetScout made matching contributions of $7.8 million, $2.6 million and $2.5 million to the plan for the years ended March 31, 2016, 2015 and 2014, respectively.

Defined Benefit Pension Plan

Certain of the Company's non-U.S. employees participate in certain noncontributory defined benefit pension plans acquired in the Communications Business acquisition on July 14, 2015. None of the Company's employees in the U.S. participate in any noncontributory defined benefit pension plans. In general, these plans are funded based on considerations relating to legal requirements, underlying asset returns, the plan’s funded status, the anticipated deductibility of the contribution, local practices, market conditions, interest rates and other factors.

The components of the change in benefit obligation of the pension plan is as follows (in thousands):



	March 31,
	2016
Benefit obligation, beginning of year	$	—
Service cost	279
Interest cost	391
Benefits paid and other	(175		)
Acquisitions	29,033
Actuarial gain	(847		)
Foreign exchange rate impact	507
Benefit obligation, at end of year	$	29,188

The reconciliation of the beginning and ending balances of the fair value of the assets of the pension plan is as follows (in thousands):



	March 31,
	2016
Fair value of plan assets, at beginning of year	$	—
Employer direct benefit payments	175
Benefits paid and other	(175		)
Fair value of plan assets, at end of year	$	—

The following sets forth the components of the Company's net periodic pension cost of the noncontributory defined benefit pension plans for the fiscal year ended March 31, 2016 (in thousands):



	March 31,
	2016
Service cost	$	279
Interest cost	391
Net periodic pension cost	$	670

There was no net periodic pension cost for fiscal years prior to fiscal year 2016 as the pension plan was acquired as a result of the Transaction during the fiscal year ended March 31, 2016.

Weighted average assumptions used to determine net periodic pension cost at date of measurement:



	March 31,
	2016
Discount rate	2.30	%
Rate of compensation increase	2.25	%

As of March 31, 2016, unrecognized actuarial gains of $847 thousand ($632 thousand, net of tax) which have not yet been recognized in net periodic pension cost are included in accumulated other comprehensive income (loss). The unrecognized actuarial gains are calculated as the difference between the actuarially determined projected benefit obligation and the value of the plan assets less accrued pension costs at March 31, 2016. None of this amount is expected to be recognized in net periodic pension costs during the fiscal year ending March 31, 2017. No plan assets are expected to be returned to the Company during the fiscal year ending March 31, 2017.

Expected Contributions

During the fiscal year ended March 31, 2016, the Company contributed $175 thousand to its defined benefit pension plan. The following sets forth benefit payments, which reflect expected future service, as appropriate, expected to be paid by the plan in the periods indicated (in thousands):



2017	$	275
2018	$	319
2019	$	369
2020	$	422
2021	$	480
2022 - 2026	$	3,334