Note 11 – Pensions and Other Postretirement Benefits

The Company maintains various retirement benefit plans. GAAP requires employers to recognize the funded status of a benefit plan, measured as the difference between plan assets at fair value and the benefit obligation, in its balance sheet. The recognition of the funded status on the balance sheet requires employers to recognize actuarial items (such as actuarial gains and losses, prior service costs, and transition obligations) as a component of other comprehensive income, net of tax.

The following table summarizes amounts recorded on the consolidated balance sheets associated with these various retirement benefit plans:

	December 31,
	2013			2012

Included in "Other Assets":
U.S. pension plans	$	15,708		$	-
Non-U.S. pension plans		257			143
Total included in other assets	$	15,965		$	143
Included in "Accrued Payroll":
U.S. pension plans	$	(51	)	$	(83	)
Non-U.S. pension plans		(7,644	)		(6,997	)
U.S. other postretirement plans		(638	)		(637	)
Total included in accrued payroll	$	(8,333	)	$	(7,717	)
Accrued pension and other postretirement costs:
U.S. pension plans	$	(35,397	)	$	(89,116	)
Non-U.S. pension plans		(224,280	)		(229,014	)
U.S. other postretirement plans		(6,703	)		(7,520	)
Non-U.S. other postretirement plans		(7,504	)		(6,964	)
Other retirement obligations		(14,017	)		(12,347	)
Total accrued pension and other postretirement costs	$	(287,901	)	$	(344,961	)
Accumulated other comprehensive loss:
U.S. pension plans	$	84,384		$	146,525
Non-U.S. pension plans		61,652			71,459
U.S. other postretirement plans		(5,782	)		(5,937	)
Non-U.S. other postretirement plans		1,246			805
Total accumulated other comprehensive loss*	$	141,500		$	212,852

* - Amounts included in accumulated other comprehensive loss are presented in this table pre-tax.

Note 11 – Pensions and Other Postretirement Benefits (continued)

Defined Benefit Pension Plans

U.S. Pension Plans

The Company maintains several defined benefit pension plans which covered most full-time U.S. employees. These include pension plans which are "qualified" under the Employee Retirement Security Act of 1974 ("ERISA") and the Internal Revenue Code, and "non-qualified" pension plans which provide defined benefits primarily to U.S. employees whose benefits under the qualified pension plan would be limited by ERISA and the Internal Revenue Code. Pension benefits earned are generally based on years of service and compensation during active employment.

Qualified U.S. Pension Plans

The qualified U.S. pension plans historically included both contributory and non-contributory plans. The Company's principal qualified U.S. pension plan (the Vishay Retirement Plan) was funded through Company and participant contributions to an irrevocable trust fund. The Company's other qualified U.S. pension plans, which were assumed as a result of past acquisitions, were funded only through Company contributions.

In 2008, the Company adopted amendments to the Vishay Retirement Plan such that effective January 1, 2009, the plan was frozen. Pursuant to these amendments, no new employees may participate in the plan, no further participant contributions were required or permitted, and no further benefits shall accrue after December 31, 2008. Benefits accumulated as of December 31, 2008 will be paid to employees upon retirement, and the Company will likely need to make additional cash contributions to the plan to fund this accumulated benefit obligation. To mitigate the loss in benefits of these employees, effective January 1, 2009, the Company increased the Company-match portion of its 401(k) defined contribution savings plan for employees impacted by the pension freeze.

The Company's other qualified U.S. pension plans had all been effectively frozen in prior years. All of the Company's qualified U.S. pension plans have been merged into the Vishay Retirement Plan.

Non-qualified U.S. Pension Plans

The Company's principal non-qualified U.S. pension plan (the Vishay Non-qualified Retirement Plan) was a contributory pension plan designed to provide similar defined benefits to covered U.S. employees whose benefits under the Vishay Retirement Plan would be limited by ERISA and the Internal Revenue Code. The Vishay Non-qualified Retirement Plan is identical in construction to the Vishay Retirement Plan, except that the plan is not qualified under ERISA.

The Vishay Non-qualified Retirement Plan, like all non-qualified plans, is considered to be unfunded. The Company maintains a non-qualified trust, referred to as a "rabbi" trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the non-qualified pension plan were $18,678 and $16,608 at December 31, 2013 and 2012, respectively.

