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Pension and Other Post Retirement Benefit Plans | 12 Months Ended
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Dec. 31, 2017
Compensation And Retirement Disclosure [Abstract] |
Pension and Other Post Retirement Benefit Plans | Note 12 — Pension and Other Post Retirement Benefit Plans On August 8, 2008 the Company established The Executive Nonqualified Defined Benefit Plan of Gentherm Incorporated (the “Plan”), an unfunded executive pension plan, with an effective date of April 1, 2008. The Company’s former Chief Executive Officer, Daniel R. Coker, is the only participant in the Plan. On May 10, 2017 the Company amended (the “Plan Amendment”) the Plan. Prior to the Plan Amendment, the Plan provided for 15 annual retirement benefit payments of $300,000 each beginning January 1, 2018. Mr. Coker became fully vested in the benefits under the Benefit Plan on April 1, 2017. The Plan Amendment provided that if Mr. Coker continued to provide employment service to the Company through and including January 1, 2018, the fifteen annual retirement benefit payments would be increased to $342,000, otherwise the 15 annual retirement benefits would remain at $300,000. On June 28, 2017, the same day a leader transition plan leading up to Mr. Coker’s retirement was announced, the Company entered into a Retirement Agreement with Mr. Coker (the “Retirement Agreement”). The Retirement Agreement provided that if Mr. Coker’s retirement date was prior to January 1, 2018, the Company would amend the terms of the Plan, as amended, to accelerate the in-service vesting date to ensure an increase in the annual accrued benefit from $300,000 to $342,000. Mr. Coker became fully vested in the incremental benefit, as described in the Plan Amendment, on December 4, 2017. The Company records a projected benefit obligation representing the present value of future plan benefits when earned by the participant. The following table sets forth the benefit obligation, amounts recognized in the Company’s financial statements and the principal assumptions used:
|  | 2017 |  |  | 2016 |
Change in projected benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 3,419 |  |  | $ | 2,898 |
Service cost |  |  | 101 |  |  |  | 387 |
Interest cost |  |  | 111 |  |  |  | 98 |
Actuarial (gain) loss |  |  | 78 |  |  |  | 36 |
Prior service cost |  |  | 509 |  |  |  | — |
Benefit obligation at end of year |  | $ | 4,218 |  |  | $ | 3,419 |
Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) The portion of the benefit obligation from the Plan expected to be paid in 2018 is classified as a current liability within accrued liabilities in the Company’s consolidated balance sheet. The remaining portion is classified as a non-current liability within pension benefit obligations. Service and interest cost is included in selling, general and administrative expenses in the Company’s consolidated statements of income and actuarial gains and losses are included the Company’s consolidated balance sheet as part of accumulated other comprehensive income within shareholders’ equity. Actuarial gains or losses are amortized to selling, general and administrative expense in the Company’s consolidated statements of income based on the average future service life of the Plan using the corridor method. A discount rate assumption of 2.95%, 3.25% and 3.40% was used to determine the benefit obligation for the years ended December 31, 2017, 2016 and 2015, respectively. A discount rate assumption of 3.25%, 3.40% and 3.25% was used to determine and the net periodic service cost for years ended December 31, 2017, 2016 and 2015, respectively. Prior service costs reflect an increase to the projected benefit obligation as a result of the Plan Amendment, which retroactively increased benefits. Prior service cost is included in selling, general and administrative expenses in the Company’s consolidated statements of income. We do not expect contributions to be paid to the Plan during the next fiscal year. Although the Plan is not funded, the Company has established a separate trust having the sole purpose of paying benefits under the Plan. The only asset of the trust is a corporate-owned life insurance policy (“COLI”). The COLI is valued at fair value using quoted prices listed in active markets (Level 1 input based on the U.S. GAAP fair value hierarchy). The policy value of the COLI was $2,353 and $2,112 as of December 31, 2017 and 2016, respectively, and was included in other non-current assets. Components of the Plan’s net periodic pension benefit cost for the years ended December 31, 2017, 2016 and 2015 are as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Service cost |  | $ | 101 |  |  | $ | 387 |  |  | $ | 379 |
Interest cost |  |  | 111 |  |  |  | 98 |  |  |  | 80 |
Amortization of actuarial losses |  |  | — |  |  |  | — |  |  |  | 27 |
Amortization of prior service cost |  |  | 509 |  |  |  | — |  |  |  | — |
Net periodic benefit cost |  | $ | 721 |  |  | $ | 485 |  |  | $ | 486 |
Pretax amounts recognized in other comprehensive income for the years ended December 31, 2017, 2016 and 2015 are as follows
|  | 2017 |  |  | 2016 |  | 2015 |
Actuarial Losses/(gains) |  | $ | 78 |  |  | $ | 36 |  | $ | (35 | )
Amortization of actuarial losses |  |  | — |  |  |  | — |  |  | (27 | )
Establish prior service cost |  |  | 509 |  |  |  | — |  |  | — |
Amortization prior service cost |  |  | (509 | ) |  |  | — |  |  | — |
|  | $ | 78 |  |  | $ | 36 |  | $ | (62 | )
