. Benefit Plans

The

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

PolySwitch Acquisition

During

2016,

as a result of the PolySwitch acquisition, past service l

iabilities were assumed by the Company in mainland China, France, Germany, Japan, Mexico, and Taiwan (China), together with a small amount of plan assets in Taiwan (China).

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.

During

2016,

there were

two

further adjustments to the price of the annuity contract. Their combined effect resulted in a further refund of premium to the company of

$0.3

million. This refund of premium was considered additional actual return on the assets during

2016,

followed by a negative employer contribution of that same amount in the asset reconciliation table below.

Benefit plan related information is as follows

for the years

2017

and

2016:

(in thousands )	2017			2016
Change in benefit obligation:
Benefit obligation at beginning of year	$	55,606		$	50,282
Service cost		2,037			1,509
Interest cost		1,887			1,662
Net actuarial loss (gain)		(433	)		10,190
Benefits paid from the trust		(1,405	)		(2,329	)
Benefits paid directly by the Company		(1,098	)		250
Curtailments and settlements		(31	)		(427	)
Acquisitions		—			2,023
Effect of exchange rate movements		5,477			(7,554	)
Other		5,228			—
Benefit obligation at end of year	$	67,268		$	55,606

Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	42,208		$	44,629
Actual return on plan assets		2,962			6,929
Employer contributions		264			(126	)
Benefits paid		(1,405	)		(2,329	)
Acquisitions		—			24
Effect of exchange rate movements		4,094			(6,919	)
Fair value of plan assets at end of year		48,123			42,208
Net amount recognized/(unfunded status)	$	(19,145	)	$	(13,398	)

Amounts recognized in the Consolidated Balance Sheet

s as of

December 30, 2017

and

December 31, 2016

consist of the following:

(in thousands )	2017			2016
Amounts recognized in the Consolidated Balance Sheet s consist of:
Noncurrent assets	$	78		$	—
Current benefit liability		(481	)		—
Noncurrent benefit liability		(18,742	)		(13,398	)
Net liability recognized	$	(19,145	)	$	(13,398	)

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

as of

December 30, 2017

and

December 31, 2016

consist of:

(in thousands )	2017		2016
Net actuarial loss	$	12,261	$	13,107
Prior service (cost)		—		—
Net amount recognized , pre-tax	$	12,261	$	13,107

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income

(loss) into benefit cost in

2018

approximately

$0.3

million.

The components of pension exp

ense for the years

2017,

2016,

and

2015

are as follows:

							2015
(in thousands )	2017			2016			U.S.			Foreign			Total
Components of net periodic benefit cost:
Service cost	$	2,037		$	1,509		$	750		$	824		$	1,574
Interest cost		1,887			1,662			3,093			1,735			4,828
Expected return on plan assets		(1,990	)		(1,935	)		(2,749	)		(2,346	)		(5,095	)
Amortization of losses		337			306			870			221			1,091
Net periodic benefit cost		2,271			1,542			1,964			434			2,398
Curtailment/Settlement loss (gain)		(25	)		(36	)		29,928			—			29,928
Total expense (income) for the year	$	2,246		$	1,506		$	31,892		$	434		$	32,326

Weighted average assumptions used to determine net periodic

benefit cost for the years

2017,

2016,

and

2015

are as follows:

							2015
	2017			2016			U.S.			Foreign
Discount rate		3.0	%		3.7	%		3.9	%		3.7	%
Expected return on plan assets		4.5	%		4.9	%		6.8	%		5.1	%
Compensation increase rate		4.5	%		5.3	%		—			5.3	%
Measurement dates	12/31/16			1/2/16			12/27/14			12/27/14

The accumulated benefit obligation for the foreign plans

was

$60.5

million and

$51.3

million at

December 30, 2017

and

December 31, 2016,

respectively.

The following table provides a summary of under-funded or unfunded pension benefit plans with projected benefit obligations in excess of plan assets as of

December 30, 2017

and

December 31, 2016:

(in thousands )	2017		2016
Projected benefit obligation	$	28,515	$	48,985
Fair value of plan assets		9,292		42,179

The following table provides a summary of under-funded or unfunded pension benefit plans with accumulated benefit obligations in excess of plan assets as of

December 30, 2017

and

December 31, 2016:

(in thousands )	2017		2016
Accumulated benefit obligation	$	18,990	$	51,306
Fair value of plan assets		6,003		38,912

Weighted average assumptions used to determine benefit obligations

as of

December 30, 2017,

December 31, 2016

and

January 2, 2016

are as follows:

	2017			201 6			201 5
Discount rate		3.1	%		2.6	%		3.8	%
Compensation increase rate		5.0	%		4.5	%		6.2	%
Measurement dates	12/ 30/17			12/31/16			1/ 2/16

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

(in thousands )	Expected Benefit Payments
201 8	$	2,467
201 9		2,474
20 20		2,473
202 1		2,802
202 2		2,776
2023-2027		16,777

The Company expects to make approximately

$1.4

million of contributions to the plans in

2018.

