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Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2018

Defined Benefit Pension Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of these defined benefit pension plans assets and obligations are shown below:

		2018								2017
		United States				Foreign				United States				Foreign
		(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year		$	363,026			$	39,353			$	353,616			$	60,738
Service cost			2,196				786				2,239				818
Interest cost			8,940				687				13,151				852
Actuarial (gain) loss			(30,136	)			773				12,702				262
Benefits paid			(14,793	)			(741	)			(18,682	)			(994	)
Retiree annuity purchase			(151,341	)			—				—				—
Liability loss due to settlement			345				—				—				—
Settlements			—				—				—				(28,560	)
Admin expenses paid			—				—				—				(40	)
Non-U.S. currency movement			—				(1,712	)			—				6,277
End of year			178,237				39,146				363,026				39,353
Change in plan assets:
Fair value of plan assets:
Beginning of year			324,506				1,307				307,304				27,571
Company contributions			2,587				822				4,462				883
Actual return on plan assets			(16,658	)			50				31,422				737
Benefits paid			(14,793	)			(741	)			(18,682	)			(994	)
Retiree annuity purchase			(151,341	)			—				—				—
Settlements			—				—				—				(28,560	)
Admin expenses paid			—				—				—				(40	)
Non-U.S. currency movement			—				(38	)			—				1,710
End of year			144,301				1,400				324,506				1,307
Funded status		$	(33,936	)		$	(37,746	)		$	(38,520	)		$	(38,046	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of the statements of financial position as of December 31:

		2018								2017
		United States				Foreign				United States				Foreign
		(in thousands)
Retirement plans assets		$	16,883			$	—			$	17,491			$	—
Accrued employees’ compensation and withholdings			(2,676	)			(852	)			(2,524	)			(863	)
Retirement plans liabilities			(48,143	)			(36,894	)			(53,487	)			(37,183	)
Funded status		$	(33,936	)		$	(37,746	)		$	(38,520	)		$	(38,046	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

		2018								2017
		United States				Foreign				United States				Foreign
		(in thousands)
Prior service cost, before tax		$	—			$	—			$	58			$	—
Deferred taxes			560				—				539				—
Total recognized in other comprehensive income, net of tax		$	560			$	—			$	597			$	—

Pension Plans with Accumulated Benefit Obligation and Projected Benefit Obligation in Excess of Plan Assets

Information for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

		2018								2017
		United States				Foreign				United States				Foreign
		(in millions)
Projected benefit obligation		$	50.8			$	39.1			$	56.0			$	39.4
Accumulated benefit obligation			48.6				35.6				51.6				34.7
Fair value of plan assets			—				1.4				—				1.3

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2018, 2017, and 2016, Teradyne’s net periodic pension (income) cost was comprised of the following:

		2018								2017								2016
		United States				Foreign				United States				Foreign				United States				Foreign
		(in thousands)
Components of Net Periodic Pension (Income) Cost:
Service cost		$	2,196			$	786			$	2,239			$	818			$	2,302			$	761
Interest cost			8,940				687				13,151				852				13,630				1,185
Expected return on plan assets			(9,049	)			(19	)			(12,008	)			(165	)			(13,830	)			(443	)
Amortization of prior service cost			58				—				70				—				96				—
Net actuarial (gain) loss			(4,429	)			743				(6,712	)			(310	)			(4,013	)			815
Settlement loss			345				—				—				—				—				—
Total net periodic pension (income) cost		$	(1,939	)		$	2,197			$	(3,260	)		$	1,195			$	(1,815	)		$	2,318
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Reversal of amortization items:
Prior service cost			(58	)			—				(70	)			—				(96	)			—
Total recognized in other comprehensive income			(58	)			—				(70	)			—				(96	)			—
Total recognized in net periodic pension (income) cost and other comprehensive income		$	(1,997	)		$	2,197			$	(3,330	)		$	1,195			$	(1,911	)		$	2,318

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Pension Cost at January 1:

