The Company maintains a U.S. defined benefit pension plan covering its former Chief Executive Officer (“U.S. Plan”) and a German defined benefit pension plan covering certain retired executive employees of the Company’s wholly owned subsidiary, Gentherm GmbH (“German Plan”).

The components of net periodic benefit cost for the Company’s defined benefit plans for the years ended December 31, 2019, 2018 and 2017 were as follows:

	U.S. Plan									German Plan
	Year Ended December 31,									Year Ended December 31,
	2019			2018			2017			2019			2018			2017
Net periodic benefit cost:
Service cost	$	—		$	—		$	101		$	—		$	—		$	—
Interest cost		127			114			111			147			147			130
Expected return on plan assets		—			—			—			(126	)		(130	)		(121	)
Amortization of prior service cost and actuarial loss		—			—			509			72			73			78
Net periodic benefit cost	$	127		$	114		$	721		$	93		$	90		$	87
Assumptions:
Discount rate		3.65	%		2.95	%		3.25	%		1.06	%		2.04	%		1.93	%
Long-term return on assets	N/A			N/A			N/A				3.10	%		3.40	%		3.40	%

A reconciliation of the change in benefit obligation and the change in plan assets for the years ended December 31, 2019 and 2018 is as follows:

	U.S. Plan						German Plan
	As of December 31,						As of December 31,
	2019			2018			2019			2018
Change in projected benefit obligation:
Balance at beginning of year	$	3,832		$	4,218		$	7,529		$	7,927
Interest cost		127			114			147			147
Paid pension distributions		(342	)		(342	)		(285	)		(292	)
Actuarial (gains) losses		254			(158	)		1,116			114
Exchange rate impact		—			—			(154	)		(367	)
Balance at end of year	$	3,871		$	3,832		$	8,353		$	7,529
Change in plan assets:
Balance at beginning of year	$	—		$	—			3,808			3,891
Actual return on plan assets		—			—			126			130
Contributions		—			—			284			292
Paid pension distributions		—			—			(284	)		(292	)
Actuarial losses		—			—			(30	)		(30	)
Exchange rate impact		—			—			(79	)		(183	)
Balance at end of year	$	—		$	—		$	3,825		$	3,808

Funded Status (underfunded)/overfunded	$	(3,871	)	$	(3,832	)	$	(4,528	)	$	(3,721	)

Balance sheet classification:
Other current liabilities		(342	)		(342	)		—			—
Pension benefit obligation		(3,529	)		(3,490	)		(4,528	)		(3,721	)
Accumulated other comprehensive loss (pre-tax):
Actuarial losses		476			222			3,398			2,372

Assumptions:
Discount rate		2.40	%		3.65	%		1.06	%		2.04	%

Pre-tax amounts included in AOCI that are expected to be recognized in net periodic benefit cost during the year ended December 31, 2020 are as follows:

Interest costs are recognized 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 loss 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 life of the Plan using the corridor method. Prior service cost is included in selling, general and administrative expenses in the Company’s consolidated statements of income.

Plan assets are comprised of Gentherm GmbH’s pension insurance policies and are pledged to the beneficiaries of the German 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.

Although the U.S. Plan is not funded, the Company has established a separate trust having the sole purpose of paying benefits under the U.S. 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). The policy value of the COLI was $2,592 and $2,148 as of December 31, 2019 and 2018, respectively, and is included in other non-current assets in the Company’s consolidated balance sheets.

We do not expect contributions to be paid to the U.S. Plan or the German Plan during the next fiscal year.

The Company also sponsors defined contribution plans for eligible employees. On a discretionary basis, the Company matches a portion of the employee contributions and or makes additional discretionary contributions. Gentherm recognized costs of $1,384, $1,471 and $1,396 related to contributions to its defined contribution plans during the years ended December 31, 2019, 2018 and 2017, respectively.