15.	EMPLOYEE BENEFIT PLANS

The Company provides retirement and other post-retirement benefits to certain of its employees through defined benefit pension plans (the “pension plans”) and, in the U.S., a partially funded contributory post-retirement plan covering qualifying U.S. employees (the “medical plan” and together with the pension plans, the “post-retirement plans”). The Company also offers defined contribution plans to its employees. The post-retirement plans generally provide benefits to participants based on average levels of compensation. Expenses related to the Company’s employee benefit plans are included in “compensation and benefits” expense on the consolidated statements of operations.

Medical Plan—The medical plan was previously amended such that effective January 1, 2005 the plan limited post-retirement medical coverage to then former and current employees of the Company that were hired prior to January 1, 2005 and attained the age of 55 on or prior to December 31, 2005, and their dependents. Effective December 31, 2016, the Company will cease offering the medical plan.

In October 2016, the Company paid participants in the medical plan $2,936 in the aggregate to settle in full the Company’s obligations under the medical plan. The settlement of such obligations resulted in the recognition of a gain of $1,788 that is recorded as a reduction to compensation and benefits expense in the consolidated statements of operations for the year ended December 31, 2016.

Employer Contributions to Pension Plans—The Company’s funding policy for its U.S. and non-U.S. pension plans is to fund when required or when applicable upon an agreement with the plans’ trustees (the “Trustees”). Management also evaluates from time to time whether to make voluntary contributions to the plans.

The Company does not expect to make a contribution to the U.S. and U.K. pension plans during the year ending December 31, 2017. The Company expects to contribute approximately $10,000 to the other non-U.S. pension plans during the year ending December 31, 2017.

The following table summarizes the changes in the benefit obligations, the fair value of the assets, the funded status and amounts recognized in the consolidated statements of financial condition for the post-retirement plans. The Company uses December 31 as the measurement date for its post-retirement plans.

	Pension Plans						Medical Plan
	2016			2015			2016			2015
Change in benefit obligation
Benefit obligation at beginning of year	$	694,187		$	764,169		$	4,750		$	5,514
Service cost		1,235			1,530			11			27
Interest cost		19,871			24,600			167			179
Actuarial (gain) loss		135,164			(22,395	)		(1,639	)		(694	)
Benefits paid		(31,904	)		(33,253	)		(3,289	)		(276	)
Foreign currency translation and other adjustments		(99,732	)		(40,464	)
Benefit obligation at end of year		718,821			694,187			-			4,750
Change in plan assets
Fair value of plan assets at beginning of year		656,084			672,576
Actual return on plan assets		119,287			9,873
Employer contributions		11,343			39,301			3,289			276
Benefits paid		(29,384	)		(32,321	)		(3,289	)		(276	)
Foreign currency translation and other adjustments		(111,211	)		(33,345	)
Fair value of plan assets at end of year		646,119			656,084			-			-
Funded (deficit) at end of year	$	(72,702	)	$	(38,103	)	$	-		$	(4,750	)
Amounts recognized in the consolidated statements of financial condition at December 31, 2016 and 2015 consist of:
Prepaid pension asset (included in “other assets”)	$	822		$	20,785
Accrued benefit liability (included in “other liabilities”)		(73,524	)		(58,888	)	$	-		$	(4,750	)
Net amount recognized	$	(72,702	)	$	(38,103	)	$	-		$	(4,750	)
Amounts recognized in AOCI (excluding tax benefits of $33,864 and $30,416 at December 31, 2016 and 2015, respectively) consist of:
Actuarial net loss (gain)	$	192,855		$	165,462		$	-		$	(335	)
Prior service cost		30			2,362			-			-
Net amount recognized	$	192,885		$	167,824		$	-		$	(335	)

The following table summarizes the fair value of plan assets, the accumulated benefit obligation and the projected benefit obligation at December 31, 2016 and 2015:

	U.S. Pension Plans				Non-U.S. Pension Plans				Total
	As Of December 31,				As Of December 31,				As Of December 31,
	2016		2015		2016		2015		2016		2015
Fair value of plan assets	$	22,161	$	23,195	$	623,958	$	632,889	$	646,119	$	656,084
Accumulated benefit obligation	$	33,868	$	32,900	$	684,953	$	661,287	$	718,821	$	694,187
Projected benefit obligation	$	33,868	$	32,900	$	684,953	$	661,287	$	718,821	$	694,187

