Employee Benefit Plans

Defined Benefit Plan:

The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plan as well as the components of net periodic benefit costs, including key assumptions (in thousands). The measurement dates for plan assets and obligations were December 31, 2016 and 2015.



	December 31,
	2016			2015
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year	$	49,715		$	50,218
Service cost	1,277			1,252
Interest cost	2,078			1,899
Actuarial loss (gain) ⁽¹⁾	1,976			(1,830		)
Benefit payments	(2,071		)	(1,824		)
Benefit obligation at end of year	$	52,975		$	49,715
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	42,341		$	42,606
Actual return on plan assets	3,228			59
Employer contributions	2,000			1,500
Benefit payments	(2,071		)	(1,824		)
Fair value of plan assets at end of year	$	45,498		$	42,341
Unfunded status at end of year (included in accounts payable and accrued expenses in 2016 and 2015)	$	(7,477	)	$	(7,374	)
Accumulated benefit obligation	$	52,824		$	49,632
Net loss recognized in accumulated other comprehensive loss	$	16,528		$	16,361

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(1)	The year over year change in actuarial loss (gain) is associated primarily to census updates and a decrease in the discount rate in 2016.

The following is the required information for other changes in plan assets and benefit obligation recognized in other comprehensive loss (income) (in thousands):



	Year Ended December 31,
	2016			2015			2014
Net loss	$	1,719		$	1,276		$	11,118
Amortization of net loss ⁽¹⁾	(1,552		)	(1,423		)	(385		)
Total recognized in other comprehensive loss (income)	$	167		$	(147	)	$	10,733
Total recognized in net periodic benefit costs and other comprehensive loss	$	2,103		$	1,262		$	10,967

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(1)	The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $1.5 million.

The following is the required information with an accumulated benefit obligation in excess of plan assets (in thousands):



	December 31,
	2016		2015
Projected benefit obligation	$	52,975	$	49,715
Accumulated benefit obligation	52,824		49,632
Fair value of plan assets	45,498		42,341

The components of net periodic benefit cost are as follows (in thousands):



	Year Ended December 31,
	2016			2015			2014
Service cost	$	1,277		$	1,252		$	1,008
Interest cost	2,078			1,899			1,800
Expected return on plan assets	(2,971		)	(3,165		)	(2,959		)
Recognized loss	1,552			1,423			385
Total	$	1,936		$	1,409		$	234

The assumptions used to develop periodic expense are shown below:



	Year Ended December 31,
	2016		2015		2014
Discount rate	4.11	%	3.83	%	4.70	%
Salary scale increases	3.50	%	3.50	%	3.50	%
Long-term rate of return on assets	7.00	%	7.50	%	7.50	%

The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 7.00% as the long-term rate of return assumption for 2016.

The assumptions used to develop the actuarial present value of the benefit obligation are shown below:



	Year Ended December 31,
	2016		2015		2014
Discount rate	4.01	%	4.11	%	3.83	%
Salary scale increases	3.50	%	3.50	%	3.50	%

The expected contribution to be paid for the Retirement Plan by us during 2017 is approximately $2.0 million. The expected benefit payments for the next 10 years for the Retirement Plan is as follows (in thousands):



2017	$	2,139
2018	2,154
2019	2,268
2020	2,290
2021	2,480
2022-2026	14,477

The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2016, and no significant changes have occurred through December 31, 2016.

At December 31, 2016, our investment asset allocation compared to our benchmarking allocation model for our plan assets was as follows:



	Portfolio		Benchmark
Cash and Short-Term Investments	2	%	1	%
U.S. Stocks	51	%	56	%
International Stocks	12	%	10	%
U.S. Bonds	29	%	29	%
International Bonds	5	%	4	%
Other	1	%	—	%
Total	100	%	100	%

The fair value of plan assets was determined based on publicly quoted market prices for identical assets, which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows:



	December 31,
	2016		2015
Cash and Short-Term Investments	18	%	19	%
Large Company Funds	36	%	35	%
Mid Company Funds	6	%	7	%
Small Company Funds	6	%	6	%
International Funds	10	%	10	%
Fixed Income Funds	16	%	14	%
Growth Funds	8	%	9	%
Total	100	%	100	%

Concentrations of risk within our equity portfolio are investments classified within the following sectors: technology, financial services, consumer cyclical goods, healthcare and industrial, which represents approximately 21%, 17%, 15%, 15% and 9% of total equity investments, respectively.

Defined Contribution Plans:

Compensation expense related to our defined contribution plans was $3.5 million in 2016, $3.7 million in 2015 and $3.2 million in 2014.