Defined Contribution Plan, Pension and Other Post-Retirement Benefit Plans

Defined Contribution Plan - We sponsor a defined contribution plan covering eligible employees. Eligible employees can contribute on a pre-tax basis to the plan. In accordance with the terms of the 401(k) plan, we elect to match a certain percentage of the participants’ contributions to the plan, as defined. We recognized expense associated with the plan of $4.6 million in 2019, $3.6 million in 2018 and $3.0 million in 2017.

Pension and Other Post-Retirement Benefit Plans - We sponsor pension and other post-retirement benefit plans that cover certain hourly and salaried employees in the U.S. and United Kingdom. Each of the plans are frozen to new participants and to additional service credits earned. In December 2018, we consolidated the U.S. plans. Our policy is to make annual contributions to the plans to fund the minimum contributions, as required by local regulations.

During the three months ended March 31, 2019, the Company offered employees with deferred vested balances in the U.S. defined benefit pension plan the opportunity to voluntarily elect an early payout of their benefits. Payouts totaling $7.9 million were made during 2019 and were paid out of plan assets resulting in a non-cash settlement charge of $2.5 million, which was recorded in interest and other expense in the Condensed Consolidated Statements of Operations and is reflected in amortization of prior service cost in the net periodic (benefit) cost table below.

The change in benefit obligation, plan assets and funded status as of December 31 is as follows:



	U.S. Pension and Other Post-Retirement Benefit Plans						Non-U.S. Pension Plan
	2019			2018			2019			2018
Change in benefit obligation:
Benefit obligation — Beginning of the year	$	45,238		$	50,072		$	40,265		$	45,737
Service cost	—			—			—			788
Interest cost	1,483			1,664			1,112			1,030
Participant contributions	6			9			—			—
Benefits paid	(10,346		)	(2,360		)	(1,681		)	(1,816		)
Actuarial (gain) loss	3,196			(4,147		)	3,730			(2,772		)
Exchange rate changes	—			—			1,415			(2,702		)
Benefit obligation at end of the year	39,577			45,238			44,841			40,265
Change in plan assets:
Fair value of plan assets — Beginning of the year	42,962			45,046			30,424			35,377
Actual return on plan assets	6,588			(2,259		)	3,610			(1,808		)
Employer contributions	835			2,526			887			763
Participant contributions	6			9			—			—
Benefits paid	(10,346		)	(2,360		)	(1,681		)	(1,816		)
Exchange rate changes	—			—			1,081			(2,092		)
Fair value of plan assets at end of the year	40,045			42,962			34,321			30,424
Funded status	$	468		$	(2,276	)	$	(10,520	)	$	(9,841	)

Significant Obligation Loss - The projected U.S. benefit obligation includes a net loss of $3.2 million for the year ended December 31, 2019. The loss is a result of changes in key actuarial assumptions, including the early payout of benefits decrease in the discount rate. The projected Non-U.S. benefit obligation includes a net loss of $3.7 million for the year ended December 31, 2019 driven primarily by a decrease in the discount rate assumption.

As a result of pension legislation in the United Kingdom that was effective October 2018, the Company was required to amend its pension plan to equalize benefits between male and female pensioners. This resulted in additional pension obligation and a reduction to accumulated other comprehensive income of $0.8 million in 2018. There are no material updates to this estimate for as of December 31, 2019.

Amounts recognized in the Consolidated Balance Sheets at December 31 consisted of:



	U.S. Pension and Other Post-Retirement Benefit Plans						Non-U.S. Pension Plan
	2019			2018			2019			2018
Noncurrent assets	$	633		$	—		$	—		$	—
Current liabilities	(19		)	(28		)	—			—
Noncurrent liabilities	(146		)	(2,248		)	(10,520		)	(9,841		)
Amount recognized	$	468		$	(2,276	)	$	(10,520	)	$	(9,841	)

The components of net periodic (benefit) cost for the years ended December 31 were as follows:



	U.S. Pension and Other Post-Retirement Benefit Plans									Non-U.S. Pension Plan
	2019			2018			2017			2019			2018			2017
Service cost	$	—		$	—		$	116		$	—		$	—		$	—
Interest cost	1,483			1,664			1,810			1,112			1,030			1,138
Expected return on plan assets	(2,393		)	(3,151		)	(2,684		)	(1,117		)	(1,210		)	(1,196		)
Amortization of prior service cost ¹	2,528			6			6			47			—			—
Recognized actuarial loss	308			263			21			531			496			312
Net periodic cost (benefit)	$	1,926		$	(1,218	)	$	(731	)	$	573		$	316		$	254

¹Includes $2.5 million non-cash settlement charge arising from the early payout of the U.S. defined benefit plan benefits.

Net periodic (benefit) cost components, not inclusive of service costs, are recognized in Other Income within the Consolidated Statements of Operations.

