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Accrued Severance Benefits
 6 Months Ended
Jun. 30, 2022
Postemployment Benefits [Abstract]  
Accrued Severance Benefits
9. Accrued Severance Benefits
The majority of accrued severance benefits are for employees in the Company’s Korean subsidiary. Pursuant to the Employee Retirement Benefit Security Act of Korea, eligible employees and executive officers with one or more years of service are entitled to severance benefits upon the termination of their employment based on their length of service and rate of pay. As of June 30, 2022, 97% of all employees of the Company were eligible for severance benefits.
Changes in accrued severance benefits are as follows (in thousands):
 
 
  
Three Months Ended
 
  
Six Months Ended
 
  
Three Months Ended
 
  
Six Months Ended
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
June 30, 2022
 
  
June 30, 2021
 
Beginning balance
    $ 50,771      $ 51,567      $ 52,553      $ 54,452  
Provisions
      1,570        3,240        1,736        3,507  
Severance payments
      (1,545 )       (2,934 )       (1,343 )       (2,836 ) 
Translation adjustments
      (3,210 )       (4,287 )       159        (2,018 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
     47,586      47,586      53,105      53,105  
Less: Cumulative contributions to severance insurance deposit accounts
      (16,894 )       (16,894 )       (13,316 )       (13,316 ) 
The National Pension Fund
      (44 )       (44 )       (59 )       (59 ) 
Group severance insurance plan
      (182 )       (182 )       (210 )       (210 ) 
    
 
 
     
 
 
     
 
 
     
 
 
  
Accrued severance benefits, net
    $ 30,466      $ 30,466      $ 39,520      $ 39,520  
    
 
 
     
 
 
     
 
 
     
 
 
  
The severance benefits funded through the Company’s National Pension Fund and group severance insurance plan will be used exclusively for payment of severance benefits to eligible employees. These amounts have been deducted from the accrued severance benefit balance.
Beginning in July 2018, the Company contributes to certain severance insurance deposit accounts a certain percentage of severance benefits that are accrued for eligible employees for their services from January 1, 2018. These accounts consist of time deposits and other guaranteed principal and interest, and are maintained at insurance companies, banks or security companies for the benefit of employees. The Company deducts the contributions made to these severance insurance deposit accounts from its accrued severance benefits.
The Company is liable to pay the following future benefits to its
non-executive
employees upon their normal retirement age (in thousands):
 
 
  
Severance benefit
 
Remainder of 2022    $ 237  
2023      590  
2024      864  
2025      1,409  
2026      1,973  
2027      1,635  
2028 – 2032      18,987  
The above amounts were determined based on the
non-executive
employees’ current salary rates and the number of service years that will be accumulated upon their retirement dates. These amounts do not include amounts that might be paid to
non-executive
employees that will cease working with the Company before their normal retirement ages.
Korea’s mandatory retirement age is 60 under the Employment Promotion for the Aged Act.