Employee Benefit Plans

12 Months Ended

Dec. 31, 2022

(15) Employee Benefit Plans

Defined Contribution Plan

Effective July 2002, the Company established a voluntary savings and defined contribution plan (the “Plan”) under Section 401(k) of the Internal Revenue Code. This Plan covers all U.S. employees meeting certain eligibility requirements and allows participants to contribute a portion of their annual compensation. Employees are 100% vested in their own contributions. For the years ended December 31, 2022 and 2021, the Company did not make any contributions to the Plan.

Effective July 1, 2007, the Company, in accordance with the labor pension system in Taiwan, contributes 6% of salaries to individual pension accounts managed by the Bureau of Labor Insurance. The plan covers all Taiwan employees that elect the new pension system and all employees hired after July 1, 2005. For the years ended December 31, 2022 and 2021, the Company contributed approximately $2,000 and $6,000, respectively.

Defined Benefit Plan

The Company has a defined benefit plan covering employees in Taiwan. The Company accounts for its defined benefit plan in accordance with the authoritative guidance issued by the FASB on retirement benefits, which requires the Company to recognize the funded status of its defined benefit plan in the accompanying consolidated balance sheet, with the corresponding adjustment to accumulated other comprehensive income, net of tax.

At December 31, 2022 and 2021, $31,873 and $23,255, respectively, is included in accumulated other comprehensive (loss) income for amounts that have not yet been recognized in net periodic pension cost. These amounts include the following: unrecognized transition obligation of $0 and $0 at December 31, 2022 and 2021, respectively, and unrecognized actuarial gains of $31,873 and $23,255 at December 31, 2022 and 2021, respectively. During 2022, the total amount recorded in other comprehensive income (loss) related to the pension plan was $30,847 (net of tax), which consisted of an actuarial loss of $30,847 and the recognition of $0 of transition obligations recognized during 2022 as a component of net periodic pension cost.

Pension information for the years ended December 31, 2022 and 2021, is as follows:


	2022	2021
Accumulated benefit obligation	$60,592	$69,627
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	85,961	95,511
Interest cost	618	414
Actuarial gain	(7,760)	(11,223)
Currency translation	(8,071)	1,259
Projected benefit obligation at end of year	$70,748	$85,961
Changes in plan assets:
Fair value of plan assets at beginning of year	$49,097	$40,476
Actual return on plan assets	3,605	2,135
Employer contributions	1,801	5,873
Currency translation	4,920	613
Fair value of plan assets at end of year	$59,423	$49,097
Funded status	$(11,325)	$(36,864)

The underfunded status of the Company's defined benefit plan has been recorded as a component of other long-term liabilities as of December 31, 2022 and 2021.


Components of net periodic pension cost:
Interest cost	$	618		$	414
Expected return on plan assets		354			(176	)
Amortization of net (gain) loss		(856	)		(19	)
Service cost		—			—
Net periodic pension (benefit) cost	$	116		$	219

The Company makes contributions to the plan so that minimum contribution requirements, as determined by government regulations, are met. Company contributions of approximately $2,000 are expected to be made during 2023. Benefit payments of $69,000 are expected to be paid through 2030.

The Company utilized the following assumptions in computing the benefit obligation at December 31, 2022 and 2021 as follows:


	2022	2021
Discount rate	1.39 %	0.77 %
Rate of increase in compensation levels	2.00 %	2.00 %
Expected long-term rate of return on plan assets	1.39 %	0.77 %