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RETIREMENT BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2017
Retirement Benefits [Abstract] |
RETIREMENT BENEFIT PLANS | RETIREMENT BENEFIT PLANS DEFINED BENEFIT PLANS The Company maintains a defined benefit pension plan that covers former employees in its manufacturing plant located in Tuttlingen, Germany (the “Germany Plan”). The Company closed the Tuttlingen, Germany plant in December 2005. The Company did not terminate the Germany Plan, and the Company remains obligated for the accrued pension benefits related to this plan. As part of the acquisition of Codman Neurosurgery, the Company assumed various defined benefit which covers certain employees acquired with Codman Neurosurgery in Austria, France, Japan, Germany and Switzerland. Net periodic benefit costs for the Company’s defined benefit pension plans for the year ended December 31, 2017 included the following amounts (amounts in thousand):
Service cost | $ | 565 |
Interest cost | 95 |
Expected return on plan assets | (224 | )
Recognized net actuarial loss | 8 |
Net period benefit cost | $ | 444 |
The following weighted average assumptions were used to develop net periodic pension benefit cost and the actuarial present value of projected pension benefit obligations for the year ended December 31, 2017:
Discount rate | 0.74 | %
Expected return on plan assets | 3.08 | %
Rate of compensation increase | 1.70 | %
The Company’s discount rates are determined by considering current yield curves representing high quality, long-term fixed income instruments. The resulting discount rates are consistent with the duration of plan liabilities. In 2017, the discount rate was prescribed as the current yield on corporate bonds with an average rating of AA or AAA of equivalent currency and term to the liabilities. The expected return on plan assets represents the average rate of return expected to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, the Company considers returns of historical market data as well as actual returns on the plan assets. Using this reference information, the long-term return expectations for each asset category are developed according to the allocation among those investment categories. The assessment is determined using projections from external financial sources, long-term historical averages, actual returns by asset class and the various asset class allocations by market. The following sets forth the change in projected benefit obligations and the change in plan assets for the years ended December 31, 2017 and a reconciliation of the funded status at December 31, 2017 (amounts in thousands):
Change In Projected Benefit Obligations |
Projected benefit obligation, beginning of year | $ | 668 |
Interest cost | 95 |
Service cost | 565 |
Actuarial loss | (12 | )
Employee contribution | 180 |
Premiums paid | (89 | )
Benefit payment | (19 | )
Transfer from Codman Neurosurgery acquisition | 46,448 |
Effect of foreign currency exchange rates | (175 | )
Projected benefit obligation, end of year | $ | 47,661 |
Change In Plan Assets |
Plan assets at fair value, beginning of year | $ | — |
Actual return on plan assets | 82 |
Employer contributions | 450 |
Employee contributions | 180 |
Premiums paid | (89 | )
Transfer from Codman Neurosurgery acquisition | 26,477 |
Effect of foreign currency exchange rates | (157 | )
Plan assets at fair value, end of year | $ | 26,943 |
Reconciliation Of Funded Status |
Fair value of plan assets | $ | 26,943 |
Benefit obligations | 47,661 |
Unfunded benefit obligation | $ | 20,718 |
The unfunded benefit obligation is included in other liabilities in the consolidated balance sheet at December 31, 2017. As of December 31, 2017, the Company has $0.4 million gain recognized within accumulated other comprehensive income (loss) that has not been recognized as component of net periodic cost. The combined accumulated benefit obligation for the defined benefit plans was $42.9 million as of December 31, 2017. Unrecognized gains and losses are amortized over the average remaining future service for each plan. For plans with no active employees, they are amortized over the average life expectancy. The amortization of gains and losses is determined by using a 10% corridor of the greater of the market value of assets or the accumulated benefit obligation. Total unamortized gains and losses in excess of the corridor are amortized over the average remaining future service. Prior service costs/benefits for the pension plans are amortized over the average remaining future service of plan participants at the time of the plan amendment. Prior service cost/benefit is amortized over the average remaining service to full eligibility age of plan participants at the time of the plan amendment. The net plan assets of the pension plans are invested in common trusts as of December 31, 2017. Common trusts are classified as Level 2 in fair value hierarchy. The fair value of common trusts is valued at net asset value based on the fair values of the underlying investments of the trusts as determined by the sponsor of the trusts. The investment strategy of the Company's defined benefit plans is both to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk profile. The investment strategy for the Company’s defined benefit plans is both to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk tolerances. The benefit plans in Austria, France and Germany had no assets at December 31, 2017. As of December 31, 2017, no plan assets are expected to be returned to the Company in the next twelve months. The following table is the summary of expected future benefit payments (in thousands):
2018 | $ | 158 |
2019 | 225 |
2020 | 296 |
2021 | 454 |
2022 | 466 |
Next five years | 5,380 |
As of December 31, 2017, contributions expected to be paid to the plan in 2018 is $1.8 million. In September 2015, the Company completed the buy-out of its defined benefit pension plan in the U.K. which covered certain employees and retirees. All plan assets of the defined benefit pension plan were transferred to an independent financial services firm and the Company made cash contributions of approximately $1.8 million for the year-ended December 31, 2015. The Company recorded expenses totaling approximately $5.6 million in selling, general and administrative costs in conjunction with the buy-out of the plan. The buy-out of the U.K. pension plan eliminated future obligations of the Company under this plan. DEFINED CONTRIBUTION PLANS The Company also has various defined contribution savings plans that cover substantially all employees in the United States, Belgium, Canada, France, Japan, Netherlands, the U.K. and Puerto Rico. The Company matches a certain percentage of each employee’s contributions as per the provisions of the plans. Total contributions by the Company to the plans were $7.2 million, $5.6 million and $3.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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