EMPLOYEE BENEFITS

Defined contribution plan. The Company has savings and investment plans (the “401k Plans”) covering substantially all U.S. employees. Company contributions are based on the level of employee contributions, up to a maximum of 4% of an employee’s eligible salary, subject to an annual maximum. For 2018, the maximum match was $7,200. Amounts expensed in connection with the 401k Plans totaled $36.7 million, $29.8 million and $22.9 million in 2018, 2017 and 2016, respectively.

Deferred compensation plan. The Company has supplemental deferred compensation plans for the benefit of certain highly compensated officers, managers and other key employees. The plans' investment assets are recorded in Other assets on the Consolidated Balance Sheets at fair value. The value of these assets was $66.6 million and $88.1 million at December 31, 2018 and 2017, respectively (see Note 12 — Fair Value Disclosures for fair value information). The corresponding deferred compensation plan liability, which was $68.6 million and $89.9 million at December 31, 2018 and 2017, respectively, is carried at fair value, and is adjusted with a corresponding charge or credit to compensation expense to reflect the fair value of the amount owed to the employees and is classified in Other liabilities on the Consolidated Balance Sheets. Compensation expense recognized for all deferred compensation plans was $1.7 million, $0.4 million and $0.1 million in 2018, 2017 and 2016, respectively.

Defined benefit pension plans. The Company has defined benefit pension plans in several of its international locations. Benefits paid under these plans are based on years of service and level of employee compensation. The Company's defined benefit pension plans are accounted for in accordance with FASB ASC Topics 715 and 960. The following are the components of defined benefit pension plan expense for the years ended December 31 (in thousands):



	2018			2017			2016
Service cost	$	3,145		$	2,820		$	2,780
Interest cost	840			765			850
Expected return on plan assets	(475		)	(360		)	(375		)
Recognition of actuarial loss	340			350			200
Total defined benefit pension plan expense	$	3,850		$	3,575		$	3,455

The following are the key assumptions used in the computation of pension expense for the years ended December 31:



	2018		2017		2016
Weighted average discount rate (1)	1.81	%	1.78	%	1.78	%
Average compensation increase	2.58	%	2.66	%	2.67	%


(1)	Discount rates are typically determined by utilizing the yields on long-term corporate or government bonds in the relevant country with a duration consistent with the expected term of the underlying pension obligations.

The following table provides information related to changes in the projected benefit obligation for the years ended December 31 (in thousands):



	2018			2017			2016
Projected benefit obligation at beginning of year	$	45,450		$	38,400		$	35,870
Service cost	3,145			2,820			2,780
Interest cost	840			765			850
Actuarial loss (gain) due to assumption changes and plan experience	(430		)	690			1,480
Additions and contractual termination benefits	(950		)	(860		)	—
Benefits paid (1)	(1,400		)	(920		)	(1,640		)
Foreign currency impact	(1,765		)	4,555			(940		)
Projected benefit obligation at end of year (2)	$	44,890		$	45,450		$	38,400


(1)	The Company projects the following benefit payments will be made in future years directly to plan participants: $1.2 million in 2019; $1.5 million in 2020; $1.6 million in 2021; $1.7 million in 2022; $2.1 million in 2023; and $12.1 million in total in the five years thereafter.


(2)	Measured as of December 31.

The following table provides information regarding the funded status of the plans and related amounts recorded in the Company’s Consolidated Balance Sheets as of December 31 (in thousands):



Funded status of the plans:	2018			2017			2016
Projected benefit obligation	$	44,890		$	45,450		$	38,400
Pension plan assets at fair value (1)	(19,460		)	(18,475		)	(14,465		)
Funded status – shortfall (2)	$	25,430		$	26,975		$	23,935



Amounts recorded in the Consolidated Balance Sheets for the plans:
Other liabilities — accrued pension obligation (2)	$	25,430		$	26,975		$	23,935
Stockholders’ equity — deferred actuarial loss (3)	$	(5,738	)	$	(5,861	)	$	(5,797	)

(1)

The pension plan assets are held by third-party trustees and are invested in a diversified portfolio of equities, high quality government and corporate bonds, and other investments. The assets are primarily valued based on Level 1 and Level 2 inputs under the fair value hierarchy in FASB ASC Topic 820, with the majority of the invested assets considered to be of low-to-medium investment risk. The Company projects a future long-term rate of return on these plan assets of 2.45%, which it believes is reasonable based on the composition of the assets and both current and projected market conditions. For the year ended December 31, 2018, the Company contributed $3.0 million to these plans, and benefits paid directly by the Company to participants were $1.4 million.


(2)	The Funded status - shortfall represents the amount of the projected benefit obligation that the Company has not funded with a third-party trustee. This amount is a liability of the Company and is recorded in Other liabilities on the Company’s Consolidated Balance Sheets.

(3)

The deferred actuarial loss as of December 31, 2018 is recorded in AOCI/L and will be reclassified out of AOCI/L and recognized as pension expense over approximately 13 years, subject to certain limitations set forth in FASB ASC Topic 715. The impact of this amortization on pension expense in 2019 is projected to result in approximately $0.2 million of additional expense. The amortization of deferred actuarial losses from AOCI/L to pension expense in each of the three years ended December 31, 2018 was immaterial.

The Company also maintains a reinsurance asset arrangement with a large international insurance company whose purpose is to provide funding for benefit payments for one of its plans. The reinsurance asset is not a pension plan asset but is an asset of the Company. At December 31, 2018 and 2017, the reinsurance asset was recorded at its cash surrender value of $9.0 million and $9.1 million, respectively, and classified in Other assets on the Company's Consolidated Balance Sheets. The Company believes that the cash surrender value approximates fair value and is equivalent to a Level 2 input under the FASB’s fair value hierarchy in FASB ASC Topic 820.