. Benefit Plans

The company previously had a company-sponsored defined benefit pension plan, the Littelfuse Inc. Retirement Plan, which covered certain of its North American employees. The amount of the retirement benefit was based on years of service and final average pay. The plan also provided a temporary supplemental retirement income benefit to help retirees pay the cost of post-retirement medical coverage if the retiree has reached age 62 and has provided at least ten years of service prior to retirement. Such benefits generally cease once the retiree attains age 65. The plan was frozen in 2009 and terminated in 2015 as described below.

The company also has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, Japan, Singapore and the Philippines. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

Littelfuse Inc. Retirement Plan Termination

The company received approval from the IRS on April 14, 2015 on its Application for Determination for Terminating Plan to terminate the U.S. defined benefit pension plan, the Littelfuse Inc. Retirement Plan, effective July 30, 2014. All plan liabilities were settled (either via lump sum payout or purchase of a group annuity contract) in the third quarter of 2015. A cash contribution of $9.1 million was made to the U.S. defined benefit plan’s trust in the third quarter of 2015 to fully fund the plan on a buyout basis, and the eventual settlement of the plan’s liabilities triggered a settlement charge of $30.2 million in the third quarter of 2015. In the fourth quarter of 2015 there was an adjustment to the price of the annuity contract which resulted in a refund of premium to the company of $0.3 million. This refund of premium, effectively a re-measurement gain, was recognized in the fourth quarter of 2015 as a dollar-for-dollar adjustment to the $30.2 million earnings charge recognized in the third quarter of 2015, resulting in a final settlement loss of $29.9 million for the fiscal year ended January 2, 2016.

Total pension expense was $32.4 million, $0.3 million and $0.8 million in 2015, 2014 and 2013, respectively. The increase in pension expense in 2015 primarily resulted from the termination and settlement of the U.S. plan. The decrease in pension expense in 2014 resulted from returns on assets exceeding interest and service costs.

Benefit plan related information is as follows:

	201 5									201 4
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	105,759		$	52,740		$	158,499		$	84,422		$	50,331		$	134,753
Service cost		750			824			1,574			600			925			1,525
Interest cost		3,093			1,735			4,828			3,884			2,060			5,944
Net actuarial loss (gain)		(9,127	)		648			(8,479	)		22,025			5,652			27,677
Benefits paid from the trust		(100,475	)		(1,732	)		(102,207	)		(5,172	)		(2,525	)		(7,697	)
Benefits paid directly by company		—			(410	)		(410	)		—			(155	)		(155	)
Curtailments and settlements		—			(294	)		(294	)		—			—			—
Effect of exchange rate movements		—			(3,229	)		(3,229	)		—			(3,548	)		(3,548	)
Benefit obligation at end of year	$	—		$	50,282		$	50,282		$	105,759		$	52,740		$	158,499

Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	93,991		$	47,593		$	141,584		$	83,748		$	42,477		$	126,225
Actual return on plan assets		(2,375	)		389			(1,986	)		10,416			5,141			15,557
Employer contributions		8,859			1,072			9,931			5,000			5,596			10,596
Benefits paid		(100,475	)		(1,732	)		(102,207	)		(5,173	)		(2,525	)		(7,698	)
Effect of exchange rate movements		—			(2,693	)		(2,693	)		—			(3,096	)		(3,096	)
Fair value of plan assets at end of year		—			44,629			44,629			93,991			47,593			141,584
Net amount recognized/(unfunded status)	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)

Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability	$	—		$	—		$	—		$	(11,768	)	$	—		$	(11,768	)
Accrued benefit liability		—			(5,653	)		(5,653	)		—			(5,147	)		(5,147	)
Total liability recognized	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Accumulated other comprehensive loss	$	—		$	9,383		$	9,383		$	34,801		$	7,671		$	42,472

Amounts recognized in accumulated other comprehensive income (loss), pre-tax consist of:

	20 15						2 014
(In thousands)	U.S.		Foreign		Total		U.S.		Foreign		Total
Net actuarial loss	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472
Prior service (cost)		—		—		—		—		—		—
Net amount recognized /occurring, pre-tax	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income (loss) into benefit cost in 2016 is approximately $0.3 million.

