M. Retirement Plans

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of these plans consist primarily of fixed income and equity securities. In addition, Teradyne has an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (“IRC”), as well as unfunded foreign plans.

Net periodic pension (benefit) cost was comprised of the following:


	For the Three Months Ended						For the Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
	(in thousands)
Service cost	$	852		$	643		$	1,686		$	1,357
Interest cost		3,281			4,125			6,575			8,185
Expected return on plan assets		(3,631	)		(4,082	)		(7,261	)		(8,164	)
Amortization of unrecognized prior service cost		41			58			82			116
Actuarial (gain) loss		(1,123	)		3,146			(1,047	)		3,146

Total net periodic pension (benefit) cost	$	(580	)	$	3,890		$	35		$	4,640

In the six months ended June 30, 2013, Teradyne contributed $0.9 million to the U.S. supplemental executive defined benefit pension plan and $1.0 million to certain qualified plans for non-U.S. subsidiaries.

Postretirement Benefit Plan

In addition to receiving pension benefits, U.S. Teradyne employees who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes death, and medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits, and the existing benefit obligation relates primarily to those employees.

Teradyne’s net periodic postretirement benefit was comprised of the following:


	For the Three Months Ended						For the Six Months Ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
	(in thousands)
Service cost	$	21		$	15		$	37		$	34
Interest cost		84			108			171			219
Amortization of unrecognized prior service benefit		(150	)		(150	)		(299	)		(299	)
Actuarial gain		(236	)		(92	)		(236	)		(92	)

Total net periodic post-retirement benefit	$	(281	)	$	(119	)	$	(327	)	$	(138	)