We have a defined benefit pension plan covering certain active and former employees in the United States (“U.S.”). Benefits under the plan were frozen at various times in the past. The measurement date used for the accounting valuation of the defined benefit pension plan was December 29, 2019. Information about the U.S. defined benefit pension plan is as follows for the periods indicated:



	Year Ended
(In thousands)	December 29, 2019			December 30, 2018			December 31, 2017
Components of net periodic benefit cost:
Service cost	$	548		$	670		$	811
Interest cost	3,423			3,322			3,421
Expected return on assets	(5,723		)	(6,253		)	(5,852		)
Amortization of actuarial net losses	1,521			1,149			1,113
Settlement loss	5,651			—			—
Net pension expense (benefit)	$	5,420		$	(1,112	)	$	(507	)

During the fourth quarter of 2019, the plan purchased annuity contracts to settle liabilities for certain fully vested participants associated with benefits arising under the plan. Payments related to this offer were made from existing plan assets to settle the liabilities. As a result, total lump sum payments exceeded annual service and interest costs in 2019, and we recognized a pre-tax pension settlement charge of $5.7 million in the fourth quarter of 2019. This non-cash charge is recorded within other expense (income), net in the consolidated statements of comprehensive income.

Information with respect to the assets, liabilities and net accrued benefit obligation of the U.S. defined benefit pension plan is set forth as follows for the periods indicated:



	Year Ended
(In thousands)	December 29, 2019			December 30, 2018
Pension assets:
Fair value of plan assets, beginning of year	$	86,992		$	92,716
Company contributions	5,000			5,000
Actual return on plan assets	17,030			(4,453		)
Plan settlements	(23,556		)	—
Benefits paid	(5,560		)	(5,730		)
Administrative expenses paid	(484		)	(541		)
Fair value of plan assets, end of year	79,422			86,992
Pension liability:
Accrued benefit obligation, beginning of year	95,171			104,909
Current service cost	548			670
Interest cost	3,423			3,322
Plan settlements	(23,556		)	—
Actuarial loss (gain)	9,015			(7,459		)
Benefits paid	(5,560		)	(5,730		)
Administrative expenses paid	(484		)	(541		)
Accrued benefit obligation, end of year	78,557			95,171
Net plan assets (accrued benefit obligation), end of year	$	865		$	(8,179	)

The net plan assets are carried within other assets in the consolidated balance sheets. Pension fund assets are invested primarily in equity and debt securities. Asset allocation between equity and debt securities and cash is adjusted based on the expected life of the plan and the expected retirement age of the plan participants. No plan assets are expected to be returned to us in the next twelve months. Information with respect to the amounts and types of securities that are held in the U.S. defined benefit pension plan is set forth as follows for the periods indicated:



	Year Ended
	December 29, 2019				December 30, 2018
(In thousands)	Amount		% of Total Plan		Amount		% of Total Plan
Equity securities	$	47,017	59.2	%	$	51,412	59.1	%
Debt securities	29,863		37.6	%	32,361		37.2	%
Other	2,542		3.2	%	3,219		3.7	%
	$	79,422	100.0	%	$	86,992	100.0	%

Under the Plan's investment policy statement, plan assets are invested to achieve a fully-funded status based on actuarial calculations, maintain a level of liquidity that is sufficient to pay benefit and expense obligations when due, maintain flexibility in determining the future level of contributions and maximize returns within the limits of risk. The target asset allocation for plan assets in the U.S. defined benefit pension plan for 2019 is 60% equity securities, 38% debt securities and 2% of other securities. Our pension funds are not invested directly in the debt or equity of Masonite, but may have been invested indirectly as a result of inclusion of Masonite in certain market or investment funds.

The weighted average actuarial assumptions adopted in measuring our U.S. accrued benefit obligations and costs were as follows for the periods indicated:



	Year Ended
	December 29, 2019		December 30, 2018		December 31, 2017
Discount rate applied for:
Accrued benefit obligation	3.3	%	4.3	%	3.6	%
Net periodic pension cost	4.3	%	3.6	%	4.2	%
Expected long-term rate of return on plan assets	6.8	%	6.8	%	7.0	%

The rate of compensation increase for the accrued benefit obligation and net periodic pension costs for the U.S. defined benefit pension plan is not applicable, as benefits under the plan are not affected by compensation increases.

The expected long-term rate of return on plan assets assumption is derived by taking into consideration the target plan asset allocation, historical rates of return on those assets, projected future asset class returns and net outperformance of the market by active investment managers. An asset return model is used to develop an expected range of returns on the plan investments over a 30-year period, with the expected rate of return selected from a best estimate range within the total range of projected results.