In 2008, the Company adopted amendments to the Vishay Non-Qualified Retirement Plan such that effective January 1, 2009, the plan was frozen. Pursuant to these amendments, no new employees may participate in the plans, no further participant contributions were required or permitted, and no further benefits shall accrue after December 31, 2008. Benefits accumulated as of December 31, 2008 will be paid to employees upon retirement, and the Company will likely need to make additional cash contributions to the rabbi trust to fund this accumulated benefit obligation. To mitigate the loss in benefits of these employees, effective January 1, 2009, the Company increased the Company-match portion of its 401(k) defined contribution savings plan for employees impacted by the pension freeze.

Note 11 – Pensions and Other Postretirement Benefits (continued)

The Company also maintains other pension plans which provide supplemental defined benefits primarily to former U.S. employees whose benefits under qualified pension plans were limited by ERISA. These non-qualified plans are all non-contributory plans, and are considered to be unfunded.

In 2004, the Company entered into an employment agreement with Dr. Felix Zandman, its Executive Chairman and then-Chief Executive Officer. Pursuant to this agreement, the Company is providing an annual retirement benefit of approximately $614 to his surviving spouse. The Company maintains a non-qualified trust, referred to as a "rabbi" trust, to fund benefit payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to this non-qualified pension plan were $4,221 and $4,833 at December 31, 2013 and 2012, respectively.

In 2010, the Compensation Committee determined to modify Dr. Gerald Paul's and the Compensation Committee recommended to the Board of Directors, and the Board of Directors determined to modify Mr. Marc Zandman's employment arrangements such that upon any termination (other than for cause) after attaining age 62, the executive would be entitled to the same payments and benefits he would have received if his respective employment was terminated by Vishay without cause or by the respective executive for good reason. These modifications were included in formal amendments signed on August 8, 2010. The expense associated with the modifications to the employment arrangements of Dr. Gerald Paul and Mr. Marc Zandman effectively represents a defined retirement benefit that will be recognized over the remaining service period of the individuals.

Non-U.S. Pension Plans

The Company provides pension and similar benefits to employees of certain non-U.S. subsidiaries consistent with local practices. Pension benefits earned are generally based on years of service and compensation during active employment.

Note 11 – Pensions and Other Postretirement Benefits (continued)

The following table sets forth a reconciliation of the benefit obligation, plan assets, and funded status related to U.S. and non-U.S. pension plans:

	December 31, 2013						December 31, 2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	355,065		$	282,448		$	322,527		$	243,966
Service cost		-			3,499			-			3,247
Interest cost		13,882			8,150			15,699			9,374
Plan amendments		-			23			-			67
Actuarial (gains) losses		(34,703	)		(5,134	)		35,467			29,957
Benefits paid		(18,871	)		(13,980	)		(18,628	)		(11,456	)
Currency translation		-			5,520			-			7,293
Benefit obligation at end of year	$	315,373		$	280,526		$	355,065		$	282,448

Change in plan assets:
Fair value of plan assets at beginning
of year	$	265,866		$	46,580		$	239,045			35,544
Actual return on plan assets		31,018			2,482			27,763			2,795
Company contributions		17,620			14,781			17,686			17,905
Benefits paid		(18,871	)		(13,980	)		(18,628	)		(11,456	)
Currency translation		-			(1,004	)		-			1,792
Fair value of plan assets at end of year	$	295,633		$	48,859		$	265,866		$	46,580

Funded status at end of year	$	(19,740	)	$	(231,667	)	$	(89,199	)	$	(235,868	)

The plan assets are stated at fair value. See Note 18 for further discussion of the valuation of the plan assets.

Amounts recognized in the consolidated balance sheet consist of the following:

	December 31, 2013						December 31, 2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Other assets	$	15,708		$	257		$	-		$	143
Accrued benefit liability - currrent		(51	)		(7,644	)		(83	)		(6,997	)
Accrued benefit liability - non-current		(35,397	)		(224,280	)		(89,116	)		(229,014	)
Accumulated other comprehensive loss		84,384			61,652			146,525			71,459
	$	64,644		$	(170,015	)	$	57,326		$	(164,409	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2013				December 31, 2012
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Unrecognized net actuarial loss	$	83,161	$	61,652	$	144,324	$	71,459
Unamortized prior service cost		1,223		-		2,201		-
	$	84,384	$	61,652	$	146,525	$	71,459

The following table sets forth additional information regarding the projected and accumulated benefit obligations:

	December 31, 2013				December 31, 2012
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Accumulated benefit obligation, all plans	$	315,373	$	260,558	$	355,065	$	261,557

Plans for which the accumulated benefit
obligation exceeds plan assets:
Projected benefit obligation	$	35,448	$	251,569	$	355,065	$	255,772
Accumulated benefit obligation		35,448		238,419		355,065		240,816
Fair value of plan assets		-		21,356		265,866		20,436

