(11) DEFINED BENEFIT PENSION PLANS

The Company sponsors two defined benefit pension plans covering certain of its employees in its Netherlands facility, one defined benefit pension plan covering certain of its employees in its Taiwan facility and one unfunded defined benefit pension plan covering certain of its employees in Japan. Pension costs are actuarially determined.

The aggregate change in benefit obligation and plan assets related to these plans was as follows:


	July 31,
	2014			2013
	(In thousands)
Change in benefit obligation
Benefit obligation at beginning of year	$	20,095		$	17,159
Service cost		521			644
Interest cost		743			728
Actuarial (gain) loss		5,291			2,564
Employee contributions		182			296
Amendments		(187	)		—
Benefits and administrative expenses paid		(445	)		(260	)
Adjustments		310			—
Effect of curtailment		(371	)		(2,258	)
Currency translation		187			1,222

Benefit obligation at end of year		26,326			20,095

Change in plan assets
Fair value of plan assets at beginning of year		16,498			14,151
Actual return on plan assets		5,316			172
Employee contributions		175			296
Employer contributions		844			1,079
Benefits and administrative expenses paid		(445	)		(260	)
Currency translation		155			1,060

Fair value of plan assets at end of year		22,543			16,498

Funded status
Assets		—			—
Current liability		—			(1	)
Noncurrent liability		(3,783	)		(3,596	)

Net amount recognized in statement of financial position as a noncurrent asset (liability)	$	(3,783	)	$	(3,597	)

The accumulated benefit obligation was approximately $22.5 million and $17.3 million at July 31, 2014, and 2013, respectively.

Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:


	July 31,
	2014		2013
	(In thousands)
Projected benefit obligation	$	24,352	$	18,664
Accumulated benefit obligation	$	21,675	$	16,454
Fair value of plan assets	$	21,425	$	15,423

Components of net periodic pension cost were as follows:


	Years Ended
	July 31,
	2014			2013			2012
	(In thousands)
Service cost	$	521		$	644		$	368
Interest costs		743			728			589
Expected return on plan assets		(577	)		(538	)		(473	)
Amortization of net actuarial (gain) loss		62			38			(88	)
Curtailment gain		—			(504	)		—

Net periodic pension costs	$	749		$	368		$	396

The amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2015 is approximately $0.1 million related to amortization of a net actuarial loss and prior service cost.

Assumptions:

Weighted-average assumptions used to determine benefit obligations was as follows:


	July 31,
	2014			2013			2012
Discount rate		2.95	%		3.61	%		3.95	%
Rate of compensation increase		2.05	%		2.07	%		2.12	%

Weighted-average assumptions used to determine net periodic pension cost was as follows:


	Years Ended July 31,
	2014			2013			2012
Discount rate		3.73	%		4.13	%		5.50	%
Expected long-term rate of return on plan assets		3.54	%		3.43	%		3.34	%
Rate of compensation increase		2.01	%		2.05	%		2.00	%

The discount rate reflects our best estimate of the interest rate at which pension benefits could be effectively settled as of the valuation date. It is based on the Mercer Yield Curve for the Eurozone as per July 31, 2015 for the appropriate duration of the plan.

To develop the expected long-term rate of return on assets assumptions consideration is given to the current level of expected returns on risk free investments, the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for the future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio.

Benefit payments:

The following table summarizes expected benefit payments from the plans through fiscal year 2023. Actual benefit payments may differ from expected benefit payments. The minimum required contributions to the plan are expected to be approximately $0.9 million in fiscal year 2015.


	Pension
	Benefit
	Payments
	(in thousands)
For the fiscal years ended July 31:
2015		102
2016		123
2017		164
2018		185
2019		214
Next 5 years		1,588

The current target allocations for plan assets are 100% for debt securities. The market value of plan assets using Level 2 inputs is approximately $22.5 million.

Valuation Technique:

Benefit obligations are computed using the projected unit credit method. Benefits are attributed to service based on the plan’s benefit formula. Cumulative gains and losses in excess of 10% of the greater of the pension benefit obligation or market-related value of plan assets are amortized over the expected average remaining future service of the current active membership.