PENSION PLAN

12 Months Ended

Dec. 31, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

PENSION PLAN

15. PENSION PLAN

A Canadian subsidiary of the Company sponsors a defined benefit pension plan in which a majority of its employees are members. The employer contributes 100% to the plan. The benefits, or the rate per year of credit service, are established by the Company’s subsidiary and updated at its discretion.

Cost of Benefits

The components of the expense the Company incurred under the pension plan are as follows:

	Year Ended December 31,
	2016			2015
Current service cost, net of employee contributions	$	46		$	50
Interest cost on accrued benefit obligation		102			103
Expected return on plan assets		(163	)		(160	)
Amortization of transitional obligation		10			10
Amortization of past service costs		7			7
Amortization of net actuarial gain		37			44
Total cost of benefit	$	39		$	54

Benefit Obligation

The Company’s obligation for the pension plan is valued annually as of the beginning of each fiscal year. The projected benefit obligation represents the present value of benefits ultimately payable to plan participants for both past and future services expected to be provided by the plan participants. 

The Company’s obligations pursuant to the pension plan are as follows: 

	December 31,
	2016			2015
Projected benefit obligation, at beginning of year	$	2,578		$	3,057
Current service cost, net of employee contributions		46			50
Employee contributions		30			30
Interest cost		102			103
Actuarial loss (gain)		15			(66	)
Impact of change in discount rate		39			(37	)
Benefits paid		(167	)		(160	)
Foreign exchange adjustment		(15	)		(399	)
Projected benefit obligation, at end of year	$	2,628		$	2,578

A summary of expected benefit payments related to the pension plan is as follows:

Years Ending December 31,	Pension Plan
2017	$	159
2018		158
2019		154
2020		151
2021		147
2022-2026		689

 Other changes in plan assets and benefit obligations recognized in other comprehensive income / (loss) are as follows:

	Year Ended December 31,
	2016			2015
Net (loss) / gain	$	(220	)	$	108
Amortization of prior service cost		7			7
Amortization of gain		37			44
Amortization of transitional asset		10			11
		(166	)		170
Taxes		(9	)		46
Total recognized in other comprehensive (loss) / income, net of taxes	$	(157	)	$	124

The estimated net loss amortized from accumulated other comprehensive income / (loss) into net periodic benefit cost over the next year amounts to approximately $37. The estimated prior service cost amortized from accumulated other comprehensive income into net periodic benefit cost over the next year amounts to approximately $7. The estimated transitional asset amortized from accumulated other comprehensive income into net periodic benefit cost over the next year amounts to approximately $10.

The accumulated other comprehensive income / (loss) consists of the following amounts that have not yet been recognized as components of net benefit cost:

	December 31,
	2016			2015
Unrecognized prior service cost	$	96		$	96
Unrecognized net actuarial loss		1,348			48
Unrecognized transitional obligation		58			1,191
Deferred income taxes		(404	)		(394	)
Total	$	1,098		$	941

Plan Assets

Assets held by the pension plan are invested in accordance with the provisions of the Company’s approved investment policy. The pension plan’s strategic asset allocation was structured to reduce volatility through diversification and enhance return to approximate the amounts and timing of the expected benefit payments. The asset allocation for the pension plan at the end of 2016 and 2015 and the target allocation for 2017, by asset category, is as follows:

	December 31,						2017 Target
	2016			2015			Allocation
Equity securities		37	%		43	%		37	%
Fixed income securities		53			47			53
Real estate		8			8			8
Other		2			2			2
Total		100	%		100	%		100	%

The fair market values, by asset category are as follows:

	Fair Value Measurements
	at December 31,
	2016		2015
Equity securities	$	909	$	1,082
Fixed income securities		1,302		1,182
Real estate		196		201
Other		49		50
Total	$	2,456	$	2,515

Changes in the assets held by the pension plan in the years 2016 and 2015 are as follows: 

	December 31,
	2016			2015
Fair value of plan assets, at beginning of year	$	2,515		$	2,706
Actual return on plan assets		(3	)		164
Employer contributions		96			135
Employee contributions		30			30
Benefits paid		(167	)		(160	)
Foreign exchange adjustment		(15	)		(360	)
Fair value of plan assets, at end of year	$	2,456		$	2,515

Contributions

The Company’s policy is to fund the pension plan at or above the minimum required by law. The Company made $0.1 million of contributions to its defined benefit pension plan in each of the 2016 and 2015 years. The Company expects to make contributions of less than $0.1 million to the defined benefit pension plan in 2017. Changes in the discount rate and actual investment returns which continue to remain lower than the long-term expected return on plan assets could result in the Company making additional contributions.

Funded Status

The funded status of the pension plan is as follows:

	December 31,
	2016		2015
Projected benefit obligation	$	2,628	$	2,578
Fair value of plan assets		2,456		2,515
Accrued obligation (long term)	$	172	$	63

Assumptions

Assumptions used in accounting for the pension plan are as follows:

	December 31,
	2016			2015
Weighted average discount rate used to determine the accrued benefit obligations		3.80	%		3.90	%
Discount rate used to determine the net pension expense		3.90	%		3.80	%
Expected long-term rate on plan assets		6.50	%		6.50	%

To determine the expected long-term rate of return on pension plan assets, the Company considers the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. The Company applies the expected rate of return to a market related value of the assets which reduces the underlying variability in assets to which the Company applies that expected return. The Company amortizes gains and losses as well as the effects of changes in actuarial assumptions and plan provisions over a period no longer than the average future service of employees.

Primary actuarial assumptions are determined as follows:

The expected long-term rate of return on plan assets is based on the Company’s estimate of long-term returns for equities and fixed income securities weighted by the allocation of assets in the plans. The rate is impacted by changes in general market conditions, but because it represents a long-term rate, it is not significantly impacted by short-term market swings. Changes in the allocation of plan assets would also impact this rate.

The assumed discount rate is used to discount future benefit obligations back to today’s dollars. The discount rate is reflective of yield rates on U.S. long-term investment grade corporate bonds on and around the December 31 valuation date. This rate is sensitive to changes in interest rates. A decrease in the discount rate would increase the Company’s obligation and expense.