ACCRUED SEVERANCE, SEVERANCE ASSETS AND RETIREMENT PLANS


(a)	Accrued Severance and Severance Assets

(i) Israeli labor law and certain employee contracts generally require payment of severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company has recorded under liability for employee termination benefits the amount that would be paid if all its Israeli employees were dismissed at the balance sheet date, on an undiscounted basis, in accordance with Israeli labor law. This liability is computed based upon the employee’s number of years of service and salary components, which in the opinion of management create entitlement to severance pay in accordance with labor agreements in force. The amounts due were determined based on the employees’ current salary rates and the number of service years that will be accumulated upon their retirement date. The non-current portion of the liability is reflected on the Company’s Consolidated Balance Sheets as Accrued severance while the current portion of the liability is reflected on the Company’s Consolidated Balance Sheets is included in Accrued payroll, payroll taxes and social benefits.

The liability is partially funded by sums deposited in dedicated funds in respect of employee termination benefits and is reflected on the Company’s Consolidated Balance Sheets as severance assets. For certain Israeli employees, the Company’s liability is covered mainly by regular contributions to defined contribution plans. These funded amounts are not reflected in the balance sheets, since they are not under the control and management of the Company.

(ii) Severance pay contributions to dedicated funds amounted to $322, $347 and $434 for the years ended December 31, 2011, 2012 and 2013, respectively.

(iii) The Company expects to contribute approximately $428 in respect of its severance pay obligations in the year ending December 31, 2014.

(iv) The table below provides a breakdown of the Company's severance liability and severance assets as of December 31, 2012 and 2013.



	As of December 31,
	2012		2013

Current severance liability	$	—	$	151
Non-current severance liability	4,491		4,973
Total severance liability	$	4,491	$	5,124

Amount of the total severance liability with respect to employees reaching legal retirement age in Israel during the years 2014 - 2023	$	1,777	$	2,071


Current severance assets	$	—	$	137
Non-current severance assets	3,165		3,539
Total severance assets	3,165		3,676

Amount of the total severance assets with respect to employees reaching legal retirement age in Israel during the years 2014 - 2023	$	1,097	$	1,265

The timing of actual payment of the severance liability is uncertain as employees may continue to work beyond the legal retirement age. The liability has not been reduced to reflect any amounts already deposited in dedicated funds with respect to those employees, nor does it include future deposits.


(b)	Defined Contribution Plans

In the year ended December 31, 2012, the Company began participating in a defined contribution plan for its U.S. salaried employees meeting age and service requirements, which allows participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code. Effective January 1, 2013, the Company contributes 3% of employees' salaries for those meeting the age and service requirements. In 2012, the Company's OmniMetrix subsidiary made such contributions while in 2013, the Company and all of the Company's U.S. entities made contributions to their respective plans. The expense related to the employer portion for the years ending December 31, 2012 and 2013 was $27 and $149, respectively.

The Company's GridSense subsidiary in Australia administers a statutory retirement benefit plan. The Company is required to contribute a minimum of 9% of an employee's base salary into a registered superannuation fund. Company contributions were approximately $146, $148 and $92 for the years ended December 31, 2011, 2012 and 2013, respectively.