NON-U.S. EMPLOYEE DEFINED BENEFIT PLANS

In connection with the Merger, the Company assumed GENBAND's defined benefit retirement plans that cover some employees at various international locations. The Company has also adopted GENBAND's policy to contribute amounts at least sufficient to satisfy the minimum amount required by applicable law and regulations, or to directly pay benefits where appropriate. Benefits under the defined benefit plans are typically based either on years of service and the employee's compensation (generally during a fixed number of years immediately before retirement) or on annual credits. The range of assumptions that are used for the non-U.S. defined benefit plans reflect the different economic environments within the various countries.

A reconciliation of the changes in the benefit obligations and fair value of the assets of the defined benefit plans for the period from the Merger Date to December 31, 2017, the funded status of the plans and the amounts recognized in the consolidated balance sheet as of December 31, 2017 are as follows (in thousands):



Changes in projected benefit obligations:
Projected benefit obligation at Merger Date	$	10,515
Service cost	68
Interest cost	25
Participant contributions	5
Benefits paid	(3		)
Net actuarial loss on obligation	562
Currency loss	312
Projected benefit obligation at December 31, 2017	$	11,484

Changes in plan assets:
Fair value of plan assets at Merger Date	$	3,776
Actual return on plan assets	(8		)
Employer contributions	22
Participant contributions	5
Additional charges	(4		)
Benefits paid	(3		)
Currency gain	105
Fair value of plan assets at December 31, 2017	$	3,893

Funded status at December 31, 2017	$	(7,591	)

Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss	$	578

Amounts recognized in the consolidated balance sheet consist of:
Accrued compensation and benefits (current pension liability)	$	(67	)
Other long-term liabilities (non-current pension liability)	(7,524		)
Net amount recognized	$	(7,591	)

Plans with underfunded or non-funded accumulated benefit obligations at December 31, 2017 are as follows (in thousands):



Aggregate projected benefit obligation	$	11,484
Aggregate accumulated benefit obligation	$	7,793
Aggregate fair value of plan assets	$	3,893

Net periodic benefit costs for the period from the Merger Date to December 31, 2017 are as follows (in thousands):



Service cost	$	68
Interest cost	25
Expected return on plan assets	(8		)
Additional charges	4
Net periodic benefit costs	$	89

The Company made benefit payments of $3,000 for the period from the Merger Date to December 31, 2017. Expected benefit payments for the next ten years are as follows:



Years ending December 31,
2018	$	67
2019	68
2020	49
2021	50
2022	50
2023 to 2027	847
	$	1,131

The change in plan assets and benefit obligations recognized in other comprehensive loss before tax for the period from the Merger Date to December 31, 2017 was as follows (in thousands):



Net loss	$	578

The Company defers all actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions. The unrecognized actuarial gains and losses are recorded as unrealized pension actuarial gains (losses) in accumulated other comprehensive loss. These unrecognized gains and losses are amortized as a component of net periodic benefit cost when the net gains and losses exceed 10% of the greater of the market value of plan assets or the projected benefit obligation at the beginning of the year. No amortization of accumulated other comprehensive loss, net, into net periodic benefit cost is expected for the year ended December 31, 2018.

The principal weighted average assumptions used to determine the benefit obligation at December 31, 2017 are as follows:



Discount rate	1.31	%
Rate of compensation increase	3.38	%

The principal weighted average assumptions used to determine net period benefit cost for the period from the Merger Date to December 31, 2017 are as follows:



Discount rate	1.49	%
Expected long-term return on plan assets	1.23	%
Rate of compensation increase	3.38	%

Assumed discount rates are used in the measurement of the projected, accumulated and vested benefit obligations and the service and interest components of net periodic pension cost. Estimated discount rates reflect the rates at which the pension benefits could be effectively settled. The Company determines the discount rates of the plans in the Euro zone using the iBoxx Euro Corporate AA Bond indices with appropriate adjustments for the duration of the plan obligations. In other international locations, the Company determines the discount rates based primarily on local AA to AAA rated Corporate Bond Indices and the Citigroup Pension Discount Curve with the duration appropriate to the duration of the plan obligations.

The plans in the Netherlands and Switzerland are funded through insurance contracts, which provide guaranteed interest credit. The fair value of the contract is derived from the insurance company's assessment of the minimum value of the benefits provided by the insurance contract. The methodology used to value the plan assets assumes that the value of the plan assets equals the guaranteed insured benefits. For consistency, the same discount rate used in the valuation of the benefit obligations is used to place a value on the plan assets. The assets are assumed to grow each year in line with the discount rate, and therefore, the expected return on the assets is set equal to the discount rate. The fair value of the combined plan assets was $3.9 million at December 31, 2017. The Company classifies the fair value of these plan assets as Level 2 in the fair value hierarchy as discussed in Note 5.

During the period from the Merger Date to December 31, 2017, employees in the Netherlands and Switzerland made contributions to the respective pension plans aggregating $5,000. Employee contributions to these plans are based on a fixed 5% of the relevant pensionable earnings. The Company funds these plans by contributing at least the minimum amount required by applicable regulations and as recommended by an independent actuary. During the period from October 27, 2017 to December 31, 2017, the Company contributed $22,000 to its pension plans and expects to contribute approximately $0.2 million to its pension plans in 2018.