Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

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, 2021 and 2020, 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, 2021 and 2020, the Company contributed approximately $6,000 and $2,000, 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, 2021 and 2020, $23,255 and $7,719, 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, 2021 and 2020, respectively, and unrecognized actuarial gains of $23,255 and $9,872 at December 31, 2021 and 2020, respectively. During 2021, the total amount recorded in other comprehensive income (loss) related to the pension plan was $13,246 (net of tax), which consisted of an actuarial gain of $13,246 and the recognition of $0 of transition obligations recognized during 2021 as a component of net periodic pension cost.

Pension information for the years ended December 31, 2021 and 2020, is as follows:


	2021		2020
Accumulated benefit obligation	$	69,627	$	65,188
Changes in projected benefit obligation:
Projected benefit obligation at beginning of year	95,511		180,151
Interest cost	414		1,207
Actuarial gain	(11,223)		28,834
Benefits paid	—		(121,838)
Service cost	—		—
Currency translation	1,259		7,157
Projected benefit obligation at end of year	$	85,961	$	95,511
Changes in plan assets:
Fair value of plan assets at beginning of year	$	40,476	$	149,903
Actual return on plan assets	2,135		6,226
Benefits paid	—		(121,838)
Employer contributions	5,873		2,012
Currency translation	(108,814)		4,173
Fair value of plan assets at end of year	$	(60,330)	$	40,476
Funded status	(146,291)		(55,035)

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, 2021 and 2020.


Components of net periodic pension cost:
Interest cost	$	414	$	1,207
Expected return on plan assets	(176)		(1,005)
Amortization of net (gain) loss	(19)		(1,052)
Service cost	—		—
Net periodic pension (benefit) cost	$	219	$	(850)

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 2022. Benefit payments of $77,000 are expected to be paid through 2030.

The Company utilized the following assumptions in computing the benefit obligation at December 31, 2021 and 2020 as follows:


	Years ended December 31,
	2021		2020
Discount rate	0.77	%	0.43	%
Rate of increase in compensation levels	2.00	%	2.50	%
Expected long-term rate of return on plan assets	0.77	%	0.43	%