The following table summarizes the components of net periodic benefit cost (credit), the return on the Company’s post-retirement plan assets, benefits paid, contributions and other amounts recognized in AOCI for the years ended December 31, 2016, 2015 and 2014:

	Pension Plans									Medical Plan
	For The Year Ended									For The Year Ended
	December 31,									December 31,
	2016			2015			2014			2016			2015			2014
Components of Net Periodic Benefit Cost (Credit):
Service cost	$	1,235		$	1,530		$	971		$	11		$	27		$	33
Interest cost		19,871			24,600			30,041			167			179			194
Expected return on plan assets		(27,337	)		(28,301	)		(32,607	)
Amortization of:
Prior service cost		2,369			2,376			2,841
Net actuarial loss (gain)		3,888			5,440			4,360			(185	)					(529	)
Settlement gain											(1,788	)
Net periodic benefit cost (credit)	$	26		$	5,645		$	5,606		$	(1,795	)	$	206		$	(302	)


Actual return on plan assets	$	119,287		$	9,873		$	91,829
Employer contributions	$	11,343		$	39,301		$	7,648		$	3,289		$	276		$	221
Benefits paid	$	29,384		$	32,321		$	28,877		$	3,289		$	276		$	221
Other changes in plan assets and benefit obligations recognized in AOCI (excluding tax expense (benefit) of $(3,448), $7,151 and $(7,119) during the years ended December 31, 2016, 2015 and 2014, respectively):
Net actuarial (gain) loss	$	51,626		$	(4,650	)	$	41,082		$	(1,638	)	$	(695	)	$	428
Reclassification of prior service (cost) credit to earnings		(2,369	)		(2,376	)		(2,841	)
Reclassification of actuarial gain (loss) to earnings		(3,888	)		(5,440	)		(4,360	)		1,973						529
Currency translation and other adjustments		(20,309	)		(11,582	)		(10,485	)
Total recognized in AOCI	$	25,060		$	(24,048	)	$	23,396		$	335		$	(695	)	$	957
Net amount recognized in total periodic benefit cost and AOCI	$	25,086		$	(18,403	)	$	29,002		$	(1,460	)	$	(489	)	$	655

The amounts in AOCI on the consolidated statement of financial condition as of December 31, 2016 that are expected to be recognized as components of net periodic benefit cost (credit) for the year ending December 31, 2017 are as follows:

Pension

Plans

Prior service cost

Net actuarial loss (gain)

5,291

The assumptions used to develop actuarial present value of the projected benefit obligation and net periodic pension cost as of or for the years ended December 31, 2016, 2015 and 2014 are set forth below:

	Pension Plans									Medical Plan
	December 31,									December 31,
	2016			2015			2014			2016			2015			2014
Weighted average assumptions used to determine benefit obligations:
Discount rate		2.5	%		3.5	%		3.4	%		-			3.9	%		3.7	%
Weighted average assumptions used to determine net periodic benefit cost:
Discount rate		1.9	%		2.6	%		2.0	%		3.9	%		3.7	%		4.3	%
Expected long-term rate of return on plan assets		4.6	%		4.3	%		5.1	%		-			-			-
Healthcare cost trend rates used to determine net periodic benefit cost:
Initial											6.5	%		7.0	%		7.5	%
Ultimate											5.0	%		5.0	%		5.0	%
Year ultimate trend rate achieved										2019			2019			2019

Generally, the Company determined the discount rates for its defined benefit plans by utilizing indices for long-term, high-quality bonds and ensuring that the discount rate does not exceed the yield reported for those indices after adjustment for the duration of the plans’ liabilities.

In selecting the expected long-term rate of return on plan assets, the Company considered the average rate of earnings expected on the funds invested or to be invested to provide for the benefits of the plan, giving consideration to expected returns on different asset classes held by the plans in light of prevailing economic conditions as well as historical returns. This basis is consistent for all years presented.

