Accrued Severance Benefits

12 Months Ended

Dec. 31, 2023

11. Accrued Severance Benefits

The majority of accrued severance benefits are for employees in the Company’s Korean subsidiary. Pursuant to 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 December 31, 2023, 96% of all employees of the Company were eligible for severance benefits.

Changes in accrued severance benefits are as follows (in thousands):


	Year Ended December 31,
	2023			2022
Beginning balance	$	48,496		$	51,567
Provisions		5,333			6,289
Severance payments		(6,982	)		(6,012	)
Translation adjustments		(915	)		(3,348	)

		45,932			48,496
Less: Cumulative contributions to severance insurance deposit accounts		(29,882	)		(25,149	)
The National Pension Fund		(30	)		(41	)
Group severance insurance plan		—			(185	)

Accrued severance benefits, net	$	16,020		$	23,121

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.

Beginning in July 2018, the Company contributes to certain severance insurance deposit accounts a certain percentage of severance benefits that are accrued for eligible employees for their services from January 1, 2018 pursuant to Employee Retirement Benefit Security Act of Korea. These accounts consist of time deposits and other guaranteed principal and interest, and are maintained at insurance companies, banks or security companies for the benefit of employees. The Company deducts the contributions made to these severance insurance deposit accounts from its accrued severance benefits.

The Company is liable to pay the following future benefits to its

non-executive

employees upon their normal retirement age (in thousands):


	Severance Benefit
2024	$	315
2025		590
2026		658
2027		369
2028		3,402
2029 – 2033		17,941

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.

Korea’s mandatory retirement age is 60 years of age or older under the Employment Promotion for the Aged Act. The Company sets the retirement age of employees at 60.