We also have a defined benefit pension plan in the United Kingdom (“U.K.”), which has been curtailed in prior years. The measurement date used for the accounting valuation of the U.K. defined benefit pension plan was December 29, 2019. Information about the U.K. defined benefit pension plan is as follows for the periods indicated:



	Year Ended
(in thousands)	December 29, 2019			December 30, 2018			December 31, 2017
Components of net periodic benefit cost:
Interest cost	$	685		$	648		$	685
Expected return on assets	(948		)	(990		)	(429		)
Amortization of actuarial net losses	246			142			—
Net pension expense (benefit)	$	(17	)	$	(200	)	$	256

Information with respect to the assets, liabilities and net accrued benefit obligation of the U.K. defined benefit pension plan is as follows for the periods indicated:



	Year Ended
(In thousands)	December 29, 2019			December 30, 2018
Pension assets:
Fair value of plan assets, beginning of year	$	22,307		$	25,141
Company contributions	1,265			661
Actual return on plan assets	3,201			(1,106		)
Benefits paid	(863		)	(886		)
Translation adjustment	838			(1,503		)
Fair value of plan assets, end of year	26,748			22,307
Pension liability
Accrued benefit obligation, beginning of year	28,303			30,812
Interest cost	685			648
Actuarial loss (gain)	3,446			(962		)
Benefits paid	(863		)	(886		)
Plan amendment	—			585
Translation adjustment	1,030			(1,894		)
Accrued benefit obligation, end of year	32,601			28,303
Net accrued benefit obligation, end of year	$	5,853		$	5,996

The net accrued benefit obligation is recorded within other long-term liabilities in the consolidated balance sheets. Pension fund assets are invested primarily in equity and debt securities. Asset allocation between equity and debt securities and cash is adjusted based on the expected life of the plan and the expected retirement age of the plan participants. Information with respect to the amounts and types of securities that are held in the U.K. defined benefit pension plan is set forth as follows for the periods indicated:



	Year Ended
	December 29, 2019				December 30, 2018
(In thousands)	Amount		% of Total Plan		Amount		% of Total Plan
Equity securities	$	10,297	38.5	%	$	10,207	45.8	%
Debt securities	13,600		50.8	%	11,909		53.3	%
Other	2,851		10.7	%	191		0.9	%
	$	26,748	100.0	%	$	22,307	100.0	%

Under the Plan's investment policy and strategy, plan assets are invested to achieve a fully funded status based on actuarial calculations, maintain a level of liquidity that is sufficient to pay benefit and expense obligations when due, maintain flexibility in determining the future level of contributions and maximize returns within the limits of risk. The target asset allocation for plan assets in the U.K. defined benefit pension plan for 2019 is 50% equity securities and 50% debt securities.

The weighted average actuarial assumptions adopted in measuring our U.K. accrued benefit obligations and costs were as follows for the periods indicated:



	Year Ended
	December 29, 2019		December 30, 2018		December 31, 2017
Discount rate applied for:
Accrued benefit obligation	1.9	%	2.7	%	2.4	%
Net periodic pension cost	1.7	%	2.4	%	2.2	%
Expected long-term rate of return on plan assets	3.9	%	4.2	%	4.0	%

The rate of compensation increase for the accrued benefit obligation and net pension cost for the U.K. defined benefit pension plan is not applicable, as the plan was curtailed in prior years and benefits under the plan are not affected by compensation increases.

The expected long-term rate of return on plan assets assumption is derived by taking into consideration the target plan asset allocation, historical rates of return on those assets, projected future asset class returns and net outperformance of the market by active investment managers. An asset return model is used to develop an expected range of returns on the plan investments over a 9-year period, with the expected rate of return selected from a best estimate range within the total range of projected results.

For all periods presented, the U.S. and U.K. defined benefit pension plans were invested in equity securities, equity funds, bonds, bond funds and cash and cash equivalents. Other than those recorded at net asset value per share (NAV) as described below, all investments are publicly traded and possess a high level of marketability or liquidity. All plan investments are categorized as having Level 1 valuation inputs as established by the FASB’s Fair Value Framework.

As of December 29, 2019, the U.S. defined benefit pension plan held an investment valued at NAV representing $8.0 million of total plan assets. The investment is a collective investment trust consisting primarily of publicly traded U.S. and non-U.S. equities. Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded. Redemptions can be made daily with redemptions greater than $0.2 million requiring a five day redemption notice period. There were no unfunded commitments as of December 29, 2019.

The change in the net difference between the pension plan assets and projected benefit obligation that is not attributed to our recognition of pension expense or funding of the plan is recognized in other comprehensive income (loss) within the consolidated statements of comprehensive income and the balance of such changes is included in accumulated other comprehensive loss (“AOCL”) in the consolidated balance sheets. The estimated actuarial net losses that will be amortized from AOCL into net periodic benefit cost during 2020 are $1.0 million.

As of December 29, 2019, the estimated future benefit payments from the U.S. and U.K. defined benefit pension plans for the following future periods are set forth as follows:



(In thousands)	Expected Future Benefit Payments
Fiscal year:
2020	$	5,356
2021	5,632
2022	5,753
2023	5,867
2024	5,975
2025 through 2029	30,620
Total estimated future benefit payments	$	59,203

We have defined contribution benefit plans covering certain U.S. and foreign subsidiary employees subject to eligibility requirements set up in accordance with local statutory requirements. Contributions made to these plans were $12.4 million, $11.8 million and $7.8 million for the years ended December 29, 2019, December 30, 2018, and December 31, 2017, respectively.