Pensions and deferred compensation

12 Months Ended

Dec. 31, 2014

Compensation And Retirement Disclosure [Abstract]

Pensions and deferred compensation

16. Pensions and deferred compensation

Orthofix Inc. sponsors a defined contribution plan (the “Orthofix Inc. 401(k) Plan”) covering substantially all full time US employees. The Orthofix Inc. 401(k) Plan allows for participants to contribute up to 15% of their pre-tax compensation, subject to certain limitations, with the Company matching 100% of the first 2% of the employee’s base compensation and 50% of the next 4% of the employee’s base compensation if contributed to the Orthofix Inc. 401(k) Plan. During the years ended December 31, 2014, 2013 and 2012, expenses incurred relating to 401(k) Plans, including matching contributions, were approximately $1.7 million, $2.4 million and $2.5 million, respectively.

The Company operates defined contribution pension plans for its other International employees not described above meeting minimum service requirements. The Company’s expenses for such pension contributions during each of the years ended 2014, 2013 and 2012 were $0.8 million, $0.7 million and $0.7 million, respectively.

Under Italian Law, Orthofix S.r.l. accrues, on behalf of its employees, deferred compensation, which is paid on termination of employment. Each year’s provision for deferred compensation is based on a percentage of the employee’s current annual remuneration plus an annual charge. Deferred compensation is also accrued for the leaving indemnity payable to agents in case of dismissal, which is regulated by a national contract and is equal to approximately 3.5% of total commissions earned from the Company. Our relations with our Italian employees, who represent 17.6% of our total employees at December 31, 2014, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. We are not a party to any other collective bargaining agreement.

The Orthofix Deferred Compensation Plan (the “Plan”), administered by the Board of Directors of the Company, effective January 1, 2007, and as amended and restated effective January 1, 2009, is a plan intended to allow a select group of key management and highly compensated employees of the Company to defer the receipt of compensation that would otherwise be payable to them. The terms of this plan are intended to comply in all respects with the provisions of Code Section 409A and Code Section 457A. As of January 1, 2011 the Company disallowed further contributions into the plan and any new plan participants. Distributions are made in accordance with the requirements of Code Section 409A.

The Company’s expense for both deferred compensation plans described above during 2014, 2013 and 2012 was approximately $0.1 million, $0.3 million and $0.4 million, respectively. Deferred compensation payments of $0.3 million, $0.1 million, and $0.8 million were made in 2014, 2013, and 2012, respectively. The balance in other long-term liabilities as of December 31, 2014 and 2013 was $1.9 and $2.5 million and represents the amount which would be payable if all the employees and agents had terminated employment at that date.