Defined Benefit Plans

Maxwell SA Pension Plan

Maxwell SA has a retirement plan that is classified as a defined benefit pension plan. The employee pension benefit is based on compensation, length of service and credited investment earnings. The plan guarantees both a minimum rate of return as well as minimum annuity purchase rates. The Company’s funding policy with respect to the pension plan is to contribute the amount required by Swiss law, using the required percentage applied to the employee’s compensation. In addition, participating employees are required to contribute to the pension plan. This plan has a measurement date of December 31.

Components of net pension cost are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Service cost	$	309		$	245		$	630		$	486
Cost recognized as a component of compensation cost	309			245			630			486
Interest cost	58			57			118			114
Expected return on plan assets	(322		)	(252		)	(656		)	(499		)
Prior service cost amortization	24			39			48			75
Net cost recognized in other components of defined benefit plans, net	(240		)	(156		)	(490		)	(310		)
Net pension cost	$	69		$	89		$	140		$	176

Employer contributions of $149,000 and $150,000 were paid during the three months ended June 30, 2018 and 2017, respectively. Employer contributions of $308,000 and $305,000 were paid during the six months ended June 30, 2018 and 2017, respectively. Additional employer contributions of approximately $247,000 are expected to be paid during the remainder of fiscal 2018.

Korea Defined Benefit Plan

In connection with the Nesscap Acquisition, the Company assumed the defined benefit plan liability related to Nesscap Korea’s employees. Pursuant to the Labor Standards Act of Korea, employees and most executive officers with one or more years of service are entitled to lump sum separation benefits upon the termination of their employment based on their length of service and rate of pay.

Components of net cost related to the Korea employee defined benefit plan are as follows (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Service cost	$	150	$	88	$	301	$	88
Cost recognized as a component of compensation cost	150		88		301		88
Interest cost	29		13		58		13
Cost recognized in other components of defined benefit plans, net	29		13		58		13
Net cost	$	179	$	101	$	359	$	101

Employer contributions of $2,000 and $1,000 were paid during the three months ended June 30, 2018 and 2017, respectively. Employer contributions of $4,000 and $1,000 were paid during the six months ended June 30, 2018 and 2017, respectively. Additional employer contributions of approximately $3,000 are expected to be paid during the remainder of fiscal 2018.