Pension Plan and 401(k) Program

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Pension Plan and 401(k) Program

Pension Plan and 401(k) Program

Akorn AG Pension Plan

The Company maintains a pension plan for its employees in Switzerland as required by law. The pension plan is funded by contributions by both employees and employers, with the sum of the contributions made by the employer required to be at least equal to the sum of the contributions made by employees. The Company contributes the necessary amounts required by local laws and regulations. Plan assets for the pension plan are held in a retirement trust fund with investments primarily in publicly traded securities and assets.

The purpose of this pension plan is to provide old age pensions. Some of the pension funds also provide benefits in case of disability and to the next of kin in case of premature death. Additionally, the pension funds can be used before retirement to buy a principal residence, to start an independent activity, or when leaving Switzerland permanently. If a participant leaves the company, accumulated pension funds are transferred either into a savings account or into the pension fund of a new employer.

The following table sets forth the components of net periodic cost for our pension plan:

Components of net periodic benefit cost	($ in thousands)				($ in thousands)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Service cost	$	839	$	629	$	1,675	$	1,261
Interest cost	23		61		45		122
Expected return on plan assets	(167)		(174)		(337)		(349)
Amortization of:
Prior service (benefit)	(5)		(5)		$	(10)	(10)
Net actuarial loss	141		48		$	287	97
Participant contributions	(214)		(193)		$	(427)	(387)
Net periodic benefit cost	$	617	$	366	$	1,233	$	734

The Company contributed approximately $1.0 million for the six month period ended June 30, 2020, and expects to contribute a total of approximately $1.7 million to the pension plan in 2020.

Akorn's 401(k) Program

All U.S. full-time Akorn employees are eligible to participate in the Company’s 401(k) plan, the Smart Choice! Akorn Inc. 401(k) Retirement Plan. The Company matches employee contributions to 50% of the first 6% of an employee's eligible compensation.  Company matching contributions vest 50% after two years of credited service and 100% after three years of credited service. During the three month periods ended June 30, 2020 and 2019, plan-related expenses totaled approximately $1.1 million and $0.7 million, respectively. During the six month periods ended June 30, 2020 and 2019, plan-related expenses totaled approximately $1.7 million and $1.5 million, respectively. The Company's matching contribution is funded on a current basis.