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EMPLOYEE RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

12 Months Ended

Dec. 31, 2020

EMPLOYEE RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

EMPLOYEE RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

NOTE 17. EMPLOYEE RETIREMENT PLANS AND POSTRETIREMENT BENEFITS

Defined Contribution Plans

We have a 401(k) profit-sharing and retirement savings plan covering substantially all full-time U.S. employees. Participants may defer up to the maximum amount allowed as determined by law. Participants are immediately vested in their contributions. Profit-sharing contributions to the plan, which are discretionary, are approved by the Board of Directors. Vesting in the profit-sharing contribution account is based on years of service, with most participants fully vested after four years of credited service. For the years ended December 31, 2020, 2019, and 2018 our contribution for participants in our 401(k) plan was based on matching 50% of contributions made by employees up to 6% of the employee’s compensation.

During the years ended December 31, 2020, 2019, and 2018 we recognized total defined contribution plan costs of $2.6 million, $1.6 million, and $1.4 million, respectively.

Defined Benefit Plan

We maintain defined benefit pension plans for certain of our non-U.S. employees in the U.K., Germany, and Philippines. Each plan is managed locally and in accordance with respective local laws and regulations.

To measure the expense and related benefit obligation, various assumptions are made including discount rates used to value the obligation, expected return on plan assets used to fund these expenses and estimated future inflation rates. These assumptions are based on historical experience as well as facts and circumstances. An actuarial analysis is used to measure the expense and liability associated with pension benefits.

The information provided below includes one pension plan which is part of discontinued operations. As such, all related liabilities and expenses are reported in discontinued operations in the Company’s Consolidated Balance Sheets and Consolidated Statements of Operations for all periods presented.

The Company’s projected benefit obligation and plan assets for defined benefit pension plans and the related assumptions used to determine the related liabilities are as follows:


	Years Ended December 31,
	2020		2019
Projected benefit obligation, beginning of year	$	83,262	$	33,178
Acquisition		—		48,350
Service cost		1,068		272
Interest cost		1,716		1,211
Actuarial (gain) loss		7,591		(193)
Benefits paid		(1,199)		(1,779)
Translation adjustment		5,302		2,223
Projected benefit obligation, end of year		97,740		83,262

Fair value of plan assets, beginning of year		14,903		13,433
Acquisitions		—		102
Actual return on plan assets		682		380
Contributions		1,827		644
Benefits paid		(993)		(1,176)
Actuarial gain		180		1,064
Translation adjustment		694		456
Fair value of plan assets, end of year		17,293		14,903
Funded status of plan	$	(80,447)	$	(68,359)

The components of net periodic pension benefit cost recognized in our Consolidated Statements of Operations for the periods presented are as follows:


	Years Ended December 31,
	2020		2019		2018
Service cost	$	1,068	$	272	$	841
Interest cost		1,716		1,211		802
Expected return on plan assets		(683)		(615)		(665)
Amortization of actuarial gains and losses		459		411		478
Net periodic pension cost	$	2,560	$	1,279	$	1,456

Assumptions used in the determination of the net periodic pension cost are:


	Years Ended December 31,
	2020		2019		2018
Discount rate	1.8	%	2.7	%	2.8	%
Expected long-term return on plan assets	3.7	%	4.6	%	4.8	%

The fair value of the Company’s qualified pension plan assets by category are as follows:


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Multi-Asset Fund	$	—	$	5,149	$	—	$	5,149
Diversified Growth Fund		—		5,134		—		5,134
Corporate Bonds		—		4,906		—		4,906
Insurance Contracts		—		—		1,109		1,109
Cash		995		—		—		995
Total	$	995	$	15,189	$	1,109	$	17,293


	December 31, 2019
	Level 1		Level 2		Level 3		Total
Multi-Asset Fund	$	—	$	4,825	$	—	$	4,825
Diversified Growth Fund		—		4,855		—		4,855
Index-Linked Gilts		—		1,934		—		1,934
Corporate Bonds		—		2,090		—		2,090
Insurance Contracts		—		—		1,045		1,045
Cash		154		—		—		154
Total	$	154	$	13,704	$	1,045	$	14,903

On December 31, 2020, our plan’s assets of $17.3 million were invested in five separate funds including a multi-asset fund (29.8%), a diversified growth fund (29.7%), corporate bonds (28.4%), and insurance contracts (6.4%). The asset and growth funds aim to generate an ‘equity-like’ return over an economic cycle with significantly reduced volatility relative to equity markets and have scope to use a diverse range of asset classes, including equities, bonds, cash, and alternatives, e.g., property, infrastructure, high yield bonds, floating rate debt, private, equity, hedge funds and currency. These investments are intended to provide a degree of protection against changes in the value of our plan’s liabilities related to changes in long-term expectations for interest rates and inflation expectations.

Expected future payments under defined benefit pension plans, based on foreign exchange rates as of December 31, 2020, are as follows:


Expected Future Benefit Payments
2021	$	2,255
2022		1,972
2023		2,184
2024		2,891
2025		2,301
2026 - 2030		49,098