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Defined Benefit Plan
 12 Months Ended
Dec. 31, 2022
Postemployment Benefits [Abstract]  
Compensation and Employee Benefit Plans [Text Block] Defined Benefit Plan
In connection with the acquisition of Arnold, the Company has a defined benefit plan covering substantially all of Arnold’s employees at its Lupfig, Switzerland location. The benefits are based on years of service and the employees’ highest average compensation during the specific period.
During the year ended December 31, 2020, Arnold terminated certain employees at the Switzerland location who were participants in the defined benefit plan. The termination of the employees resulted in a decrease in the accumulated benefit obligation liability in 2020. A curtailment loss of $0.1 million and $0.4 million was recognized during the years ended December 31, 2021 and 2020, respectively.
The following table sets forth the plan’s funded status and amounts recognized in the Company’s consolidated balance sheets at December 31, 2022 and 2021:
December 31,
(in thousands)
20222021
Change in benefit obligation:
Benefit obligation, beginning of year$12,311 $14,025 
Service cost432 422 
Interest cost42 38 
Actuarial (gain)/loss(1,792)(484)
Plan amendment(73)(267)
Employee contributions and transfer349 304 
Benefits paid74 253 
Settlement(518)(1,445)
Foreign currency translation(176)(535)
Benefit obligation$10,649 $12,311 
Change in plan assets:
Fair value of assets, beginning of period$9,449 $10,034 
Actual return on plan assets(122)349 
Company contribution371 324 
Employee contributions and transfer349 304 
Benefits paid74 253 
Settlement(518)(1,445)
Foreign currency translation(82)(370)
Fair value of assets9,521 9,449 
Funded status$(1,128)$(2,862)
The unfunded liability of $1.1 million and $2.9 million at December 31, 2022 and 2021, respectively, is recognized in the consolidated balance sheet within other non-current liabilities. Net periodic benefit cost consists of the following:
Year ended December 31,
(in thousands)
202220212020
Service cost$432 $422 $571 
Interest cost42 38 31 
Expected return on plan assets(73)(73)(84)
Amortization of unrecognized gain (loss)(27)(12)232 
Effect of curtailment(40)111 381 
Net periodic benefit cost$334 $486 $1,131 
Assumptions used to determine the benefit obligations and components of the net periodic benefit cost at December 31, 2022 and 2021:
December 31,
20222021
Discount rate2.25 %0.35 %
Expected return on plan assets2.25 %0.80 %
Rate of compensation increase4.00 %2.00 %
The Company considers the historical level of long-term returns and the current level of expected long-term returns for the plan assets, as well as the current and expected allocation of assets when developing its expected long-term rate of return on assets assumption. The assumptions used for the plan are based upon customary rates and practices for the location of the Company.
Arnold expects to contribute approximately $0.4 million to the defined benefit plan in 2023.
The following presents the benefit payments which are expected to be paid for the plan in each year indicated (in thousands):
2023$433 
2024629 
2025652 
2026722 
2027863 
Thereafter3,091 
$6,390 
Asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk and providing adequate liquidity to meet immediate and future benefit payment requirements.
The assets of the plan are reinsured in their entirety with Swiss Life Ltd. (“Swiss Life”) within the framework of the corresponding contracts with Swiss Life Collective BVG Foundation and Swiss Life Complementary Foundation. The assets are guaranteed by the insurance company and pooled with the assets of other participating employers. The allocation of pension plan assets by category in Swiss Life’s group life portfolio is as follows at December 31, 2022:
Fixed income bonds and securities61 %
Real estate21 %
Equities and investment funds14 %
Certificates of deposit and cash and cash equivalents1 %
Other investments3 %
100 %
The plan assets are pooled with assets of other participating employers and are not separable; therefore the fair values of the pension plan assets at December 31, 2022 and 2021 were considered Level 3.