POST-RETIREMENT BENEFITS

401(k) Plan

In the U.S., we sponsor a 401(k) plan that allows voluntary contributions by eligible employees, who may elect to contribute up to the maximum allowed under the U.S. Internal Revenue Service regulations. We generally make 100 percent matching contributions on the first 3 percent and 50 percent matching contributions on the following 2 percent (up to a maximum of $18,000 per eligible employee for calendar year 2016 and 2017). We recorded related expenses of $0.5 million, $0.4 million and $0.5 million in fiscal years ended July 1, 2017, July 2, 2016 and June 27, 2015, respectively.

U.K. Defined Contribution Plan

We contribute to a U.K. based defined contribution pension scheme for employees. Contributions under this plan and the related expenses were $1.1 million, $1.2 million and $1.2 million in the fiscal years ended July 1, 2017, July 2, 2016 and June 27, 2015, respectively.

Japan Defined Contribution Plan

We contribute to a Japan based defined contribution plan that provides retirement benefits to our employees in Japan. Under the defined contribution plan, contributions are provided based on grade level and totaled $0.5 million, $0.5 million and $0.5 million for the years ended July 1, 2017, July 2, 2016 and June 27, 2015, respectively. Employees can elect to receive the benefit as additional salary or contribute the benefit to the plan on a tax-deferred basis.

Japan Defined Benefit Plan

We contribute to a Japan based defined benefit plan that provides retirement benefits to our employees in Japan. 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. During the second quarter of fiscal year 2015, we sold our Komoro Business, and as part of the sale transferred a portion of our Japan Plan covering employees of the Komoro Business to Ushio Opto.

As of July 1, 2017, there were no Japan Plan assets. As of July 1, 2017, there was $0.1 million in accrued expenses and other liabilities and $6.4 million in other non-current liabilities in our consolidated balance sheet, to account for the projected benefit obligations under the Japan Plan.

The reconciliation of the actuarial present value of the projected benefit obligations for the defined benefit plan for the fiscal year ended July 1, 2017 and July 2, 2016 was as follows:



	July 1, 2017			July 2, 2016
	(Thousands)
Change in projected benefit obligation:
Projected benefit obligation, beginning of period	$	6,912		$	4,817
Service cost	624			560
Interest cost	4			48
Benefits paid	(197		)	(144		)
Actuarial (gain) loss on obligation	(213		)	614
Currency translation adjustment	(578		)	1,017
Projected benefit obligation, end of period	$	6,552		$	6,912
Amounts recognized in consolidated balance sheets:
Accrued expenses and other liabilities:
Underfunded pension liability	$	117		$	50
Other non-current liabilities:
Underfunded pension liability	$	6,435		$	6,862
Amounts recognized in accumulated other comprehensive income, net of tax:
Pension actuarial loss	$	150		$	363
Accumulated benefit obligation, end of period	$	6,552		$	6,912

Net periodic pension cost associated with the Japan Plan in fiscal years ended July 1, 2017, July 2, 2016 and June 27, 2015 include the following components:



	July 1, 2017		July 2, 2016		June 27, 2015
	(Thousands)
Service cost	$	624	$	560	$	693
Interest cost	4		48		69
Net amortization	—		—		35
Net periodic pension cost	$	628	$	608	$	797

The projected and accumulated benefit obligations for the Japan Plan were calculated as July 1, 2017 and July 2, 2016 using the following assumptions:



	July 1, 2017		July 2, 2016
Discount rate	0.1	%	0.9	%
Salary increase rate	2.2	%	2.2	%
Expected average remaining working life (in years)	14.3		14.3

As of July 1, 2017, the accumulated benefit obligation was $6.6 million. Estimated future benefit payments under the Japan Plan are estimated to be $0.1 million in fiscal year 2018, $0.2 million in fiscal year 2019, $0.3 million in fiscal year 2020, $0.3 million in fiscal year 2021, $0.3 million in fiscal year 2022 and a total of $2.7 million for the following 5 years.