11.

Employee Benefit Plans

The Company sponsors profit sharing retirement plans for its U.S. employees, which includes employee savings plans established under Section

401

(k) of the U.S. Internal Revenue Code (the

“401

(k) Plans”). The

401

(k) Plans cover substantially all full-time employees who meet certain eligibility requirements. Contributions to the

401

(k) Plans are at the discretion of management. For the years ended

December 31, 2019

and

2018,

the Company contributed approximately

$0.4

million and

$0.5

million, respectively, to the

401

(k) Plans.

The Company’s subsidiary in the United Kingdom, Biochrom Limited maintains contributory, defined benefit or defined contribution pension plans for substantially all of its employees. In

2014,

these defined benefit pension plans were closed to new employees, as well as closed to the future accrual of benefits for existing employees. The provisions of FASB ASC

715

require that the funded status of the Company’s pension plans be recognized in its balance sheet. FASB ASC

715

does

not

change the measurement or income statement recognition of these plans, although it does require that plan assets and benefit obligations be measured as of the balance sheet date. The Company has historically measured the plan assets and benefit obligations as of the balance sheet date.

The components of the Company’s net period benefit cost were as follows:

	Year Ended December 31,
	2019			2018
	(in thousands)
Components of net periodic benefit cost:
Interest cost		484			502
Expected return on plan assets		(761	)		(779	)
Net amortization loss		336			222
Recognition of net gain/loss due to settlements		228			110
Net periodic benefit cost	$	287		$	55

The measurement date is

December

for these plans. The funded status of the Company’s defined benefit pension plans and the amount recognized in the consolidated balance sheets at

December

31,

2019

and

2018

is as follows:

	December 31,
	2019			2018
	(in thousands)
Change in benefit obligation:
Balance at beginning of year	$	18,701		$	21,126
Service cost		-			24
Interest cost		484			502
Actuarial (gain) loss		1,513			(1,056	)
Settlements due to transfers paid		(871	)		(267	)
Benefits paid		(447	)		(521	)
Currency translation adjustment		647			(1,107	)
Balance at end of year	$	20,027		$	18,701

	December 31,
	2019			2018
	(in thousands)
Change in fair value of plan assets:
Balance at beginning of year	$	17,819		$	19,972
Actual return on plan assets		3,172			(1,058	)
Employer contributions		831			741
Settlement due to transfers paid		(931	)		(263	)
Benefits paid		(447	)		(521	)
Currency translation adjustment		670			(1,052	)
Balance at end of year	$	21,114		$	17,819

	December 31,
	2019		2018
	(in thousands)
Benefit obligation:
Funded status	$	1,087	$	(882	)
Unrecognized net loss		N/A		N/A
Net asset (liability) recognized	$	1,087	$	(882	)

The amounts recognized in the consolidated balance sheets consist of:

	December 31,
	2019		2018
	(in thousands)
Other long term assets (liabilities)	$	1,087	$	(882	)
Deferred income tax assets		-		150
Net amount recognized	$	1,087	$	(732	)

The amounts recognized in accumulated other comprehensive loss, net of tax consist of:

	December 31,
	2019		2018
	(in thousands)
Funded status of pension plans	$	1,087	$	(732	)
Net amount recognized	$	1,087	$	(732	)

The weighted average assumptions used in determining the net pension cost for these plans follows:

	Year Ended December 31,
	2019			2018

Discount rate		2.02	%		2.65	%
Expected return on assets		3.84	%		4.68	%

The discount rate assumptions used for pension accounting reflect the prevailing rates available on high-quality, fixed-income debt instruments with terms that match the average expected duration of the Company’s defined benefit pension plan obligations. The Company uses the iBoxx AA

15yr

+ index, which matches the average duration of its pension plan liability of approximately

years.

The Company’s mix of pension plan investments among asset classes also affects the long-term expected rate of return on plan assets. As of

December

31,

2019,

the Company’s actual asset mix approximated its target mix. Differences between actual and expected returns are recognized in the calculation of net periodic pension (income)/cost over the average remaining expected future working lifetime, which is approximately

years, of active plan participants.

The fair value and asset allocations of the Company’s pension benefits as of

December

31,

2019

and

2018

measurement dates were as follows:

	December 31,
	2019				2018
	(in thousands)
Asset category:
Equity securities	$	11,534	55	%	$	9,134	51	%
Debt securities		3,919	19	%		3,274	18	%
Liability driven investment funds		3,615	17	%		4,341	24	%
Cash and cash equivalents		1,514	7	%		618	4	%
Other		532	3	%		452	3	%
Total	$	21,114	100	%	$	17,819	100	%

Financial reporting standards define a fair value hierarchy that consists of

three

levels. The fair values of the plan assets by fair value hierarchy level as of

December

31,

2019

and

2018

is as follows:

	December 31,
	2019		2018
	(in thousands)
Quoted Prices in Active Markets for Identical Assets (Level 1)	$	1,514	$	618
Significant Other Observable Inputs (Level 2)		19,600		17,201
Significant Other Unobservable Inputs (Level 3)		-		-
Total	$	21,114	$	17,819

Level

assets consist of cash and cash equivalents held in the pension plans at

December

31,

2019.

The Level

assets primarily consist of investments in private investment funds that are valued using the net asset values provided by the trust or fund, including an insurance contract. Although these funds are

not

traded in an active market with quoted prices, the investments underlying the net asset value are based on quoted prices.

The Company expects to contribute at least

$0.9

million to its pension plans during

2020.

The benefits expected to be paid from the pension plans are

$0.5

million in

2020,

$0.5

million in

2021,

$0.6

million in

2022,

$0.7

million in

2023

and

$0.8

million in

2024.

The expected benefits to be paid in the

five

years from

2025—2029

are

$4.2

million. The expected benefits are based on the same assumptions used to measure the Company’s benefit obligation at

December 31, 2019.