The assumed cost of healthcare has an effect on the amounts reported for the Company’s medical plan. A 1% change in the assumed healthcare cost trend rate would increase (decrease) our cost and obligation as follows:

	1% Increase				1% Decrease
	2016		2015		2016		2015
Cost	$	-	$	28	$	-	$	(20	)
Obligation	$	-	$	661	$	-	$	(433	)

Expected Benefit Payments—The following table summarizes the expected benefit payments for the Company’s pension plans for each of the next five fiscal years and in the aggregate for the five fiscal years thereafter:

	Pension
	Plans
2017	$	21,014
2018		23,284
2019		24,307
2020		24,239
2021		25,587
2022-2026		143,220

Plan Assets—The following tables present the categorization of our pension plans’ assets as of December 31, 2016 and 2015, measured at fair value, into a fair value hierarchy and investments measured at NAV or its equivalent as a practical expedient in accordance with fair value measurement disclosure requirements:

	As of December 31, 2016
	Level 1		Level 2		Level 3		NAV (a)		Total
Assets:
Cash	$	23,341	$	-	$	-	$	-	$	23,341
Debt		63,431		-		-		-		63,431
Equities		29,287		-		-		-		29,287
Funds:
Alternative investments		1,216		-		-		23,062		24,278
Debt		10,494		-		-		320,560		331,054
Equity		167,981		-		-		6,129		174,110
Derivative		-		618		-		-		618
Total	$	295,750	$	618	$	-	$	349,751	$	646,119

	As of December 31, 2015
	Level 1		Level 2		Level 3		NAV (a)		Total
Assets:
Cash	$	19,172	$	-	$	-	$	-	$	19,172
Debt		56,247		-		-		-		56,247
Equities		25,901		-		-		-		25,901
Funds:
Alternative investments		668		-		-		525		1,193
Debt		11,699		-		-		325,312		337,011
Equity		210,897		-		-		6,247		217,144
Total	$	324,584	$	-	$	-	$	332,084	$	656,668
Liabilities:
Derivatives	$	-	$	584	$	-	$	-	$	584
Total	$	-	$	584	$	-	$	-	$	584

(a)	Represents certain investments measured at NAV or its equivalent as a practical expedient in determining fair value. In accordance with current accounting guidance, these investments have not been classified in the fair value hierarchy. See Note 3 for additional information.

Included in equity funds are $97,933 and $70,444 as of December 31, 2016 and 2015, respectively, that are invested in funds managed by LAM.

Consistent with the plans’ investment strategies, at December 31, 2016 and 2015, the Company’s U.S. pension plan had 53% and 50%, respectively, of the plans’ assets invested in equity funds in Level 1 and measured at NAV or its equivalent as a practical expedient and 47% and 50%, respectively, invested in Level 1 debt funds. The Company’s non-U.S. pension plans at December 31, 2016 and 2015 had 31% and 37%, respectively, of the plans’ assets invested in equities and equity funds that are primarily Level 1 assets; 62% and 60%, respectively, of the plans’ assets invested in debt and debt funds that are Level 1 assets and measured at NAV or its equivalent as a practical expedient, and 7% and 3%, respectively, of the plans’ assets invested in cash, which is a Level 1 asset, or in alternative investment funds that are primarily measured at NAV.

Investment Policies and Strategies—The primary investment goal is to ensure that the pension plans remain well funded, taking account of the likely future risks to investment returns and contributions. As a result, a portfolio of assets is maintained with appropriate liquidity and diversification that can be expected to generate long-term future returns that minimize the long-term costs of the pension plans without exposing the plans to an unacceptable risk of under-funding. The Company’s likely future ability to pay such contributions as are required to maintain the funded status of the plans over a reasonable time period is considered when determining the level of risk that is appropriate. The fair value of plan investments classified as Level 1 assets are based on market quotes. The fair value of plan investments measured at NAV or its equivalent as a practical expedient is determined based on information provided by external fund administrators and such investments are redeemable in the near term.

Defined Contribution Plans—Pursuant to certain matching contributions, the Company contributes to employer sponsored defined contribution plans. Such contributions amounted to $14,454, $12,493 and $11,904 for the years ended December 31, 2016, 2015 and 2014, respectively, which are included in “compensation and benefits” expense on the consolidated statements of operations.