Benefit Plans

12 Months Ended

Nov. 30, 2019

U.S. Pension Plan

We maintain a defined benefit pension plan, Jefferies Group LLC Employees’ Pension Plan (the “U.S. Pension Plan”), which is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended, and covers certain of our employees. Under the U.S. Pension Plan, benefits to participants are based on years of service and the employee’s career average pay. Effective December 31, 2005, benefits under the U.S. Pension Plan were frozen with no further benefit accruing to participants for future service after December 31, 2005.

Employer Contributions - Our funding policy is to contribute to the U.S. Pension Plan at least the minimum amount required for funding purposes under applicable employee benefit and tax laws. We contributed $2.0 million to the U.S. Pension Plan during the year ended November 30, 2019. We do not anticipate making a contribution to the plan for the year ending November 30, 2020.

The following tables summarize the changes in the projected benefit obligation, the fair value of the assets and the funded status of the plan (in thousands):



	Year Ended November 30,
	2019			2018
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	$	54,724		$	60,559
Service cost	500			400
Interest cost	2,303			2,129
Actuarial (gains)/losses	9,606			(3,777		)
Administrative expenses paid	(467		)	(502		)
Benefits paid	(3,444		)	(952		)
Settlements	—			(3,133		)
Projected benefit obligation, end of period	$	63,222		$	54,724
Change in plan assets:
Fair value of assets, beginning of period	$	48,176		$	52,949
Benefits paid	(3,444		)	(952		)
Administrative expenses paid	(467		)	(502		)
Actual return on plan assets	10,715			(1,186		)
Contributions	2,000			1,000
Settlements	—			(3,133		)
Fair value of assets, end of period	$	56,980		$	48,176
Funded status at end of period	$	(6,242	)	$	(6,548	)

The amounts recognized in our Consolidated Statements of Financial Condition are as follows (in thousands):



	November 30,
	2019			2018
Consolidated statements of financial condition:
Accrued expenses and other liabilities	$	6,242		$	6,548
Accumulated other comprehensive income, before taxes:
Net losses	$	(8,159	)	$	(6,382	)

The following tables summarize the components of net periodic pension cost and other amounts recognized in Other comprehensive income, before taxes (in thousands):



	Year Ended November 30,
	2019			2018			2017
Components of net periodic pension cost:
Service cost	$	500		$	400		$	450
Interest cost on projected benefit obligation	2,303			2,129			2,232
Expected return on plan assets	(3,008		)	(3,247		)	(3,021		)
Net amortization	122			—			19
Settlement losses	—			365			—
Net periodic pension cost	$	(83	)	$	(353	)	$	(320	)



	Year Ended November 30,
	2019			2018			2017
Amounts recognized in Other comprehensive income:
Net losses arising during the period	$	1,899		$	655		$	210
Amortization of net loss	(122		)	—			(19		)
Settlements during the period	—			(365		)	—
Total losses recognized in Other comprehensive income	$	1,777		$	290		$	191
Net losses/(gains) recognized in net periodic benefit cost and Other comprehensive income	$	1,694		$	(63	)	$	(129	)

The assumptions used to determine the actuarial present value of the projected obligation and net periodic pension benefit cost are as follows:



	Year Ended November 30,
	2019		2018		2017
Discount rate used to determine benefit obligation	2.90	%	4.30	%	3.60	%
Weighted average assumptions used to determine net pension cost:
Discount rate	4.30	%	3.60	%	3.90	%
Expected long-term rate of return on plan assets	6.25	%	6.25	%	6.25	%

Expected Benefit Payments - Expected benefit payments for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter are as follows (in thousands):



2020	$	2,244
2021	1,899
2022	2,886
2023	4,557
2024	4,442
2025 through 2029	23,286

Plan Assets - On May 16, 2017, we entered into an agreement with an external investment manager to invest and manage the plan’s assets under a strategy using a combination of two portfolios. The investment manager allocates the plan’s assets between a growth portfolio and a liability-driven portfolio according to certain target allocations and tolerance bands that are agreed to by the Administrative Committee of the U.S. Pension Plan. Such target allocations will take into consideration the plan’s funded ratio. The manager will also monitor the strategy and, as the plan’s funded ratio changes over time, will rebalance the strategy, if necessary, to be within the agreed tolerance bands and target allocations. The portfolios are comprised of certain common collective investment trusts that are established and maintained by the investment manager. The common collective trusts are valued at their NAV as a practical expedient for fair value.

German Pension Plan

We maintained a defined benefits pension plan located in Germany (the “German Pension Plan”) in connection with our Futures business. On December 28, 2017, a Liquidation Insurance Contract was entered into with Generali Lebensversicherung AG (“Generali”) to transfer the defined benefit pension obligations and insurance contracts to Generali, for approximately €6.5 million, which was paid in January 2018, and released us from any and all obligations under the German Pension Plan. In addition, on December 28, 2017, we received $3.25 million as consideration relating to the German Pension Plan in connection with releasing the prior plan sponsor from any indemnities. Accumulated other comprehensive income for the year ended November 30, 2018 included $5.3 million related to the transfer of the German Pension Plan.