RETIREMENT BENEFIT PLANS

12 Months Ended

Dec. 31, 2019

DEFINED BENEFIT PLANS

The Company has various defined benefit plans which covers certain employees in Austria, France, Japan, Germany and Switzerland.

Net periodic benefit costs for the Company’s defined benefit pension plans for the years ended December 31, 2019 and 2018 included the following (amounts in thousands):



	Year ended December 31,
	2019			2018
Service cost	$	3,815		$	2,704
Interest cost	517			351
Expected return on plan assets	(1,047		)	(944		)
Amortization of prior service cost (credit)	(259		)	—
Recognized actuarial losses	65			8
Settlements	602			—
Net period benefit cost	$	3,693		$	2,119

The following weighted average assumptions were used to develop net periodic pension benefit costs and the actuarial present values of projected pension benefit obligations for the years ended December 31, 2019 and 2018, respectively:



	As of December 31,
	2019		2018
Discount rate	0.40	%	1.00	%
Expected return on plan assets	3.33	%	3.40	%
Rate of compensation increase	2.25	%	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 2019 and 2018, the discount rates were 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 returns on plan assets represent 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 rates 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, 2019 and 2018 and a reconciliation of the funded status at December 31, 2019 and 2018, respectively (amounts in thousands):



	Year ended December 31,
	2019			2018
Change In Projected Benefit Obligations
Projected benefit obligations, beginning of year	$	52,542		$	47,661
Interest cost	517			351
Service cost	3,815			2,704
Actuarial loss	12,188			762
Plan amendments	(3,133		)	—
Plan settlements	(2,664		)	—
Employee contribution	899			641
Premiums paid	(395		)	—
Benefit payment	(635		)	(1,483		)
Plans transferred in	3,199			2,280
Effect of foreign currency exchange rates	639			(374		)
Projected benefit obligations, end of year	$	66,972		$	52,542

	Year ended December 31,
	2019			2018
Change In Plan Assets
Plan assets at fair value, beginning of year	$	31,103		$	26,943
Actual return on plan assets	(152		)	1,802
Employer contributions	2,189			1,720
Employee contributions	899			641
Plan settlements	(2,645		)	—
Benefits paid	(635		)	(1,463		)
Premiums paid	(395		)	—
Plans transferred in	—			1,589
Effect of foreign currency exchange rates	406			(129		)
Plan assets at fair value, end of year	$	30,770		$	31,103



	Year ended December 31,
	2019		2018
Reconciliation Of Funded Status
Fair value of plan assets	$	30,770	$	31,103
Benefit obligations	66,972		52,542
Unfunded benefit obligations	$	36,202	$	21,439

The unfunded benefit obligations are included in other liabilities in the consolidated balance sheets at December 31, 2019 and 2018, respectively.

During the periods ended December 31, 2019 and 2018, the Company had net losses of $9.0 million and $0.6 million, respectively, recognized within accumulated other comprehensive loss that has not been recognized as a component of net periodic benefit cost. The loss recognized during the period ended December 31, 2019, is primarily attributed to a change in the discount rate used to estimate the projected benefit obligation for defined benefit plans which cover certain employees in Switzerland. The combined accumulated benefit obligations for the defined benefit plans was $61.1 million and $49.6 million as of December 31, 2019 and 2018, respectively.

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.

The net plan assets of the pension plans are invested in common trusts. 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, 2019.

As of December 31, 2019, 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):



2020	$	1,702
2021	1,743
2022	1,499
2023	1,650
2024	2,115
Next five years	10,157

As of December 31, 2019, contributions expected to be paid to the plan in 2020 is $2.1 million.

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 $8.6 million, $8.1 million and $7.2 million for the years ended December 31, 2019, 2018 and 2017, respectively.