Pension Plans and Other Post Retirement Benefits

3 Months Ended

Sep. 30, 2019

PENSION PLANS AND OTHER POST RETIREMENT BENEFITS

The following table provides details of our defined benefit pension plans and long-term employee benefit obligations for Open Text Document Technologies GmbH (CDT), GXS GmbH (GXS GER), GXS Philippines, Inc. (GXS PHP) and other plans as of September 30, 2019 and June 30, 2019:



	As of September 30, 2019
	Total benefit obligation		Current portion of benefit obligation*		Non-current portion of benefit obligation
CDT defined benefit plan	$	37,315	$	676	$	36,639
GXS GER defined benefit plan	27,665		978		26,687
GXS PHP defined benefit plan	6,913		78		6,835
Other plans	7,797		488		7,309
Total	$	79,690	$	2,220	$	77,470



	As of June 30, 2019
	Total benefit obligation		Current portion of benefit obligation*		Non-current portion of benefit obligation
CDT defined benefit plan	$	35,836	$	675	$	35,161
GXS GER defined benefit plan	26,739		1,012		25,727
GXS PHP defined benefit plan	6,904		124		6,780
Other plans	8,052		481		7,571
Total	$	77,531	$	2,292	$	75,239

* The current portion of the benefit obligation has been included within "Accrued salaries and commissions", all within "Accounts payable and accrued liabilities" in the Condensed Consolidated Balance Sheets (see note 10 "Accounts Payable and Accrued Liabilities").

Defined Benefit Plans

CDT Plan

CDT sponsors an unfunded defined benefit pension plan covering substantially all CDT employees (CDT plan) which provides for old age, disability and survivors’ benefits. Benefits under the CDT plan are generally based on age at retirement, years of service and the employee’s annual earnings. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan's active employees. As of September 30, 2019, there is approximately $0.7 million in accumulated other comprehensive income related to the CDT plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2020.

GXS GER Plan

As part of our acquisition of GXS Group, Inc. (GXS) in Fiscal 2014, we assumed an unfunded defined benefit pension plan covering certain German employees which provides for old age, disability and survivors' benefits. The GXS GER plan has been closed to new participants since 2006. Benefits under the GXS GER plan are generally based on a participant’s remuneration, date of hire, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. No contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. As of September 30, 2019, there is approximately $0.2 million in accumulated other comprehensive income related to the GXS GER plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2020.

GXS PHP Plan

As part of our acquisition of GXS in Fiscal 2014, we assumed a primarily unfunded defined benefit pension plan covering substantially all of the GXS Philippines employees which provides for retirement, disability and survivors' benefits. Benefits under the GXS PHP plan are generally based on a participant’s remuneration, years of eligible service and age at retirement. The net periodic cost of this pension plan is determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs. Aside from an initial contribution which has a fair value of approximately $0.03 million as of September 30, 2019, no additional contributions have been made since the inception of the plan. Actuarial gains or losses in excess of 10% of the projected benefit obligation are being amortized and recognized as a component of net periodic benefit costs over the average remaining service period of the plan’s active employees. As of September 30, 2019, there is approximately $0.2 million in accumulated other comprehensive income related to the GXS PHP plan that is expected to be recognized as a component of net periodic benefit costs over the remainder of Fiscal 2020.

The following are the details of the change in the benefit obligation for each of the above mentioned pension plans for the periods indicated:



	As of September 30, 2019												As of June 30, 2019
	CDT			GXS GER			GXS PHP			Total			CDT			GXS GER			GXS PHP			Total
Benefit obligation—beginning of period	$	35,836		$	26,739		$	6,904		$	69,479		$	32,651		$	25,382		$	3,853		$	61,886
Service cost	142			79			299			520			550			566			771			1,887
Interest cost	114			84			85			283			642			489			300			1,431
Benefits paid	(156		)	(235		)	(105		)	(496		)	(626		)	(996		)	(140		)	(1,762		)
Actuarial (gain) loss	2,570			1,885			(183		)	4,272			3,365			1,872			1,957			7,194
Foreign exchange (gain) loss	(1,191		)	(887		)	(87		)	(2,165		)	(746		)	(574		)	163			(1,157		)
Benefit obligation—end of period	37,315			27,665			6,913			71,893			35,836			26,739			6,904			69,479
Less: Current portion	(676		)	(978		)	(78		)	(1,732		)	(675		)	(1,012		)	(124		)	(1,811		)
Non-current portion of benefit obligation	$	36,639		$	26,687		$	6,835		$	70,161		$	35,161		$	25,727		$	6,780		$	67,668

The following are details of net pension expense relating to the following pension plans:



	Three Months Ended September 30,
	2019									2018
Pension expense:	CDT		GXS GER		GXS PHP			Total		CDT		GXS GER		GXS PHP			Total
Service cost	$	142	$	79	$	299		$	520	$	141	$	145	$	176		$	462
Interest cost	114		84		85			283		165		126		68			359
Amortization of actuarial (gains) and losses	234		61		(71		)	224		176		33		(140		)	69
Net pension expense	$	490	$	224	$	313		$	1,027	$	482	$	304	$	104		$	890

In determining the fair value of the pension plan benefit obligations as of September 30, 2019 and June 30, 2019, respectively, we used the following weighted-average key assumptions:



	As of September 30, 2019			As of June 30, 2019
	CDT	GXS GER	GXS PHP	CDT	GXS GER	GXS PHP
Assumptions:
Salary increases	2.50%	2.50%	6.50%	2.50%	2.50%	6.50%
Pension increases	2.00%	2.00%	N/A	2.00%	2.00%	N/A
Discount rate	0.93%	0.93%	5.00%	1.32%	1.32%	5.00%
Normal retirement age	65-67	65-67	60	65-67	65-67	60
Employee fluctuation rate:
to age 20	—%	—%	12.19%	—%	—%	12.19%
to age 25	—%	—%	16.58%	—%	—%	16.58%
to age 30	1.00%	—%	13.97%	1.00%	—%	13.97%
to age 35	0.50%	—%	10.77%	0.50%	—%	10.77%
to age 40	—%	—%	7.39%	—%	—%	7.39%
to age 45	0.50%	—%	3.28%	0.50%	—%	3.28%
to age 50	0.50%	—%	—%	0.50%	—%	—%
from age 51	1.00%	—%	—%	1.00%	—%	—%

Anticipated pension payments under the pension plans for the fiscal years indicated below are as follows:



	Fiscal years ending September 30,
	CDT		GXS GER		GXS PHP
2020 (nine months ended June 30)	$	493	$	734	$	53
2021	733		978		189
2022	804		1,009		310
2023	902		1,009		257
2024	1,006		1,015		274
2025 to 2028	5,806		5,132		2,666
Total	$	9,744	$	9,877	$	3,749

Other Plans

Other plans include defined benefit pension plans that are offered by certain of our foreign subsidiaries. Many of these plans were assumed through our acquisitions or are required by local regulatory requirements. These other plans are primarily unfunded, with the aggregate projected benefit obligation included in our pension liability. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs.