17. EMPLOYEE BENEFIT PLANS

Defined Benefit Plans

We sponsor a defined benefit pension plan (“Pension Plan”) covering a majority of our U.S.-based employees. Expense recognized in relation to the pension plan is based upon actuarial valuations. Inherent in those valuations are key assumptions including discount rates and, where applicable, expected returns on assets and projected future salary rates. The discount rates used in the valuation of the Pension Plan are evaluated annually based on current market conditions. Benefits are generally based on the employee’s compensation and years of service.

We also have a non-qualified supplemental executive retirement plan (“SERP”). The SERP, which is unfunded, provides defined pension benefits in addition to what is provided under the Pension Plan to eligible executives based on average earnings, years of service and age at retirement.

In 2009, we amended the Pension Plan. In accordance with the provisions of the Pension Plan amendment, no additional service benefits will be earned by participants in the Pension Plan after December 31, 2009. The amount of eligible compensation that is used to calculate a plan participant’s pension benefit will continue to include any compensation earned by the employee through December 31, 2019. After December 31, 2019, all plan participants will have a frozen pension benefit.

The measurement date used for the Pension Plan and SERP is December 31. The components of the expense consisted of the following:

	Pension Plan									SERP
	For the years ended December 31,									For the years ended December 31,
(in thousands)	2015			2014			2013			2015		2014		2013
Interest cost	$	2,940		$	3,279		$	3,642		$	1,713	$	1,685	$	1,637
Expected return on plan assets, net of expenses		(3,876	)		(4,571	)		(4,396	)		-		-		-
Special termination benefits		860			1,838			-			290		365		-
Settlement charges		3,345			2,021			2,302			1,121		2,279		1,083
Amortization of net loss		2,095			1,239			2,918			2,354		2,188		2,844
Total for defined benefit plans	$	5,364		$	3,806		$	4,466		$	5,478	$	6,517	$	5,564

In the fourth quarter of 2014, we announced the Restructuring Plan, providing each employee the benefit of an additional three years of credited service related to the applicable Pension Plan and SERP for which they qualify (see Note 5 – Employee and Contract Termination Costs). The special termination charge represents the cost of providing these additional benefits to the employees retiring under the terms of the early retirement program.

During 2015 and 2014, we recognized $4.5 million and $4.3 million, respectively, of settlement charges related to lump-sum distributions from our Pension Plan and SERP. Settlement charges are recorded when total lump sum distributions for a plan’s year exceed the total projected service cost and interest cost for that plan year.

Assumptions used in determining the annual retirement plans expense were as follows:

	Pension Plan						SERP
	For the years ended December 31,						For the years ended December 31,
	2015		2014		2013		2015		2014		2013
Discount rate		3.46%		4.27%		3.33%		3.14%		3.62%		2.76%
Long-term rate of return on plan assets		7.50%		7.50%		7.50%	N / A		N / A		N / A
Increase in compensation levels		4.54%		5.05%		5.37%		4.41%		4.83%		5.05%

The discount rate used to determine our future pension obligations is based on a bond portfolio approach that includes securities rated Aa or better with maturities matching our expected benefit payments from the plans.

The expected long-term rate of return on plan assets is based on the weighted-average expected rate of return and capital market forecasts for each asset class employed. Our expected rate of return on plan assets also considers our historical compounded return on plan assets for 10 and 15 year periods.

The increase in compensation levels assumption is based on actual past experience and the near-term outlook.

Obligations and Funded Status

Defined benefit pension plan obligations and funded status are actuarially valued as of the end of each year. The following table presents information about our plan assets and obligations:

