Employee Benefit Plans

The Company has a 401(k) retirement savings plan (the “Mohawk Plan”) open to substantially all U.S. and Puerto Rico based employees who have completed 90 days of eligible service. The Company contributes $.50 for every $1.00 of employee contributions up to a maximum of 6% of the employee’s salary based upon each individual participants election. Employee and employer contributions to the Mohawk Plan were $38,632 and $15,994 in 2013, $35,986 and $15,046 in 2012 and $34,595 and $14,541 in 2011, respectively.

The Company also has various pension plans covering employees in Belgium, France, and the Netherlands (the “Non-U.S. Plans”) within the Laminate and Wood segment. Benefits under the Non-U.S. Plans depend on compensation and years of service. The Non-U.S. Plans are funded in accordance with local regulations. The Company uses December 31 as the measurement date for its Non-U.S. Plans.

Components of the net periodic benefit cost of the Non-U.S. Plans are as follows:



	2013			2012		2011
Service cost of benefits earned	$	2,450		1,870		1,708
Interest cost on projected benefit obligation	1,285			1,367		1,400
Expected return on plan assets	(1,094		)	(1,192	)	(1,232	)
Amortization of actuarial loss (gain)	13			(10	)	(26	)
Net pension expense	$	2,654		2,035		1,850

Assumptions used to determine net periodic pension expense for the Non-U.S. Plans:



	2013	2012
Discount rate	3.25%	4.50%
Expected rate of return on plan assets	.0327	2.50%-3.50%
Rate of compensation increase	2.00%-4.00%	2.00%-4.00%
Underlying inflation rate	2.00%	2.00%

The obligations, plan assets and funding status of the Non-U.S. Plans were as follows:



	2013			2012
Change in benefit obligation:
Projected benefit obligation at end of prior year	$	37,551		29,231
Cumulative foreign exchange effect	1,813			669
Service cost	2,450			1,870
Interest cost	1,285			1,367
Plan participants contributions	886			827
Actuarial loss	(2,952		)	5,179
Benefits paid	(1,337		)	(1,552	)
Prior service cost	(7		)	—
Effect of curtailment and settlement	—			(40	)
Projected benefit obligation at end of year	$	39,689		37,551
Change in plan assets:
Fair value of plan assets at end of prior year	$	32,558		26,109
Cumulative foreign exchange effect	1,444			515
Actual return on plan assets	(940		)	4,771
Employer contributions	2,114			1,888
Benefits paid	(1,337		)	(1,552	)
Plan participant contributions	886			827
Fair value of plan assets at end of year	$	34,725		32,558
Funded status of the plans:
Ending funded status	$	(4,964	)	(4,993	)
Net amount recognized in consolidated balance sheets:
Accrued benefit liability (non-current liability)	$	(4,964	)	(4,993	)
Accumulated other comprehensive income	157			928
Net amount recognized	$	(4,807	)	(4,065	)

The Company’s net amount recognized in other comprehensive income related to actuarial gains (losses) was $771, $(1,591) and $(452) for the years ended December 31, 2013, 2012 and 2011, respectively.

Assumptions used to determine the projected benefit obligation for the Non-U.S. Plans were as follows:



	2013	2012
Discount rate	3.50%	3.25%
Rate of compensation increase	2.00%-4.00%	2.00%-4.00%
Underlying inflation rate	2.00%	2.00%

The discount rate assumptions used to account for pension obligations reflect the rates at which the Company believes these obligations will be effectively settled. In developing the discount rate, the Company evaluated input from its actuaries, including estimated timing of obligation payments and yield on investments. The rate of compensation increase for the Non-U.S. Plans is based upon the Company’s annual reviews.



	Non-U.S. Plans
	December 31, 2013		December 31, 2012
Plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligation	$	21,579	15,067
Accumulated benefit obligation	20,302		12,396
Fair value of plan assets	18,934		11,702
Plans with plan assets in excess of accumulated benefit obligations:
Projected benefit obligation	$	18,110	22,484
Accumulated benefit obligation	15,554		20,640
Fair value of plan assets	15,791		20,856

Estimated future benefit payments for the Non-U.S. Plans are as follows:



2014	$	1,013
2015	1,084
2016	1,121
2017	1,669
2018	1,756
Thereafter	10,777

The Company expects to make cash contributions of $2,155 to the Non-U.S. Plans in 2014.

The fair value of the Non-U.S. Plans' investments were estimated using market observable data. Within the hierarchy of fair value measurements, these investments represent Level 2 fair values. The fair value and percentage of each asset category of the total investments held by the plans as of December 31, 2013 and 2012 were as follows:

The Company’s approach to developing its expected long-term rate of return on pension plan assets combines an analysis of historical investment performance by asset class, the Company’s investment guidelines and current and expected economic fundamentals.

Non-U.S. Plans:

Insurance contracts (100%)