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Pension Liability
 12 Months Ended
Dec. 31, 2023
Pension Liability [Abstract]  
Pension Liability

Note 10

Pension Liability:

The Company joined a collective pension plan operated by an insurance company as of 2016 which covers the employees in Switzerland.

Both the Company and the participants provide monthly contributions to the pension plan which are based on the covered salary. The respective saving parts of premiums are credited to employees’ accounts. In addition, interest is credited to employees’ accounts at the rate provided in the plan. The pension plan provides for retirement benefits as well as benefits on long-term disability and death.

The following table provides information on the pension plan for the years ended December 31, 2023, 2022 and 2021:

 

2023

  

2022

  

2021

Service cost

  

$

53,920

 

  

$

39,667

 

  

$

25,206

 

Interest cost

  

 

14,416

 

  

 

2,743

 

  

 

2,992

 

Expected return on assets

  

 

(14,767

)

  

 

(12,196

)

  

 

(4,249

)

Effect of settlement, curtailment, plan amendment

  

 

—

 

  

 

(72,600

)

  

 

(5,810

)

Actuarial loss outside corridor recognized

  

 

—

 

  

 

3,091

 

  

 

—

 

Past service cost recognized in year

  

 

3,031

 

  

 

2,855

 

  

 

—

 

Administrative expenses

  

 

2,926

 

  

 

2,298

 

  

 

1,946

 

Net periodic pension cost

  

$

59,525

 

  

$

(34,142

)

  

$

20,085

 

The reconciliation of the projected benefit obligation and the changes to the fair value of the plan assets of the pension plan are shown in the following table:

 

2023

  

2022

Projected benefit obligation, beginning of period

  

$

584,737

 

  

$

927,369

 

Service cost

  

 

53,920

 

  

 

39,667

 

Interest cost

  

 

14,416

 

  

 

2,743

 

Transfers-in and (-out), net

  

 

38,654

 

  

 

(209,035

)

Actuarial (gain)/loss

  

 

123,388

 

  

 

(152,048

)

Currency conversion adjustments

  

 

(6,087

)

  

 

(23,959

)

Projected benefit obligation, end of period

  

$

809,028

 

  

$

584,737

 
   

 

  

 

  

 

  

 

Plan assets, beginning of period

  

$

448,615

 

  

$

608,478

 

Actual return on plan assets

  

 

27,844

 

  

 

(51,764

)

Employer contributions

  

 

38,737

 

  

 

37,468

 

Participant contributions

  

 

20,655

 

  

 

20,608

 

Transfers-in and (-out), net

  

 

17,999

 

  

 

(150,129

)

Administration expenses

  

 

(2,926

)

  

 

(2,299

)

Currency conversion adjustments

  

 

(2,581

)

  

 

(13,747

)

Plan assets, end of period

  

$

548,343

 

  

$

448,615

 

Accrued pension liability

  

$

260,685

 

  

$

136,122

 

As of December 31, 2023 and 2022, the Company recorded an accrued pension liability of $260,685 and $136,122, respectively, as non-current liabilities.

The pension assets are measured at fair value and are invested in a collective pension foundation with pooled investments. Plan assets mainly consist of cash and cash equivalents, equity funds, equity securities, corporate bonds, government bonds, and real estate funds classified as Level 1 and Level 2 under the fair value hierarchy.

The Company records net gains/losses, consisting of actuarial gains/losses, curtailment gains/losses and differences between expected and actual returns on plan assets, in other comprehensive income/loss. Such net gains/losses are amortized to the statements of operations to the extent that they exceed 10% of the greater of projected benefit obligations or pension assets. The Company further records prior service costs/credits from plan amendments in other comprehensive income/loss in the period of the respective plan amendment and amortizes such amounts to the statement of operations over the future service period of the plan participants. For the years ended December 31, 2023 and 2022, the amortization was $0. As of December 31, 2023, and 2022, the accumulated other comprehensive loss includes unrecognized pension costs of $158,073 and $50,791, respectively, consisting of net losses.

The following table shows the components of unrecognized pension cost in accumulated other comprehensive income/loss that have not yet been recognized as components of net periodic pension cost:

 

2023

  

2022

Net loss, beginning of period

  

$

50,791

 

  

$

151,739

 

Other gain/loss during the period

  

 

110,313

 

  

 

(88,088

)

Other prior year gain/loss recognized in period

  

 

—

 

  

 

(3,091

)

Effect of settlement, curtailment

  

 

—

 

  

 

(6,913

)

Amortization of pension related net loss

  

 

—

 

  

 

—

 

Net loss, end of period

  

 

161,104

 

  

 

53,647

 
   

 

  

 

  

 

  

 

Prior service cost, beginning of period

  

 

—

 

  

 

—

 

Amortization of prior service cost

  

 

(3,031

)

  

 

(2,856

)

Prior service cost end of period

  

 

(3,031

)

  

 

(2,856

)

Total unrecognized pension cost, end of period

  

$

158,073

 

  

$

50,791

 

The weighted average of the key assumptions used to compute the benefit obligations were as follows:

 

2023

  

2022

Discount rate

  

1.45

%

  

2.25

%

Rate of increase in compensation level

  

0.65

%

  

0.25

%

Interest credit rate on savings accounts

  

1.45

%

  

2.25

%

Expected long-term rate of return on plan assets

  

2.30

%

  

2.95

%

Inflation rate

  

1.25

%

  

0.85

%

The assumption of the expected long-term rate of return on plan assets was based on the long-term historical rates of returns for the different investment categories which were adjusted, where appropriate, to reflect financial market developments.

The accumulated benefit obligation as of December 31, 2023, and 2022 amounted to $809,028 and $584,737, respectively.

The investment risk is borne by the insurer and the reinsurer respectively, and the investment decision is taken by the board of trustees of the collective insurance.