The following table sets forth the components of net periodic pension cost:

	Years ended December 31,
	2013						2012						2011
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Service cost net of employee contributions	$	-		$	3,499		$	-		$	3,247		$	-		$	3,197
Interest cost		13,882			8,150			15,699			9,374			16,332			10,366
Expected return on plan assets		(19,124	)		(2,084	)		(18,972	)		(1,667	)		(19,082	)		(1,651	)
Amortization of actuarial losses		14,566			3,407			12,960			1,681			9,006			993
Amortization of prior service cost		978			(12	)		2,200			60			2,361			531
Curtailment and settlement losses (gains)		-			959			-			-			148			-
Net periodic benefit cost	$	10,302		$	13,919		$	11,887		$	12,695		$	8,765		$	13,436

Note 11 – Pensions and Other Postretirement Benefits (continued)

See Note 10 for the pretax, tax effect and after tax amounts included in other comprehensive income during the years ended December 31, 2013, 2012, and 2011. The estimated actuarial items for the defined benefit pensions plans that will be amortized from accumulated other comprehensive loss into net periodic pension cost during 2014 is $9,900.

The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years:

	2013						2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		5.00	%		3.11	%		4.00	%		3.04	%
Rate of compensation increase		0.00	%		1.99	%		0.00	%		1.48	%

The following weighted average assumptions were used to determine the net periodic pension costs for the years ended December 31, 2013 and 2012:

	Years ended December 31,
	2013						2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		4.00	%		3.04	%		5.00	%		3.96	%
Rate of compensation increase		0.00	%		1.48	%		0.00	%		2.31	%
Expected return on plan assets		7.25	%		4.44	%		8.00	%		4.47	%

The plans' expected return on assets is based on management's expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, advice from pension consultants and investment advisors, and current economic and capital market conditions.

The investment mix between equity securities and fixed income securities is based upon achieving a desired return, balancing higher return, more volatile equity securities, and lower return, less volatile fixed income securities. The Company's U.S. defined benefit plans are invested in diversified portfolios of public-market equity and fixed income securities. Investment allocations are made across a range of markets, industry sectors, capitalization sizes, and, in the case of fixed income securities, maturities and credit quality. The target allocation has historically been approximately 60% invested in equity securities and 40% invested in fixed income securities. Based on market interest rate conditions and the current market value of the plan assets at December 31, 2013, our qualified defined benefit plan in the U.S. is fully-funded. Accordingly, we have revised the asset allocation strategy for this plan to further reduce risk and now have set the target allocation at approximately 20% of the assets invested in equity securities and 80% invested in fixed income securities. The Company is evaluating options to further reduce the risk associated with its pension obligations. The Company's non-U.S. defined benefit plan investments are based on local laws and customs. Most plans invest in cash and local government fixed income securities, although plans in certain countries have investments in equity securities. The plans do not invest in securities of Vishay or its subsidiaries. Negative investment returns could ultimately affect the funded status of the plans, requiring additional cash contributions. See Note 18 for further information on the fair value of the plan assets by asset category.

Note 11 – Pensions and Other Postretirement Benefits (continued)

Estimated future benefit payments are as follows:

	U.S. Plans		Non-U.S. Plans

2014	$	19,128	$	14,249
2015		19,451		14,082
2016		19,780		14,501
2017		26,378		16,769
2018		21,926		15,292
2019-2023		109,815		90,491

The Company anticipates making contributions to U.S. defined benefit pension plans of between $15,000 and $20,000 in 2014.

The Company's anticipated 2014 contributions for non-U.S. defined benefit pension plans will approximate the expected benefit payments disclosed above.

Note 11 – Pensions and Other Postretirement Benefits (continued)

Other Postretirement Benefits

In the U.S., the Company maintains unfunded non-pension postretirement plans, including medical benefits for certain executives and their surviving spouses, which are funded as costs are incurred. One of these plans was amended effective January 1, 2012, which reduced the benefit obligations of the Company. The Company also maintains two unfunded non-pension postretirement plans at two European subsidiaries.

