Accrued Severance Benefits

3 Months Ended

Mar. 31, 2015

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, eligible 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 March 31, 2015, 98% of employees of the Company were eligible for severance benefits.

Changes in accrued severance benefits are as follows:


	Three Months Ended
	March 31, 2015			March 31, 2014
Beginning balance	$	140,405		$	135,356
Provisions		7,260			4,034
Severance payments		(1,341	)		(1,514	)
Translation adjustments		(726	)		(1,700	)

		145,598			136,176
Less: Cumulative contributions to the National Pension Fund		(343	)		(375	)
Group severance insurance plan		(764	)		(788	)

Accrued severance benefits, net	$	144,491		$	135,013

The severance benefits funded through the Company’s National Pension Fund and group severance insurance plan 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 2015	$	295
2016		1,166
2017		1,713
2018		2,903
2019		2,278
2020		3,121
2021 – 2025		31,155

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.