10. Accrued Severance Benefits

The majority of accrued severance benefits is for employees in the Company’s Korean subsidiary, MagnaChip Semiconductor Ltd. Pursuant to the Employee Retirement Benefit Security Act of Korea, most employees and executive officers with one or more years of service are entitled to severance benefits upon the termination of their employment based on their length of service and rate of pay. As of September 30, 2012, 98.4% of employees of the Company were eligible for severance benefits.

Changes in accrued severance benefits for each period are as follows:


	Three Months Ended			Nine Months Ended			Three Months Ended			Nine Months Ended
	September 30, 2012						September 30, 2011
Beginning balance	$	97,967		$	91,882		$	98,647		$	88,973
Provisions		5,803			16,779			4,741			13,137
Severance payments		(753	)		(5,569	)		(2,804	)		(6,549	)
Translation adjustments		3,148			3,073			(8,370	)		(3,347	)

		106,165			106,165			92,214			92,214
Less: Cumulative contributions to the National Pension Fund		(383	)		(383	)		(414	)		(414	)
Group Severance insurance plan		(731	)		(731	)		(694	)		(694	)

Accrued severance benefits, net	$	105,051		$	105,051		$	91,106		$	91,106

The severance benefits are funded approximately 1.05% and 1.20% as of September 30, 2012 and 2011, respectively, through the Company’s National Pension Fund and group severance insurance plan which will be used exclusively for payment of severance benefits to eligible employees. These amounts have been deducted from the accrued severance benefit balance.

The Company is liable to pay the following future benefits to its non-executive employees upon their normal retirement age:


	Severance benefit
Remainder of 2012	$	59
2013		—
2014		339
2015		350
2016		1,264
2017		1,689
2018 – 2022		17,507

The above amounts were determined based on the non-executive employees’ current salary rates and the number of service years that will be accumulated upon their retirement dates. These amounts do not include amounts that might be paid to non-executive employees that will cease working with the Company before their normal retirement ages.