	Pension Plan						SERP
	For the years ended December 31,						For the years ended December 31,
(in thousands)	2015			2014			2015			2014
Accumulated benefit obligation	$	78,859		$	85,279		$	46,428		$	45,617
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	92,384		$	82,151		$	52,374		$	48,572
Interest cost		2,940			3,279			1,713			1,685
Benefits paid		(484	)		(407	)		(251	)		(253	)
Actuarial (gains) losses		(525	)		14,344			566			6,650
Curtailments		-			(1,097	)		-			(53	)
Special termination benefits		860			1,838			290			365
Settlement charges		(10,554	)		(7,724	)		(2,418	)		(4,592	)
Projected benefit obligation at end of year		84,621			92,384			52,274			52,374
Plan assets:
Fair value at beginning of year		59,096			63,113			-			-
Actual return on plan assets		(2,345	)		4,114			-			-
Company contributions		-			-			2,669			4,845
Benefits paid		(484	)		(407	)		(251	)		(253	)
Settlement charges		(10,554	)		(7,724	)		(2,418	)		(4,592	)
Fair value at end of year		45,713			59,096			-			-
Under funded status	$	(38,908	)	$	(33,288	)	$	(52,274	)	$	(52,374	)
Amounts recognized as assets and liabilities in
the consolidated balance sheets:
Current liabilities	$	-		$	-		$	(17,500	)	$	(4,650	)
Non-current liabilities		(38,908	)		(33,288	)		(34,774	)		(47,724	)
Total	$	(38,908	)	$	(33,288	)	$	(52,274	)	$	(52,374	)
Amounts recognized in accumulated other comprehensive
loss consist of:
Net loss	$	27,502		$	27,247		$	22,731		$	25,640

Other changes in plan assets and benefit obligations recognized in net periodic benefit cost and other comprehensive loss (income) consist of:

	Pension Plan						SERP
	For the years ended December 31,						For the years ended December 31,
(in thousands)	2015			2014			2015			2014
Net actuarial loss	$	5,695		$	14,801		$	566		$	6,650
Amortization of net loss		(2,095	)		(1,239	)		(2,354	)		(2,188	)
Curtailment charges		-			(1,097	)		-			(53	)
Settlement charges		(3,345	)		(2,021	)		(1,121	)		(2,279	)
Total recognized in other comprehensive (loss) income		255			10,444			(2,909	)		2,130
Net periodic benefit cost		5,364			3,806			5,478			6,517
Total recognized in net periodic benefit cost and other comprehensive loss	$	5,619		$	14,250		$	2,569		$	8,647

We expect to recognize amortization from accumulated other comprehensive (loss) income into net periodic benefit costs of $2.1 million and $2.1 million for the net actuarial loss during 2016 related to our Pension Plan and SERP, respectively.

Information for defined benefit plans with an accumulated benefit obligation in excess of plan assets was as follows:

	Pension Plan				SERP
	For the years ended December 31,				For the years ended December 31,
(in thousands)	2015		2014		2015		2014
Accumulated benefit obligation	$	78,859	$	85,279	$	46,428	$	45,617
Fair value of plan assets	$	45,713	$	59,096	$	-	$	-

Information for defined benefit plans with a projected benefit obligation in excess of plan assets was as follows:

	Pension Plan				SERP
	For the years ended December 31,				For the years ended December 31,
(in thousands)	2015		2014		2015		2014
Projected benefit obligation	$	84,621	$	92,384	$	52,274	$	52,374
Fair value of plan assets	$	45,713	$	59,096	$	-	$	-

Assumptions used to determine benefit obligations for the defined plans was as follows:

	Pension Plan				SERP
	For the years ended December 31,				For the years ended December 31,
	2015		2014		2015		2014
Discount rate		3.75%		3.46%		3.39%		3.14%
Rate of compensation increases		4.32%		4.54%		4.26%		4.42%

Plan Assets

Our investment policy is to maximize the total rate of return on plan assets to meet the long-term funding obligations of the Pension Plan. Plan assets are invested using a combination of active management and passive investment strategies. Risk is controlled through diversification among multiple asset classes, managers, styles and securities. Risk is further controlled both at the manager and asset class level by assigning return targets and evaluating performance against these targets. Information related to our Pension Plan asset allocations by asset category were as follows:

			Percentage of Plan Assets
	Target Allocations		as of December 31,
Investment Type	for 2016		2015		2014
US equity securities		27%		25%		30%
Non-US equity securities		39%		43%		36%
Fixed-income securities		30%		23%		28%
Other		4%		9%		6%
Total		100%		100%		100%

U.S. equity securities include common stocks of large, medium and small companies, which are predominantly U.S.-based. Non-U.S. equity securities include common stocks of large, medium and small companies which are domiciled outside the U.S. Fixed-income securities include securities issued or guaranteed by the U.S. government and corporate debt obligations, as well as investments in hedge fund products. Real estate investments include, but are not limited to, investments in office, retail, apartment and industrial properties.

