Employee Benefit Plans

We sponsor an employee savings plan (“401(k) plan”) covering substantially all of our United States based employees. We also sponsor a defined benefit pension plan (the “pension plan”) that was frozen in 2009. It covered substantially all our United States based employees at the time it was frozen.

Total employer contributions to the 401(k) plan were $7.5 million, $7.1 million and $7.6 million during the years ended December 31, 2017, 2016 and 2015, respectively.

We use a December 31, measurement date for our pension plan. Beginning in 2016, cumulative gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of assets are amortized on a straight-line basis over the lesser of the expected average remaining life expectancy of the plan's participants or 12 years. For each subsequent year after 2016, the limit of 12 years is adjusted to reflect the percentage change in the average remaining service period for the plan's active membership.

The following table provides a reconciliation of the projected benefit obligation, plan assets and funded status of the pension plan at December 31:



	2017			2016
Accumulated benefit obligation	$	87,765		$	82,005

Change in benefit obligation
Projected benefit obligation at beginning of year	$	82,005		$	78,437
Service cost	603			452
Interest cost	2,773			2,878
Actuarial loss	6,556			4,844
Benefits paid	(1,976		)	(1,814		)
Settlement	(2,196		)	(2,792		)
Projected benefit obligation at end of year	$	87,765		$	82,005

Change in plan assets
Fair value of plan assets at beginning of year	$	69,061		$	67,168
Actual gain on plan assets	10,043			6,499
Benefits paid	(1,976		)	(1,814		)
Settlement	(2,196		)	(2,792		)
Fair value of plan assets at end of year	$	74,932		$	69,061

Funded status	$	(12,833	)	$	(12,944	)

Amounts recognized in the consolidated balance sheets consist of the following at December 31,:



	2017			2016
Other long-term liabilities	$	(12,833	)	$	(12,944	)
Accumulated other comprehensive loss	(40,937		)	(41,960		)

The following actuarial assumptions were used to determine our accumulated and projected benefit obligations as of December 31,:



	2017		2016
Discount rate	3.69	%	4.28	%

Accumulated other comprehensive loss for the years ended December 31, 2017 and 2016 consists of net actuarial losses of $40,937 and $41,960, respectively, not yet recognized in net periodic pension cost (before income taxes).

Other changes in plan assets and benefit obligations recognized in other comprehensive income in 2017 are as follows:



Current year actuarial loss	$	(1,812	)
Amortization of actuarial loss	2,835
Total recognized in other comprehensive loss	$	1,023

The estimated portion of net actuarial loss in accumulated other comprehensive loss that is expected to be recognized as a component of net periodic pension cost in 2018 is $2.7 million.

Net periodic pension cost for the years ended December 31, consists of the following:



	2017			2016			2015
Service cost	$	603		$	452		$	240
Interest cost on projected benefit obligation	2,773			2,878			3,394
Expected return on plan assets	(5,300		)	(5,189		)	(5,697		)
Amortization of loss	2,835			2,780			3,233
Net periodic pension cost	$	911		$	921		$	1,170

The following actuarial assumptions were used to determine our net periodic pension benefit cost for the years ended December 31,:



	2017		2016		2015
Discount rate on benefit obligation	4.28	%	4.54	%	3.81	%
Effective rate for interest on benefit obligation	3.49	%	3.77	%	3.81	%
Expected return on plan assets	8.00	%	8.00	%	8.00	%

In 2016, we changed the method we used to estimate the interest cost component of net periodic pension cost. Historically, we estimated the interest cost component using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to use a full yield curve approach in the estimation of this component of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation that correlate to the relevant projected cash flows ("spot rate approach"). This change provides a more precise measurement of interest cost. This change did not affect the measurement of our total benefit obligation. We accounted for this change as a change in estimate and therefore accounted for it prospectively in 2016.

In determining the expected return on pension plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, we consult with financial and investment management professionals in developing appropriate targeted rates of return.

Asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk and providing adequate liquidity to meet immediate and future benefit payment requirements.

The allocation of pension plan assets by category is as follows at December 31,:



	Percentage of Pension Plan Assets				Target Allocation
	2017		2016		2018
Equity securities	87	%	86	%	75	%
Debt securities	13		14		25
Total	100	%	100	%	100	%

As of December 31, 2017, the pension plan held 27,562 shares of our common stock, which had a fair value of $1.4 million. We believe that our long-term asset allocation on average will approximate the targeted allocation. We regularly review our actual asset allocation and periodically rebalance the pension plan’s investments to our targeted allocation when deemed appropriate.

FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements as described in Note 14. Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2017 and 2016:



Common Stock:	Common stock is valued at the closing price reported on the common stock’s respective stock exchange and is classified within level 1 of the valuation hierarchy.

Money Market Fund:	These investments are public investment vehicles valued using $1 for the Net Asset Value (NAV). The money market fund is classified within level 2 of the valuation hierarchy.

Mutual Funds:	These investments are public investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and is classified within level 1 of the valuation hierarchy.

Fixed Income Securities:	Valued at the closing price reported on the active market on which the individual securities are traded and are classified within level 1 of the valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the pension plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the pension plan's assets at fair value as of December 31, 2017 and December 31, 2016:



December 31, 2017	Level 1		Level 2		Total
Common Stock	$	36,643	$	—	$	36,643
Money Market Fund	—		1,517		1,517
Mutual Funds	28,798		—		28,798
Fixed Income Securities	7,974		—		7,974
	$	73,415	$	1,517	$	74,932



December 31, 2016	Level 1		Level 2		Total
Common Stock	$	34,856	$	—	$	34,856
Money Market Fund	—		1,710		1,710
Mutual Funds	24,626		—		24,626
Fixed Income Securities	7,869		—		7,869
	$	67,351	$	1,710	$	69,061

We do not expect to make any contributions to our pension plan for 2018.

The following table summarizes the benefits and settlements expected to be paid by our pension plan in each of the next five years and in aggregate for the following five years. The expected payments are estimated based on the same assumptions used to measure the Company’s projected benefit obligation at December 31, 2017 and reflect the impact of expected future employee service.



2018		$4,715
2019	5,539
2020	5,593
2021	4,974
2022	5,250
2023-2027	25,696