We maintain the United Therapeutics Corporation Supplemental Executive Retirement Plan (SERP) to provide retirement benefits to certain senior members of our management team.

Participants who retire at age 60 or older are eligible to receive either monthly payments or a lump sum payment based on an average of their total gross base salary over the last 36 months of active employment, subject to certain adjustments. Related benefit payments commence on the first day of the sixth month after retirement. Participants who elect to receive monthly payments will continue to receive payments through the remainder of their life. Alternatively, participants who elect to receive a lump sum distribution will receive a payment equal to the present value of the estimated monthly payments that would have been received upon retirement. As of December 31, 2019 and 2018, all SERP participants had elected to receive a lump sum distribution. Participants who terminate employment for any reason other than death, disability, or change in control prior to age 60 will not be entitled to receive any benefits under the SERP.

Because we do not fund the SERP, we recognize a liability equal to the projected benefit obligation as measured at the end of each fiscal year.

A reconciliation of the beginning and ending balances of the projected benefit obligation is presented below (in millions):

(1)	During the fourth quarter of 2018, a participant in the SERP departed before retirement age under the terms of the SERP. As a result, we recorded a $7.0 million reduction to the benefit obligation as of December 31, 2018.

(2)	This amount represents the benefit obligation due to participants who are eligible to retire and whose benefit payments could commence within one year of the respective balance sheet date.

The following weighted average assumptions were used to measure the SERP obligation:


	Year Ended December 31,
	2019		2018
Discount rate	2.63	%	3.92	%
Salary increases	4.00	%	4.00	%
Lump-sum distribution rate	3.00	%	4.50	%

12. Employee Benefit Plans (Continued)

The components of net periodic pension cost recognized on our consolidated statements of operations consisted of the following (in millions):


	Year Ended December 31,
	2019		2018		2017
Service cost	$	2.2	$	2.4	$	2.2
Interest cost		1.4		1.6		1.6
Amortization of prior service cost		1.5		1.5		1.5
Amortization of net actuarial gain		(2.2)		(0.2)		(0.6)
Settlement		(1.9)		—		—
Total	$	1.0	$	5.3	$	4.7

For the years ended December 31, 2019 and December 31, 2018, the service cost component is reported within Operating expenses and the other components are reported in other income (expense), net on our consolidated statements of operations. For the year ended December 31, 2017, all components of net periodic pension cost are reported within Operating expenses on our consolidated statements of operations. We did not reclassify amounts for the year ended December 31, 2017 to conform with current year presentation as these amounts were not material to our financial statements.

Amounts related to the SERP that have been recognized in other comprehensive (loss) income are as follows (in millions):


	Year Ended December 31,
	2019		2018		2017
Net actuarial (loss) gain	$	(12.9)	$	12.7	$	(3.2)
Prior service cost		1.5		1.5		1.5
Settlement		(1.9)		—		—
Total recognized in other comprehensive (loss) income		(13.3)		14.2		(1.7)
Tax benefit (expense)		1.0		(2.1)		0.6
Total, net of tax	$	(12.3)	$	12.1	$	(1.1)

The table below presents amounts related to the SERP included in accumulated other comprehensive loss that have not yet been recognized as a component of net periodic pension cost on our consolidated statements of operations (in millions):


	Year Ended December 31,
	2019		2018		2017
Net actuarial gain	$	(4.5)	$	(19.3)	$	(6.6)
Prior service cost		3.3		4.7		6.2
Total included in accumulated other comprehensive loss		(1.2)		(14.6)		(0.4)
Tax expense		1.2		2.3		0.2
Total, net of tax	$	—	$	(12.3)	$	(0.2)

12. Employee Benefit Plans (Continued)

We estimate $1.3 million of the prior service cost included in accumulated other comprehensive loss as of December 31, 2019 will be recognized as a component of net periodic pension cost on our consolidated statements of operations for the year ended December 31, 2020.

The accumulated benefit obligation, a measure that does not consider future increases in participants’ salaries, was $47.4 million and $39.8 million at December 31, 2019 and 2018, respectively.

Future estimated benefit payments, based on current assumptions, including election of lump-sum distributions and expected future service, are as follows (in millions):


Year Ended December 31,
2020	$	17.5
2021		—
2022		—
2023		6.2
2024		16.1
Thereafter		44.8
Total	$	84.6

Employee Retirement Plan

We maintain a Section 401(k) Salary Reduction Plan which is open to all eligible full-time employees. Under the 401(k) Plan, eligible employees can make pre-tax or after-tax contributions up to statutory limits. Currently, we make discretionary matching contributions to the 401(k) Plan equal to 40 percent of a participant’s elected salary deferral. Matching contributions vest immediately for participants who have been employed for three years; otherwise, matching contributions vest annually, in one-third increments over a three-year period until the three-year employment requirement has been met.