	U.S.									Foreign
(In thousands)	20 15			20 14			20 13			20 15			20 14			20 13
Components of net periodic benefit cost:
Service cost	$	750		$	600		$	600		$	824		$	925		$	744
Interest cost		3,093			3,884			3,565			1,735			2,060			1,376
Expected return on plan assets		(2,749	)		(5,646	)		(5,360	)		(2,346	)		(2,292	)		(1,207	)
Amortization of prior service (credit)		—			—			—			—			—			—
Amortization of losses		870			549			942			221			216			130
Total cost (credit) of the plan for the year		1,964			(613	)		(253	)		434			909			1,043
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit cost (credit)		1,964			(613	)		(253	)		434			909			1,043
Settlement loss		29,928			—			—			—			—			—
Total expense (income) for the year	$	31,892		$	(613	)	$	(253	)	$	434		$	909		$	1,043

Weighted average assumptions used to determine net periodic benefit cost for the years 2015, 2014 and 2013 are as follows:

	U.S.									Foreign
	20 15			20 14			20 13			20 15			20 14			20 13
Discount rate		3.9	%		4.8	%		3.9	%		3.7	%		3.7	%		4.5	%
Expected return on plan assets		6.8	%		6.8	%		6.8	%		5.1	%		4.9	%		4.8	%
Compensation increase rate		—			—			—			5.3	%		3.8	%		3.6	%
Measurement dates	9/30/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

The accumulated benefit obligation for the U.S. defined benefit plan was $0.0 million and $105.8 million at January 2, 2016 and December 27, 2014, respectively. The accumulated benefit obligation for the foreign plans was $46.2 million and $48.9 million at January 2, 2016 and December 27, 2014, respectively.

Weighted average assumptions used to determine benefit obligations at year-end 2015, 2014 and 2013 are as follows:

	U.S.									Foreign
	201 5			201 4			20 13			201 5			201 4			20 13
Discount rate		3.9	%		3.9	%		4.8	%		3.8	%		3.7	%		4.5	%
Compensation increase rate		—			—			—			6.2	%		5.3	%		3.8	%
Measurement dates	12/31/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

Expected benefit payments to be paid to participants for the fiscal year ending are as follows (in thousands):

		Expected
		Benefit
		Payments
Year		(Foreign)
2016		1,964
2017		2,012
2018		2,032
2019		2,065
2020		2,101
2021-2025		11,831

Defined Benefit Plan Assets

Based upon analysis of the target asset allocation and historical returns by type of investment, the company has assumed that the expected long-term rate of return will be 5.1% on foreign plan assets. Assets are invested to maximize long-term return taking into consideration timing of settlement of the retirement liabilities and liquidity needs for benefits payments. Pension plan assets were invested as follows, and were not materially different from the target asset allocation:

	U.S. Asset Allocation					Foreign Asset Allocation
		2015*		2014			2015		2014
Equity securities		0	%	0	%		30	%	30	%
Debt securities		0	%	91	%		65	%	68	%
Cash		0	%	9	%		5	%	2	%
		0	%	100	%		100	%	100	%

* The U.S. pension plan was terminated during the third quarter of 2015 as described above.

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets f or Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	12,801	$	—	$	12,801
Philippine Stock		836		—		—		836
Fixed income:
Investment grade corporate bond funds		6,807		—		—		6,807
Over 15y Gilts Index Fund		—		3,428		—		3,428
Active Corp Bond – Over 10 Yr Fund		—		6,440		—		6,440
Over 5y Index-Linked Gilts Fund		—		10,248		—		10,248
Philippine Long Govt Securities		1,227		—		—		1,227
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		2,061		—		—		2,061
Total pension plan assets	$	11,712	$	32,917	$	—	$	44,629

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 27, 2014 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	13,168	$	—	$	13,168
Philippine Stock		1,069		—		—		1,069
Fixed income:
Long U.S. Credit Corp Index Fund		—		42,911		—		42,911
Long U.S. Govt Bond Index Fund		—		24,116		—		24,116
Intermediate U.S. Govt Bond Index Fund		—		18,884		—		18,884
Investment grade corporate bond funds		8,118		—		—		8,118
Over 15y Gilts Index Fund		—		3,814		—		3,814
Active Corp Bond – Over 10 Yr Fund		—		7,065		—		7,065
Over 5y Index-Linked Gilts Fund		—		11,352		—		11,352
Philippine Long Govt Securities		1,059		—		—		1,059
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		9,247		—		—		9,247
Total pension plan assets	$	20,274	$	121,310	$	—	$	141,584

Defined Contribution Plans

The company also maintains a 401(k) savings plan covering substantially all U.S. employees. The company matches 100% of the employee’s annual contributions for the first 4% of the employee’s eligible compensation. Employees are immediately vested in their contributions plus actual earnings thereon, as well as the company contributions. Company matching contributions amounted to $2.8 million, $2.1 million and $1.7 million in each of the years 2015, 2014 and 2013, respectively.

The company has a non-qualified Supplemental Retirement and Savings Plan. The company will provide additional retirement benefits for certain management employees and named executive officers by allowing participants to contribute up to 90% of their annual compensation with matching contributions of 4% and 5% of the participant’s annual compensation in excess of the IRS compensation limits.

The company previously provided additional retirement benefits for certain key executives through its unfunded defined contribution Supplemental Executive Retirement Plan (“SERP”). The company amended the SERP during 2009 to freeze contributions and set the annual interest rate credited to the accounts until distributed at the five-year Treasury constant maturity rate. The charge to expense for the SERP plan amounted to $0.1 million in 2015 and less than $0.1 million in each of 2014 and 2013.