Amounts Recognized in Accumulated Other Comprehensive Income (Loss) - Amounts recognized in accumulated other comprehensive income (loss), before taking into account income tax effects, at December 31 are as follows:



	U.S. Pension and Other Post-Retirement Benefit Plans						Non-U.S. Pension Plan
	2019		2018		2017		2019		2018		2017
Net actuarial loss	$	10,937	$	14,767	$	13,765	$	13,783	$	12,972	$	13,454
Prior service cost	45		51		57		747		788		—
	$	10,982	$	14,818	$	13,822	$	14,530	$	13,760	$	13,454

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) — Amounts recognized as other changes in plan assets and benefit obligations in other comprehensive income (loss), before taking into account income tax effects, for the year ended December 31 are as follows:



	U.S. Pension and Other Post-Retirement Plans						Non-U.S. Pension Plan
	2019			2018			2019			2018
Actuarial (gain) loss	$	(1,001	)	$	1,266		$	968		$	245
Amortization of actuarial (loss) gain	(2,829		)	(263		)	(37		)	781
Prior service credit	(6		)	(6		)	(416		)	(491		)
Total recognized in other comprehensive income (loss)	$	(3,836	)	$	997		$	515		$	535

Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:



	U.S. Pension and Other Post-Retirement Benefit Plans				Non-U.S. Pension Plan
	2019		2018		2019		2018
Discount rate	2.93	%	4.06	%	1.95	%	2.80	%

Weighted-average assumptions used to determine net periodic benefit cost at December 31 were as follows:



	U.S. Pension and Other Post-Retirement Plans						Non-U.S. Pension Plan
	2019		2018		2017		2019		2018		2017
Discount rate	3.40	%	3.42	%	3.87	%	2.80	%	2.45	%	2.70	%
Expected return on plan assets	5.34	%	7.00	%	7.00	%	3.70	%	3.70	%	3.70	%

The rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the target asset allocations. An incremental amount for active plan asset management and diversification, where appropriate, is included in the rate of return assumption. Our pension plan investment strategy is reviewed periodically, but no less frequently than annually.

We employ a total return investment approach whereby a mix of equities, fixed income and real estate investments are intended to maximize the long-term return of plan assets taking into consideration a prudent level of risk. The intent of this strategy is to minimize plan expenses by outperforming plan liabilities over the long run. Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity, balanced, fixed income and real estate investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and large and small capitalizations. Other assets, such as real estate, are used judiciously to perhaps enhance long-term returns and to improve portfolio diversification. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis in light of annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews. We expect to contribute approximately $1.0 million to our pension plans and our other post-retirement benefit plans in 2020.

Our current investment allocation target for our pension plans for 2019 and our weighted-average asset allocations of our pension assets for the years ended December 31, by asset category, are as follows:



	Target Allocation				Actual Allocations as of December 31,
	2019		2018		U.S. Pension Plan		Non-U.S. Pension Plan
	U.S.	Non-U.S.	U.S.	Non-U.S.	2019	2018	2019	2018
Cash and cash equivalents	—	—	—	—	—	1	1	1
Equity/Balanced securities	27	55	55	55	28	52	53	59
Fixed income securities	63	45	25	45	62	22	46	40
Real estate	10	—	20	—	10	25	—	—
	100%	100%	100%	100%	100%	100%	100%	100%

Our plan assets can be described as follows:

Equity Securities - Includes common stocks issued by U.S., United Kingdom and other international companies, equity funds that invest in common stocks and unit linked insurance policies. Equity investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost.

Balanced Securities - Includes funds primarily invested in a mix of equity and fixed income securities where the allocations are at the discretion of the investment manager. Investments generally allow near-term (within 90 days of the measurement date) liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost.

Fixed Income Securities - Includes U.S. dollar-denominated and United Kingdom and other international marketable bonds and convertible debt securities as well as fixed income funds that invest in these instruments. Investments generally allow near-term liquidity and are held in issues that are actively traded to facilitate transactions at minimum cost.

The fair value of fixed income securities is determined by either direct or indirect quoted market prices. When the value of assets held in separate accounts is not published, the value is based on the underlying holdings, which are primarily direct quoted market prices on regulated financial exchanges.

Real Estate - Real estate provides an indirect investment into a diversified and multi-sector portfolio of property assets. The fair value of real estate investments is determined by the fund managers. The fund managers value the real estate investments via independent third-party appraisals on a periodic basis. Assumptions used to revalue the properties are updated every quarter.

The fair values of our pension plan assets by asset category and by level as described in Note 4 for the years ended December 31, 2019 and 2018 are as follows:



	December 31, 2019
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	332	$	332	$	—	$	—
Equities:
U.S. large value	2,434		2,434		—		—
U.S. large growth	2,059		2,059		—		—
International blend	4,854		—		4,854		—
Emerging markets	1,603		1,603		—		—
Balanced	18,246		—		18,246		—
Fixed income securities:
Government bonds	24,917		—		24,917		—
Corporate bonds	12,634		—		12,634		—
Other	3,217		—		3,217		—
Real Estate:
U.S. property	4,070		—		—		4,070
Total pension fund assets	$	74,366	$	6,428	$	63,868	$	4,070

	December 31, 2018
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Cash and cash equivalents	$	623	$	623	$	—	$	—
Equities:
U.S. large value	4,815		4,815		—		—
U.S. large growth	5,270		5,270		—		—
International blend	9,134		—		9,134		—
Emerging markets	3,093		3,093		—		—
Balanced	17,952		—		17,952		—
Fixed income securities:
Government bonds	10,240		—		10,240		—
Corporate bonds	11,297		—		11,297		—
Real Estate:
U.S. property	10,962		—		—		10,962
Total pension fund assets	$	73,386	$	13,801	$	48,623	$	10,962

The fair value of our pension plan assets measured using significant unobservable inputs (Level 3) at December 31 are as follows:



	2019			2018
Beginning balance	$	10,962		$	10,153
Actual return on assets held at reporting date	430			809
Purchases, sales and settlements, net	(7,322		)	—
Ending balance	$	4,070		$	10,962

The following table summarizes our expected future benefit payments of our pension and other post-retirement benefit plans:



Year Ending December 31,	Pension Plans
2020	$	4,390
2021	$	4,396
2022	$	4,360
2023	$	4,453
2024	$	4,493
2025 to 2029	$	22,209