		2018								2017								2016
		United States				Foreign				United States				Foreign				United States				Foreign
Discount rate			3.4	%			1.8	%			3.9	%			1.8	%			4.0	%			2.3	%
Expected return on plan assets			4.3				1.5				4.0				2.0				4.8				2.0
Salary progression rate			2.3				2.7				2.6				2.7				2.7				3.2

Weighted Average Assumptions to Determine Pension Obligations at December 31:

		2018								2017
		United States				Foreign				United States				Foreign
Discount rate			4.1	%			1.8	%			3.4	%			1.8	%
Salary progression rate			2.3				2.6				2.3				2.7

Weighted Average Pension Asset Allocations by Category

The following table provides weighted average pension asset allocation by asset category at December 31, 2018 and 2017:

		2018								2017
		United States				Foreign				United States				Foreign
Fixed income securities			94.0	%			—	%			88.1	%			—	%
Equity securities			5.0				—				9.9				—
Other			1.0				100.0				2.0				100.0
			100.0	%			100.0	%			100.0	%			100.0	%

Target Asset Allocation and Index for Each Asset Category

The target asset allocation and the index for each asset category for the U.S. Plan, per the investment policy, are as follows:

Asset Category:		Policy Index:		Target Allocation
U.S. corporate fixed income		Barclays U.S. Corporate A or Better Index			75	%
Global equity		MSCI World Minimum Volatility Index			5
U.S. government fixed income		Barclays U.S. 20+ Year Treasury Strips Index			14
High yield fixed income		Barclays U.S. Corporate High Yield 2% Issuer Cap Index			5
Cash		Citigroup Three Month U.S. Treasury Bill Index			1

Changes in Fair Value of Pension Assets

The fair value of pension plan assets by asset category and by level at December 31, 2018 and December 31, 2017 were as follows:

		December 31, 2018
		United States																Foreign
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
		(in thousands)
Fixed income securities:
Corporate debt securities		$	—			$	115,424			$	—			$	115,424			$	—			$	—			$	—			$	—
U.S. government securities			—				20,176				—				20,176				—				—				—				—
Global equity			—				7,252				—				7,252				—				—				—				—
Other			—				—				—				—				—				1,400				—				1,400
Cash and cash equivalents			1,449				—				—				1,449				—				—				—				—
Total		$	1,449			$	142,852			$	—			$	144,301			$	—			$	1,400			$	—			$	1,400

		December 31, 2017
		United States																Foreign
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
		(in thousands)
Fixed income securities:
Corporate debt securities		$	—			$	260,294			$	—			$	260,294			$	—			$	—			$	—			$	—
U.S. government securities			—				25,709				—				25,709				—				—				—				—
Global equity			—				32,120				—				32,120				—				—				—				—
Group annuity insurance contracts			—				—				3,166				3,166				—				—				—				—
Other			—				—				—				—				—				1,307				—				1,307
Cash and cash equivalents			3,217				—				—				3,217				—				—				—				—
Total		$	3,217			$	318,123			$	3,166			$	324,506			$	—			$	1,307			$	—			$	1,307

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

		United States				Foreign
		(in thousands)
2019		$	6,903			$	874
2020			7,133				1,522
2021			8,026				905
2022			8,863				888
2023			9,584				1,199
2024-2028			57,120				5,921

Group Annuity Insurance Contracts

Changes in Fair Value of Pension Assets

Changes in the fair value of Level 3 group annuity insurance contracts for the years ended December 31, 2018 and 2017 were as follows:

		Group Annuity Insurance Contracts
		(in thousands)
Balance at December 31, 2016		$	29,456
Settlements			(28,560	)
Interest and market value adjustments			959
Benefits paid			(244	)
Other			(61	)
Non-U.S. currency movement			1,616
Balance at December 31, 2017			3,166
Transfer out of Level 3			(2,658	)
Purchases of retiree annuity insurance contracts			(512	)
Interest and market value adjustments			59
Benefits paid			(40	)
Other			(15	)
Balance at December 31, 2018		$	—