Tax benefit of $26 was recognized in other comprehensive income related to the Plan for the year ended December 31, 2017. Tax benefit of $14 was recognized in other comprehensive income related to the Plan for the year ended December 31, 2016. Tax expense of $23 was recognized in other comprehensive income related to the Plan for the years ended December 31, 2015. Pretax unrecognized actuarial losses recorded in accumulated other comprehensive loss not yet recognized in net periodic benefit cost were $380 and $302 as of December 31, 2017 and 2016, respectively. No amount of pretax unrecognized actuarial loss recorded in accumulated other comprehensive income as of December 31, 2017 are expected to be recognized as components of net periodic benefit cost in the year ending December 31, 2018. Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) Gentherm GmbH has an established defined benefit plan for retired and current members of its executive management team. Gentherm GmbH records a projected benefit obligation representing the present value of future plan benefits when earned by the participant. The following table sets forth the benefit obligation and amounts recognized in the Company’s financial statements:
|  | 2017 |  |  | 2016 |
Change in projected benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 7,326 |  |  | $ | 6,980 |
Interest cost |  |  | 130 |  |  |  | 154 |
Paid pension distributions |  |  | (272 | ) |  |  | (261 | )
Actuarial (gains)/losses |  |  | (257 | ) |  |  | 691 |
Exchange rate impact |  |  | 1,000 |  |  |  | (238 | )
Benefit obligation at end of year |  | $ | 7,927 |  |  | $ | 7,326 |
The following table sets forth the fair value of the plan assets for the periods ending December 31, 2017 and 2016:
|  | 2017 |  |  | 2016 |
Change in plan assets: |  |  |  |  |  |  |  |
Plan assets at beginning of year |  | $ | 3,326 |  |  | $ | 3,333 |
Actual return on plan assets |  |  | 121 |  |  |  | 125 |
Contributions |  |  | 272 |  |  |  | 261 |
Paid pension distributions |  |  | (272 | ) |  |  | (261 | )
Actuarial losses |  |  | (28 | ) |  |  | (27 | )
Exchange rate impact |  |  | 472 |  |  |  | (105 | )
Plan assets at end of year |  | $ | 3,891 |  |  | $ | 3,326 |
The $4,036 and $4,000 net liability from the Gentherm GmbH plan as of December 31, 2017 and 2016, respectively, is classified as a noncurrent liability in pension benefit obligation. Pretax amounts recognized in other comprehensive (loss) income for the years ended December 31, 2017, 2016 and 2015 are as follows:
|  | 2017 |  |  | 2016 |  | 2015 |
Actuarial (gains)/losses |  | $ | (229 | ) |  | $ | 718 |  | $ | (154 | )
Amortization of actuarial losses |  |  | (78 | ) |  |  | (48 | ) |  | (59 | )
Amortization of prior service cost |  |  | — |  |  |  | — |  |  | (572 | )
|  | $ | (307 | ) |  | $ | 670 |  | $ | (785 | )
Tax expense of $86 was recognized in other comprehensive income related to the Gentherm GmbH defined benefit plan for the year ended December 31, 2017. Tax benefit of $171 and tax expense of $211 were recognized in other comprehensive income for the years ended December 31, 2016 and 2015, respectively. Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) Pretax unrecognized actuarial losses recorded in accumulated other comprehensive loss not yet recognized in net periodic benefit cost were $2,416 and $2,406 as of December 31, 2017 and 2016, respectively. We expect $74 of pretax unrecognized actuarial loss recorded in accumulated other comprehensive income as of December 31, 2017 to be recognized as components of net periodic benefit cost in the year ending December 31, 2018. Components of the Plan’s net periodic pension benefit cost for the years ended December 31, 2017, 2016 and 2015 are as follows:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Interest cost |  | $ | 130 |  |  | $ | 154 |  |  | $ | 142 |
Return on plan assets |  |  | (121 | ) |  |  | (125 | ) |  |  | (126 | )
Amortization of prior service cost |  |  | — |  |  |  | — |  |  |  | 572 |
Amortization of actuarial loss (gains) |  |  | 78 |  |  |  | 48 |  |  |  | 59 |
Net periodic benefit cost |  | $ | 87 |  |  | $ | 77 |  |  | $ | 647 |
The Gentherm GmbH defined benefit plan is underfunded by $4,036 and $4,000 as of December 31, 2017 and 2016, respectively. The net periodic benefit cost is included in selling, general and administrative expenses in the Company’s consolidated statements of income and actuarial gains and losses are included the Company’s consolidated balance sheet as part of accumulated other comprehensive income within shareholders’ equity. Actuarial gains or losses are amortized to selling, general and administrative expense in the Company’s consolidated statements of income using the corridor method. The following table describes the actuarial assumptions used to determine the benefit obligation and the net periodic service cost:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Discount rate |  |  | 1.93 | % |  |  | 1.69 | % |  |  | 2.21 | %
Expected long term rate of return on plan assets |  |  | 3.40 | % |  |  | 3.40 | % |  |  | 3.70 | %
Plan assets are comprised of Gentherm GmbH’s pension insurance policies and are pledged to the beneficiaries of the plan. A market valuation technique, based on observable underlying insurance charges, is used to determine the fair value of the pension plan assets (Level 2). The expected return on plan assets assumption used to calculate Gentherm GmbH’s pension benefit obligation was determined using actual returns realized on plan assets in the prior year. We do not expect contributions to be paid to the Gentherm GmbH defined benefit plan during the next fiscal year. The schedule of expected pension payments made to Gentherm GmbH defined benefit plan participants over the next 10 years is as follows:
Year |  |  |
2018 |  | $ | 293 |
2019 |  |  | 291 |
2020 |  |  | 289 |
2021 |  |  | 287 |
2022 |  |  | 283 |
2023 - 2027 |  |  | 1,392 |
Total |  | $ | 2,835 |
Note 12 — Pension and Other Post Retirement Benefit Plans (Continued) Gentherm has adopted a 401(k) plan to provide all eligible employees a means to accumulate retirement savings on a tax-advantaged basis, and eligible executive officers can participate in this plan on the same basis as other participants. Participants may defer specified portions of their compensation. On a discretionary basis, the Company matches a portion of the employee contributions. The Plan also allows for additional discretionary contributions. Gentherm made $1,396, $1,289 and $959 in matching contributions to the 401(k) plan in 2017, 2016 and 2015, respectively.

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