13. Defined Pension Benefit Obligations

Jacobs UK Limited (“JUK”) is the sponsor of certain pension plans in the UK (“UK Plans”). The UK Plans currently have an estimated funding deficit of approximately $201.3 million. Given the current estimated funding deficit, the Company replaced JUK’s current recovery plan with an intercompany asset backed pension contribution arrangement.

The contribution arrangement establishes funding for the UK pension plans via a 15-year long term note issued by Jacobs through a non-US affiliate to the UK pension plans. The Note is USD denominated with a stated principal of approximately $131.6 million. Payments of principal and interest on the note are approximately $12.5 million per year.

In connection with the acquisition of CH2M on December 15, 2017, the Company has preliminarily recorded estimates of CH2M’s pension plan assets and liabilities which are reflected in the amounts of $1.1 billion and ($1.2 billion), respectively as of December 29, 2017. CH2M sponsors several defined benefit pension plans primarily in the U.S. and the United Kingdom (“U.K.”). In the U.S., CH2M has three noncontributory defined benefit pension plans. Plan benefits are generally based on years of service and compensation during the span of employment.

The following table presents the components of net periodic benefit cost recognized in earnings during the three months ended December 29, 2017 and December 30, 2016 (in thousands):

	For the Three Months Ended
	December 29, 2017			December 30, 2016
Component:
Service cost	$	3,063		$	2,216
Interest cost		16,071			8,728
Expected return on plan assets		(26,004	)		(15,588	)
Amortization of previously unrecognized items		2,453			3,556
Settlement (gain) loss		3,819			43
Net periodic benefit expense (income)	$	(597	)	$	(1,045	)

In December 2017, the Company incurred a settlement loss of approximately $3.8 million related to its Sverdrup pension plan in the U.S.

The following table presents certain information regarding the Company’s cash contributions to our pension plans for fiscal 2018 (in thousands):

Cash contributions made during the first three months of

fiscal 2018

5,811

Cash contributions we expect to make during the remainder

of fiscal 2018

21,083

Total

26,895