Fair Value Measurements

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following table sets forth our plan asset categories that are measured at fair value as of December 31, 2015 and the level of inputs utilized for fair value.

	As of December 31, 2015
(in thousands)		Total		Level 1		Level 2		Level 3
US equity securities
Mutual funds		$	11,457	$	11,457		-		-
Non-US equity securities
Mutual funds			19,634		19,634		-		-
Fixed income securities
Mutual funds			10,222		10,222		-		-
Other
Alternative investment funds			3,681		-		3,681		-
Subtotal		$	44,994	$	41,313	$	3,681	$	—
Cash			719		719		-		-
Total		$	45,713	$	42,032	$	3,681	$	—

The following table sets forth our plan asset categories that are measured at fair value as of December 31, 2014 and the level of inputs utilized for fair value.

	As of December 31, 2014
(in thousands)		Total		Level 1		Level 2		Level 3
US equity securities
Mutual funds		$	17,650	$	17,650		-		-
Non-US equity securities
Mutual funds			21,264		21,264		-		-
Fixed income securities
Mutual funds			16,758		16,758		-		-
Other
Alternative investment funds			3,369		-		3,369		-
Subtotal		$	59,041	$	55,672	$	3,369	$	—
Cash			55		55
Total		$	59,096	$	55,727	$	3,369	$	—

Cash Flows

Subsequent to year-end, the Company made a voluntarily contribution of $10.0 million to the Pension Plan investment fund. We anticipate contributing $17.5 million to fund current benefit payments for the SERP in 2016.

The estimated future benefit payments expected to be paid out of the plans for the next ten years are as follows:

(in thousands)	Pension Plan		SERP
2016	$	3,630	$	17,500
2017	$	3,655	$	1,753
2018	$	4,146	$	2,359
2019	$	4,147	$	2,467
2020	$	5,073	$	2,549
2021-2025	$	26,252	$	15,380

Defined Contribution Retirement Plan

Substantially all U.S.-based employees of the Company are covered by a Company-sponsored defined contribution plan (“DC Plan”). The Company matches a portion of employees’ voluntary contribution to this plan and makes additional contributions to eligible employees’ 401K accounts in accordance with enhanced provisions to the DC Plan. The amount contributed to each employee’s account is a percentage of the employee’s total eligible compensation based upon age and service with the Company as of the first day of each year. Expense related to our DC plan was $17.4 million in 2015, $17.5 million in 2014 and $16.4 million in 2013.

Employees of our newly-acquired TVN subsidiary are covered by state managed defined contribution plans. Contributions to these defined contribution plans are charged to the income statement in the period to which they relate.

Executive Deferred Compensation Plan

We have an unqualified executive deferred compensation plan (“Deferred Compensation Plan”) that is available to certain management level employees and directors of the Company. Under the Deferred Compensation Plan, participants may elect to defer receipt of a portion of their annual compensation. The Deferred Compensation Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits. We may use corporate-owned life insurance contracts held in a rabbi trust to support the plan. We have investments valued at $42.8 million, including $27.0 within this rabbi trust and $15.8 million held in mutual funds, at December 31, 2015. The cash surrender value of the Company-owned life insurance contracts totaled $27.0 million and $20.7 million at December 31, 2015 and December 31, 2014, respectively, and is included within other non-current assets on our consolidated balance sheets. Gains or losses related to these insurance contracts are included within miscellaneous, net in our consolidated statements of operations. The unsecured obligation to pay the deferred compensation, including deferred directors fees, and adjusted to reflect the positive or negative performance of investment measurement options selected by each participant, totaled $42.0 million and $42.8 million at December 31, 2015 and December 31, 2014, respectively.