The following table sets forth a reconciliation of the benefit obligation, plan assets, and accrued benefit cost related to U.S. and non-U.S. non-pension defined benefit postretirement plans:

	December 31, 2013						December 31, 2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	8,157		$	6,964		$	10,924		$	5,972
Service cost		111			299			106			253
Interest cost		314			257			366			286
Plan amendments		-			-			(3,297	)		-
Actuarial (gains) losses		(639	)		398			660			1,022
Benefits paid		(602	)		(740	)		(602	)		(704	)
Currency translation		-			326			-			135
Benefit obligation at end of year	$	7,341		$	7,504		$	8,157		$	6,964

Fair value of plan assets at end of year	$	-		$	-		$	-		$	-

Funded status at end of year	$	(7,341	)	$	(7,504	)	$	(8,157	)	$	(6,964	)

Amounts recognized in the consolidated balance sheet consist of the following:

	December 31, 2013						December 31, 2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Accrued benefit liability - current	$	(638	)	$	-		$	(637	)	$	-
Accrued benefit liability - non-current		(6,703	)		(7,504	)		(7,520	)		(6,964	)
Accumulated other comprehensive income		(5,782	)		1,246			(5,937	)		805
	$	(13,123	)	$	(6,258	)	$	(14,094	)	$	(6,159	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2013					December 31, 2012
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Unrecognized net actuarial gain	$	(2,301	)	$	1,246	$	(1,657	)	$	805
Unamortized prior service (credit) cost		(3,481	)		-		(4,280	)		-
	$	(5,782	)	$	1,246	$	(5,937	)	$	805

The following table sets forth the components of net periodic benefit cost:

	Years ended December 31,
	2013					2012					2011
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Service cost	$	111		$	299	$	106		$	253	$	77		$	275
Interest cost		314			257		366			286		547			282
Amortization of actuarial gains		4			8		(76	)		-		(315	)		-
Amortization of prior service credit		(798	)		-		(798	)		-		(431	)		-
Amortization of transition obligation		-			-		32			-		47			-
Net periodic benefit cost	$	(369	)	$	564	$	(370	)	$	539	$	(75	)	$	557

The estimated actuarial items for the other postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2014 are not material and approximate the amounts amortized in 2013.

The following weighted average assumptions were used to determine benefit obligations at December 31 of the respective years:

	2013						2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Discount rate		5.00	%		3.44	%		4.00	%		3.80	%
Rate of compensation increase		0.00	%		3.19	%		0.00	%		3.20	%

The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2013 and 2012:

	Years ended December 31,
	2013						2012
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Discount rate		4.00	%		3.80	%		5.00	%		5.09	%
Rate of compensation increase		0.00	%		3.20	%		0.00	%		3.22	%

The impact of a one-percentage-point change in assumed health care cost trend rates on the net periodic benefit cost and postretirement benefit obligation is not material.

Note 11 – Pensions and Other Postretirement Benefits (continued)

Estimated future benefit payments are as follows:

	U.S. Plans		Non-U.S. Plans

2014	$	638	$	420
2015		720		267
2016		704		329
2017		693		453
2018		678		551
2019-2023		2,940		3,650

As the plans are unfunded, the Company's anticipated contributions for 2014 are equal to its estimated benefits payments.

Other Retirement Obligations

The Company participates in various other defined contribution and government-mandated retirement plans based on local law or custom. The Company periodically makes required contributions for certain of these plans, whereas other plans are unfunded retirement bonus plans which will be paid at the employee's retirement date. At December 31, 2013 and 2012, the consolidated balance sheets include $(14,017) and $(12,347), respectively, within accrued pension and other postretirement costs related to these plans.

Many of the Company's U.S. employees are eligible to participate in 401(k) savings plans, some of which provide for Company matching under various formulas. The Company's matching expense for the plans was $5,276, $4,230, and $4,985 for the years ended December 31, 2013, 2012, and 2011, respectively. No material amounts are included in the consolidated balance sheets at December 31, 2013 and 2012 related to unfunded 401(k) contributions.

Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2013, 2012, and 2011, these employees could defer a portion of their compensation until retirement, or elect shorter deferral periods. The Company maintains a liability within other noncurrent liabilities on its consolidated balance sheets related to these deferrals. The Company maintains a non-qualified trust, referred to as a "rabbi" trust, to fund payments under this plan. Rabbi trust assets are subject to creditor claims under certain conditions and are not the property of employees. Therefore, they are accounted for as other noncurrent assets. Assets held in trust related to the deferred compensation plan at December 31, 2013 and 2012 were approximately $14,093 and $12,310, respectively.

The Company is obligated to pay post-employment benefits to certain terminated employees related to acquisitions. The liabilities recorded for these obligations total $4,727 and $5,827 as of December 31, 2013 and 2012, respectively. Of these amounts, $1,358 and $1,498 are included in accrued liabilities as of December 31, 2013 and 2012, respectively, with the remaining amounts included in other noncurrent liabilities.