Postretirement Benefit Plans

Defined Benefit Pension and Postretirement Benefit Plan Assets and Obligations

The December 31 balances of the postretirement assets and obligations are shown below:

		2018				2017
		(in thousands)
Assets and Obligations
Change in benefit obligation:
Projected benefit obligation:
Beginning of year		$	6,177			$	5,510
Service cost			39				34
Interest cost			196				201
Actuarial loss			25				398
Special termination benefits			3,708				591
Benefits paid			(889	)			(557	)
End of year			9,256				6,177
Change in plan assets:
Fair value of plan assets:
Beginning of year			—				—
Company contributions			889				557
Benefits paid			(889	)			(557	)
End of year			—				—
Funded status		$	(9,256	)		$	(6,177	)

Amounts Recorded within Statement of Financial Position

The following table provides amounts recorded within the account line items of financial position as of December 31:

		2018				2017
		(in thousands)
Accrued employees’ compensation and withholdings		$	(1,310	)		$	(591	)
Retirement plans liability			(7,946	)			(5,586	)
Funded status		$	(9,256	)		$	(6,177	)

Amounts Recognized in Accumulated Other Comprehensive Income

The following table provides amounts recognized in accumulated other comprehensive income as of December 31:

		2018				2017
		(in thousands)
Prior service credit, before tax		$	(249	)		$	(622	)
Deferred taxes			(1,641	)			(1,472	)
Total recognized in other comprehensive income, net of tax		$	(1,890	)		$	(2,094	)

Net Periodic Pension and Postretirement Benefit Costs

For the years ended December 31, 2018, 2017, and 2016, Teradyne’s net periodic postretirement benefit cost (income) was comprised of the following:

		2018				2017				2016
		(in thousands)
Components of Net Periodic Postretirement Benefit Cost (income):
Service cost		$	39			$	34			$	37
Interest cost			196				201				218
Amortization of prior service credit			(373	)			(496	)			(607	)
Net actuarial loss			25				398				5
Special termination benefits			3,708				591				—
Total net periodic postretirement benefit cost (income)			3,595				728				(347	)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income:
Prior service cost			—				—				(93	)
Reversal of amortization items:
Prior service credit			373				496				607
Total recognized in other comprehensive income			373				496				514
Total recognized in net periodic postretirement benefit cost (income) and other comprehensive income		$	3,968			$	1,224			$	167

Weighted Average Assumptions to Determine Net Periodic Cost and Benefit Obligation

Weighted Average Assumptions to Determine Net Periodic Postretirement Benefit Income as of January 1:

		2018				2017				2016
Discount rate			3.4	%			3.9	%			3.9	%
Initial health care cost trend rate			7.9				7.3				7.5
Ultimate health care cost trend rate			4.5				5.0				5.0
Year in which ultimate health care cost trend rate is reached			2026				2023				2023

Weighted Average Assumptions to Determine Postretirement Benefit Obligation as of December 31:

		2018				2017				2016
Discount rate			4.0	%			3.4	%			3.9	%
Initial medical trend			7.5				7.9				7.3
Ultimate health care trend			4.5				4.5				5.0
Medical cost trend rate decrease to ultimate rate in year			2026				2026				2023

Expected Future Benefit Payments

Future benefit payments are expected to be paid as follows:

		Benefit Payments
		(in thousands)
2019		$	1,310
2020			1,234
2021			1,181
2022			984
2023			811
2024-2028			2,364

One Percentage Point Change in Assumed Health Care Cost Trend Rates for Year

A one percentage point change in the assumed health care cost trend rates for the year ended December 31, 2018 would have the following effects:

		1 Percentage Point Increase				1 Percentage Point Decrease
		(in thousands)
Effect on total service and interest cost components		$	7			$	(7	)
Effect on postretirement benefit obligations			181				(171	)

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