Note 12 — Profit-Sharing, Pension, and Other Postretirement Benefit Plans

Defined Contribution Plans

The Company’s 401(k) plan provides matching contributions of 50% of participant contributions up to 6%. Additionally, the Company may make discretionary contributions based upon exceeding Company performance targets of up to 2% of eligible earnings for all employees regardless of participation. The 401(k) matching contribution expense was $1.4 million and $1.0 million for the years ended December 31, 2015 and 2014, respectively. No discretionary contributions were made in the years ended December 31, 2015 and 2014.

As a result of the acquisition of VLCY, the Company also has contractual obligations under a frozen replacement benefit plan (“RBP”) for a small number of terminated and retired executives. Because the RBP is frozen, no participant can make or is entitled to additional contributions. Instead, the Company has accrued a liability totaling $0.4 million at both December 31, 2015 and 2014, to reflect its estimated future obligation under the RBP. The current portion of the RBP liability, which was $22 thousand at both December 31, 2015 and 2014, is included in Other in Note 7 − Accrued Expenses. The long-term portion of the RBP liability, which was $0.3 million and $0.4 million at December 31, 2015 and 2014, respectively, is included in Long-Term Deferred Compensation in Note 8 – Other Liabilities.

Defined Benefit Plan

As a result of the acquisition of VLCY, the Company also has a frozen defined benefit pension plan covering certain terminated and retired domestic employees. The benefits are primarily based on years of service and/or compensation during the years immediately preceding retirement. The Company uses a measurement date of December 31^st for its pension plan.

GAAP requires reporting of the funded status of defined benefit postretirement plans as an asset or liability in the statement of financial position, recognizing changes in the funded status due to gains or losses, prior service costs, and net transition assets or obligations in other comprehensive income in the year the changes occur, adjusting other comprehensive income when the gains or losses, prior service costs, and net transition assets or obligations are recognized as components of net periodic benefit cost through amortization, and measuring the funded status of a plan as of the date of the statement of financial position, with limited exceptions.

The net costs of the Company’s defined benefit pension plan for the years ended December 31, 2015 and 2014 are as follows:

	Year Ended December 31,
(in thousands)	2015			2014
Interest cost	$	421		$	461
Recognized net actuarial (gain) loss		(925	)		1,930
Net pension and other postretirement benefit cost	$	(504	)	$	2,391

Obligation and Funded Status

The funded status of the Company’s U.S. defined benefit pension plan as of December 31, 2015 and 2014 is as follows:

	December 31,
(in thousands)	2015			2014
Change in Benefit Obligation:
Benefit obligation, beginning of period	$	12,613		$	11,413
Service cost		—			—
Interest cost		421			461
Actuarial loss (gain)		(925	)		1,930
Benefits paid		(1,113	)		(1,191	)
Benefit obligation, end of period	$	10,996		$	12,613

Change in Plan Assets:
Fair value, beginning of period	$	—		$	—
Company contributions		1,113			1,191
Benefits paid		(1,113	)		(1,191	)
Fair value, end of period	$	—		$	—

Unfunded status	$	(10,996	)	$	(12,613	)
Accrued benefit cost	$	(10,996	)	$	(12,613	)

Amounts recognized in the Consolidated Balance Sheets
Current accrued benefit liability	$	(1,093	)	$	(1,173	)
Non-current accrued benefit liability		(9,903	)		(11,440	)
Net amount recognized	$	(10,996	)	$	(12,613	)

The Company had a net actuarial (gain) loss of $(0.9) million and $1.9 million for its U.S. pension plan in the years ended December 31, 2015 and 2014, respectively. These amounts are included in Accumulated Other Comprehensive Loss in the Consolidated Balance Sheets. Of this amount, the Company recognized $0.2 million and $0.1 million as a component of net periodic pension cost during the years ended December 31, 2015 and 2014, respectively, and expects to recognize approximately $0.1 million in 2016.

Plan Assumptions

	Year Ended December 31,
	2015		2014
Discount rate		3.75%		3.50%

The discount rate is determined by analyzing the average returns of high-quality fixed income investments defined as AA-rated or better. The Company also utilizes an interest rate yield curve for instruments with maturities corresponding to the benefit obligations.

Additional Information

For the Company’s U.S. defined benefit pension plan, the projected benefit obligation and accumulated benefit obligation at December 31, 2015 and 2014 were as follows:

	December 31,
(in thousands)	2015		2014
Projected benefit obligation	$	10,996	$	12,613
Accumulated benefit obligation		10,996		12,613

Future Contributions

Total contributions expected to be paid under the Company’s frozen U.S. retirement plans or to the beneficiaries thereof during fiscal 2016 are $1.1 million, consisting of $1.1 million to its U.S. defined benefit plan and $22 thousand to the RBP.

Gross benefit payment obligations under the Company’s continuing plans for the next ten years are anticipated to be as follows:

	U.S. Retirement Plans
(in thousands)	(Pension Plan and RBP)
2016	$	1,115
2017		1,071
2018		1,026
2019		981
2020		977
2021 - 2024		4,098