14. Defined Benefit Pension Obligation

The Company has established a defined pension plan for its employees in the Switzerland subsidiary. The plan provides benefits to employees upon retirement, death or disability. The Company uses June 30 as the year-end measurement date for this plan. The unfunded liability of $2.9 million was recognized in long-term other liabilities in the accompanying balance sheet as of June 30, 2016. Actuarial loss of $0.5 million was recognized in other comprehensive loss in fiscal 2016.

Obligations and Funded Status

The following table presents the funded status of the defined benefit pension plan:

	June 30,
(in thousands)	2016			2015
Change in benefit obligation:
Benefit obligation—beginning of fiscal year	$	8,861		$	5,294
Service cost		1,903			980
Interest cost		76			107
Plan participants' contributions		2,239			3,010
Plan amendment		(490	)		—
Actuarial loss		1,163			1,007
Foreign currency changes		(347	)		(210	)
Benefit and expense payments		(970	)		(1,327	)

Benefit obligation—end of fiscal year	$	12,435		$	8,861


Change in plan assets:
Plan assets—beginning of fiscal year	$	7,184		$	4,357
Employer contributions		1,226			1,166
Actual return on plan assets		176			152
Plan participants' contributions		2,239			3,010
Foreign currency changes		(283	)		(174	)
Benefit and expense payments		(970	)		(1,327	)

Plan assets—end of fiscal year	$	9,572		$	7,184


Funded status	$	(2,863	)	$	(1,677	)

Amounts recognized within the consolidated balance sheets:

	June 30,
(in thousands)	2016		2015
Assets	$	—	$	—
Long-term liabilities		2,863		1,677

Net amount recognized	$	2,863	$	1,677

The following table presents the amounts recognized in accumulated other comprehensive loss (before tax) for the defined benefit pension plan:

	June 30,
(in thousands)	2016			2015
Net loss	$	2,580		$	1,517
Prior service (credit) cost		(514	)		—

Accumulated other comprehensive loss	$	2,066		$	1,517

The following table presents the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for those defined benefit pension plans where accumulated benefit obligation exceeded the fair value of plan assets:

	June 30,
(in thousands)	2016		2015
Projected benefit obligation	$	12,435	$	8,861
Accumulated benefit obligation	$	9,572	$	7,184
Fair value of plan assets	$	9,572	$	7,184

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss

The following table shows the components of the Company's net periodic benefit costs and the other amounts recognized in other comprehensive (earnings) loss, before tax, related to the Company's defined benefit pension plan:

	Year ended June 30,
(in thousands)	2016			2015			2014
Net Periodic Benefit Costs:
Service cost	$	1,903		$	980		$	734
Interest cost		76			107			60
Expected returns on assets		(102	)		(92	)		(61	)
Amortization of net (gain) loss		53			3			—

	$	1,930		$	998		$	733


Other Amounts Recognized in Other Comprehensive Loss:
Net (gain) loss arising during the year	$	1,093		$	953		$	567
Prior service cost (credit)		(491	)		—			—
Amortization of net (gain) loss		(53	)		(3	)		—

	$	549		$	950		$	567

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during fiscal year 2017 related to the Company's defined benefit pension plans are as follows:

(in thousands)	2017
Net loss	$	2,350
Prior service (credit) cost		(445	)

Accumulated other comprehensive loss	$	1,905

Assumptions

The assumptions used to determine net periodic benefit cost and to compute the expected long-term return on assets for the Company's defined benefit pension plans were as follows:

	Fiscal Years
	2016			2015			2014
Net Periodic Benefit Costs:
Discount rate		0.4	%		0.9	%		2.0	%
Rate of compensation increase		2.0	%		2.0	%		2.0	%
Expected long-term return on assets		1.4	%		1.5	%		2.0	%

The assumptions used to measure the benefit obligation for the Company's defined benefit pension plans were as follows:

	Year ended June 30,
	2016			2015			2014
Benefit Obligation:
Discount rate		1.4	%		1.5	%		2.0	%
Rate of compensation increase		2.0	%		2.0	%		2.0	%

Estimated Contributions and Future Benefit Payments

The Company made contributions of approximately $1.2 million to the defined benefit pension plans during fiscal years 2016 and 2015, respectively. The Company expects total contributions to the defined benefit pension plans for fiscal year 2017 will be approximately $1.3 million.

Estimated future benefit payments to the defined benefit pension plans at June 30, 2016 were as follows:

Year Ending June 30, (in thousands)	Future Benefits
2017	$	982
2018		910
2019		844
2020		802
2021		760
Thereafter		3,991

Total	$	8,289

Plan Assets

The plan assets are invested in insurance contracts with Swiss Life Foundation BVG (BVG) insurance company based in Zurich, Switzerland at the end of fiscal 2016 and 2015 and are expected to be invested 100% in insurance contracts in fiscal 2017, which is reinsured by Swiss Life Ltd (SLL). SLL invests the vested pension capital and provides a 100% capital and interest rate guarantee as negotiated by the Company. In 2016, the Company negotiated a guaranteed interest rate of 1.25% for mandatory retirement savings and 0.75% for supplementary retirement savings. The pension plan is entitled to an annual bonus from the SLL comprising the effective savings, risk and cost results. The technical administration and management of the savings account are guaranteed by the SLL on behalf of BVG. Insurance benefits due are paid directly to the entitled persons by the SLL in the name of and for the account of the collective foundation. The Company has committed itself to pay the annual contributions and costs due under the pension fund regulations.

The contract of affiliation between the Company and BVG can be terminated by either side. In the event of a termination, recipients of retirement and survivors' benefits would remain with the collective foundation. The Company commits itself to transfer its active insured members and recipients of disability benefits to the new employee benefits institution, thus releasing BVG from all obligations.