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Pension Benefits
 12 Months Ended
Dec. 31, 2020
Pension Benefits  
Pension Benefits

8.           Pension Benefits

U.S. Defined Contribution Pension Plan - The Company has a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code, pursuant to which substantially all of its U.S. employees are eligible to participate after completing six months of service. Participants may elect to contribute a portion of their compensation to the plan. Under the plan, the Company has the discretion to match a portion of participants’ contributions. For the years ended December 31, 2020 and 2019, the Company did not make any matching contributions.

Non-U.S. Pension Benefits - The accounting standard for pensions requires an employer to recognize a net liability or asset and an offsetting adjustment to accumulated other comprehensive loss to report the funded status of defined benefit pension and other post-retirement benefit plans.

Most of the non-U.S. subsidiaries provide for government-mandated defined pension benefits. For certain of these subsidiaries, vested eligible employees are provided a lump sum payment upon retiring from the Company at a defined age. The lump sum amount is based on the salary and tenure as of retirement date. Other non-U.S. subsidiaries provide for a lump sum payment to vested employees on retirement, death, incapacitation or termination of employment, based upon the salary and tenure as of the date employment ceases. The liability for such defined benefit obligations is determined and provided on the basis of actuarial valuations. As of December 31, 2020, these plans were unfunded. Pension expense for foreign subsidiaries totaled approximately $0.8 million and $0.3 million for the years ended December 31, 2020 and 2019, respectively.

The following tables set out the status of the non-U.S. pension benefits and the amounts (in thousands) recognized in the Company’s consolidated financial statements and the components of pension costs as of and for each of the two years in the period ended December 31, 2020:

Benefit Obligations:

 

 

 

 

 

 

 

 

 

    

2020

    

2019

 

 

 

 

 

 

 

Projected benefit obligation at beginning of the year

 

$

4,611

 

$

2,591

Service cost

 

 

492

 

 

289

Interest cost

 

 

249

 

 

194

Actuarial loss (gain)

 

 

505

 

 

1,720

Foreign currency exchange rates changes

 

 

168

 

 

52

Benefits paid

 

 

(85)

 

 

(235)

Projected benefit obligation at end of the year

 

$

5,940

 

$

4,611

 

Components of Net Periodic Pension Cost:

 

 

 

 

 

 

 

 

 

    

2020

    

2019

 

 

 

 

 

 

 

Service cost

 

$

492

 

$

289

Interest cost

 

 

249

 

 

194

Actuarial gain (loss) recognized

 

 

50

 

 

(148)

Net periodic pension cost

 

$

791

 

$

335

 

The accumulated benefit obligation, which represents benefits earned to date, was approximately $3.7 million and $2.9 million as of December 31, 2020 and 2019, respectively.

Amounts recognized in the consolidated balance sheets for the years ended December 31, 2020 and 2019 consisted of the following (in thousands):

 

 

 

 

 

 

 

 

 

    

2020

    

2019

 

 

 

 

 

 

 

Current accrued benefit cost

 

$

332

 

$

570

Non-current accrued benefit cost

 

 

5,608

 

 

4,041

Total amount recognized

 

$

5,940

 

$

4,611

 

Current accrued benefit cost for pension benefits was included in the current portion of long-term obligations in the consolidated balance sheets. Non-current accrued benefit cost for pension benefits was included in long-term obligations, net of current portion, in the consolidated balance sheets.

Actuarial assumptions for all non-U.S. plans are described below. The discount rates are used to measure the year end benefit obligations and the earnings effects for the subsequent year. The assumptions for each of the two years in the period ended December 31, 2020 were as follows:

 

 

 

 

 

 

 

    

2020

    

2019

 

 

 

 

 

Discount rate

 

3.57%‑8.06%

 

4.85%‑10.42%

Rate of increase in compensation level

 

5%‑7%

 

5%‑7%

 

Estimated Future Benefit Payments:

As of December 31, 2020, the following benefit payments, which reflect expected future service, as appropriate, were expected to be paid (in thousands):

 

 

 

 

 

Years Ending December 31,

    

 

Amount

 

 

 

 

2021

 

$

629

2022

 

 

234

2023

 

 

157

2024

 

 

206

2025

 

 

413

2026 to 2030

 

 

3,251

 

 

$

4,890