NOTE 8. POST-RETIREMENT BENEFITS

Switzerland Defined Benefit Plan

During the first quarter of fiscal year 2014, we sold our Zurich Business, and as part of the sale transferred our pension plan covering employees of our Swiss subsidiary (the Swiss Plan) to II-VI. At September 28, 2013, we had no remaining obligations under the Swiss Plan.

Net periodic pension costs associated with our Swiss Plan are recorded in discontinued operations for the three months ended September 28, 2013 and September 29, 2012, and included the following:


	Three Months Ended
	September 28, 2013			September 29, 2012
	(Thousands)
Service cost	$	703		$	809
Interest cost		169			183
Expected return on plan assets		(279	)		(306	)
Net amortization		76			93

Net periodic pension costs	$	669		$	779

During the three months ended September 28, 2013 and September 29, 2012, we contributed $0.5 million and $0.6 million, respectively, to our Swiss Plan.

Japan Defined Contribution and Benefit Plan

In connection with our acquisition of Opnext, we assumed a defined contribution plan and a defined benefit plan that provides retirement benefits to our employees in Japan.

Under the defined contribution plan, contributions are provided based on grade level and totaled $0.2 million for the three months ended September 28, 2013 and $0.3 million for the period from July 23, 2012, the acquisition date, to September 29, 2012, the end of our first quarter of fiscal year 2013. Employees can elect to receive the benefit as additional salary or contribute the benefit to the plan on a tax-deferred basis.

Under the defined benefit plan in Japan (the Japan Plan), we calculate benefits based on an employee’s individual grade level and years of service. Employees are entitled to a lump sum benefit upon retirement or upon certain instances of termination. As of September 28, 2013, there were no plan assets. Net periodic pension costs for the Japan Plan for the three months ended September 28, 2013 and September 29, 2012 included the following:


	Three Months Ended
	September 28, 2013		September 29, 2012
	(Thousands)
Service cost	$	248	$	294
Interest cost		24		37
Net amortization		16		22

Net periodic pension costs	$	288	$	353

In connection with the Japan Plan, we have $0.2 million in accrued expenses and other liabilities and $8.0 million in other non-current liabilities in our condensed consolidated balance sheet as of September 28, 2013, to account for the projected benefit obligations.

We made benefit payments of $0.1 million and less than $0.1 million, respectively, under the Japan plan during the three months ended September 28, 2013 and September 29, 2012.