Defined Benefit Plan Assets

Based upon analysis of the target asset allocation and historical retu

rns by type of investment, the Company has assumed that the expected long-term rate of return will be

4.5%

on 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:

	Asset Allocation
	2017			201 6
Equity securities		35	%		32	%
Debt securities		64	%		65	%
Cash and equivalents		1	%		3	%
		100	%		100	%

The Company segregated its plan assets by the following major categories and level for determining their fair value as of

December 30, 2017

and

December 31, 2016.

All plan assets that are valued using the net asset value per share (“NAV”) practical expedient have

not

been included within the fair value hierarchy but are separately disclosed.

Cash and cash equivalents

–

Carrying value approximates fair value. As such these assets were classified as Level

The Company also invests in certain short-term investments which are valued using the amortized cost method and at NAV.

Equity

–

The values of individual equity securities were based on quoted prices in active markets. As such, these assets are classified as Level

Additionally, the Company invests in certain equity funds that are valued at calculated NAV.

Fixed income

– Fixed income securities are typically priced based on a last trade basis and are exchange-traded. Accordingly, the Company classified fixed income securities as Level

The Company also invests in certain fixed income funds which are valued at NAV.

For any Level

plan assets, management reviews significant investments on a periodic basis including investigation of unusual fluctuations in price or returns and obtaining an understanding of the pricing methodology to assess the reliability of

third

-party pricing estimates.

The valuation methodologies described above

may

generate a fair value calculation that

may

not

be indicative of net realizable value or future fair values. While the Company believes the valuation methodologies used are appropriate, the use of different methodologies or assumptions in calculating fair value could result in different amounts. The Company invests in various assets in which valuation is determined by NAV. The Company believes that the NAV is representative of fair value at the reporting date, as there are

significant restrictions on redemption of these investments or other reasons to indicate that the investment would be redeemed at an amount different than the NAV.

e following table presents the Company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of

December 30, 2017:

	Fair Value Measurements Usin g
(in thousands )	Level 1		Level 2		L evel 3		NAV		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	—	$	—	$	7,898	$	7,898
Global Equity 50:50 GBP Hedged Fund		—		—		—		8,134		8,134
Philippine Stock		1,031		—		—		—		1,031
Fix ed income:
Investment Grade Corporate Bond Funds		6,003		—		—		—		6,003
Over 15y Gilts Index Fund		—		—		—		3,684		3,684
Active Corp Bond – Over 10 Yr Fund		—		—		—		6,835		6,835
Over 5y Index-Linked Gilts Fund		—		—		—		12,049		12,049
Philippine Long Gov ernment Securities		1,362		—		—		—		1,362
Philippine Long Corporate Bonds		723		—		—		—		723
Cash and equivalents		173		—		—		231		404
Total pension plan assets	$	9,292	$	—	$	—	$	38,831	$	48,123

e following table presents the Company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of

December 31, 2016:

	Fair Value Measurements Using
(in thousands )	Level 1		Level 2		L evel 3		NAV		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	—	$	—	$	6,321	$	6,321
Global Equity 50:50 GBP Hedged Fund		—		—		—		6,406		6,406
Philippine Stock		906		—		—		—		906
Fixed income:
Investment Grade Corporate Bond Funds		5,372		—		—		—		5,372
Over 15y Gilts Index Fund		—		—		—		3,265		3,265
Active Corp Bond – Over 10 Yr Fund		—		—		—		5,902		5,902
Over 5y Index-Linked Gilts Fund		—		—		—		10,724		10,724
Philippine Long Gov ernment Securities		1,133		—		—		—		1,133
Philippine Long Corporate Bonds		751		—		—		—		751
Cash and equivalents		476		—		—		952		1,428
Total pension plan assets	$	8,638	$	—	$	—	$	33,570	$	42,208

Defined Contribution Plan

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

of the employee’s eligible compensation. The Company

may

provide an additional discretionary match to participants and made discretionary matches of

of the employee’s eligible compensation for each of the years ended

December 30, 2017,

December 31, 2016

and

January 2, 2016.

Employees are immediately vested in their contributions plus actual earnings thereon, as well as the Company contributions. Company matching contributions amounted to

$3.5

million,

$3.2

million, and

$2.8

million in

2017,

2016,

and

2015,

respectively.

Non-qualified Supplemental Retirement and Savings Plan

The C

ompany has a non-qualified Supplemental Retirement and Savings Plan which provides additional retirement benefits for certain management employees and named executive officers by allowing participants to defer a portion of their annual compensation. The Company maintains accounts for participants through which participants make investment elections. The investments are subject to the claims of the Company’s creditors and the Company is responsible for the payment of all benefits under the plan from its general assets. As of

December 30, 2017,

there was

$8.0

million of marketable securities related to the plan included in

Other assets

and

$8.0

million of accrued compensation included in

Other long-term liabilities

. The marketable securities are classified as Level

under the fair value hierarchy as they are maintained in mutual funds with readily determinable fair value. The Company made matching contributions to the plan of

$0.3

million in

2017.