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,
	2014			2013

Included in "Other assets":
U.S. pension plans	$	12,964		$	15,708
Non-U.S. pension plans		212			257
Total included in other assets	$	13,176		$	15,965
Included in "Payroll and related expenses":
U.S. pension plans	$	(51	)	$	(51	)
Non-U.S. pension plans		(6,624	)		(7,644	)
U.S. other postretirement plans		(666	)		(638	)
Non-U.S. other postretirement plans		(349	)		-
Total included in payroll and related expenses	$	(7,690	)	$	(8,333	)
Accrued pension and other postretirement costs:
U.S. pension plans	$	(40,744	)	$	(35,397	)
Non-U.S. pension plans		(231,278	)		(224,280	)
U.S. other postretirement plans		(8,011	)		(6,703	)
Non-U.S. other postretirement plans		(6,934	)		(7,504	)
Other retirement obligations		(13,557	)		(14,017	)
Total accrued pension and other postretirement costs	$	(300,524	)	$	(287,901	)
Accumulated other comprehensive loss:
U.S. pension plans	$	88,474		$	84,384
Non-U.S. pension plans		88,076			61,652
U.S. other postretirement plans		(3,325	)		(5,782	)
Non-U.S. other postretirement plans		1,750			1,246
Total accumulated other comprehensive loss*	$	174,975		$	141,500

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

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 Income 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.

The Society of Actuaries Retirement Plans Experience Committee issued new mortality tables and a new mortality improvement scale in 2014. The new mortality tables and mortality improvement scale are based on a recent study of mortality experience in the United States, and reflect improved retiree longevity. The use of the new mortality tables and mortality improvement scale increased the Company's projected benefit obligations by approximately $24,000 and will increase future net periodic pension cost.

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.

Note 11 – Pensions and Other Postretirement Benefits (continued)

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.

During the third fiscal quarter of 2014, the Company executed two partial-settlement transactions to reduce the risk associated with its U.S. qualified pension obligations. These transactions included the purchase of annuity contracts for approximately 700 participants pursuant to an arrangement inherited in a past acquisition and a special limited-time voluntary lump-sum payment offer to certain former employees who were deferred vested participants of the plan not currently receiving periodic payments of their pension benefit. A total of 800 participants accepted the voluntary lump-sum offer. The plan is no longer obligated to pay any benefits to the 1,500 participants covered by these two settlement transactions. These former participants represented approximately 23% of the total participants prior to executing these transactions.

These transactions were funded entirely with plan assets and resulted in the recognition of non-cash settlement charges aggregating $15,588, representing previously unrecognized actuarial items. These non-cash charges are presented on a separate line in the consolidated statements of operations.

The Company continues to evaluate options to further reduce the risk associated with its pension obligations.

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 $21,757 and $18,678 at December 31, 2014 and 2013, 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.

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 $3,607 and $4,221 at December 31, 2014 and 2013, 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.

Note 11 – Pensions and Other Postretirement Benefits (continued)

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.

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, 2014						December 31, 2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	315,373		$	280,526		$	355,065		$	282,448
Service cost		-			3,275			-			3,499
Interest cost		13,821			8,555			13,882			8,150
Acquisitions		-			465			-			-
Plan amendments		-			-			-			23
Actuarial (gains) losses		50,584			40,021			(34,703	)		(5,134	)
Benefits paid		(18,940	)		(15,888	)		(18,871	)		(13,980	)
Curtailments and settlements		(59,363	)		(486	)		-			-
Currency translation		-			(29,622	)		-			5,520
Benefit obligation at end of year	$	301,475		$	286,846		$	315,373		$	280,526

Change in plan assets:
Fair value of plan assets at beginning of year	$	295,633		$	48,859		$	265,866			46,580
Actual return on plan assets		38,688			1,858			31,018			2,482
Acquisitions		-			10			-			-
Company contributions		17,626			17,015			17,620			14,781
Benefits paid		(18,940	)		(15,888	)		(18,871	)		(13,980	)
Curtailments and settlements		(59,363	)		(486	)		-			-
Currency translation		-			(2,212	)		-			(1,004	)
Fair value of plan assets at end of year	$	273,644		$	49,156		$	295,633		$	48,859

Funded status at end of year	$	(27,831	)	$	(237,690	)	$	(19,740	)	$	(231,667	)

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, 2014						December 31, 2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Other assets	$	12,964		$	212		$	15,708		$	257
Accrued benefit liability - currrent		(51	)		(6,624	)		(51	)		(7,644	)
Accrued benefit liability - non-current		(40,744	)		(231,278	)		(35,397	)		(224,280	)
Accumulated other comprehensive loss		88,474			88,076			84,384			61,652
	$	60,643		$	(149,614	)	$	64,644		$	(170,015	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2014				December 31, 2013
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Unrecognized net actuarial loss	$	87,195	$	88,076	$	83,161	$	61,652
Unamortized prior service cost		1,279		-		1,223		-
	$	88,474	$	88,076	$	84,384	$	61,652

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

	December 31, 2014				December 31, 2013
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Accumulated benefit obligation, all plans	$	301,475	$	269,069	$	315,373	$	260,558

Plans for which the accumulated benefit
obligation exceeds plan assets:
Projected benefit obligation	$	40,795	$	272,977	$	35,448	$	251,569
Accumulated benefit obligation		40,795		261,996		35,448		238,419
Fair value of plan assets		-		37,634		-		21,356

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

	Years ended December 31,
	2014						2013						2012
	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	$	-		$	3,275		$	-		$	3,499		$	-		$	3,247
Interest cost		13,821			8,555			13,882			8,150			15,699			9,374
Expected return on plan assets		(14,892	)		(2,109	)		(19,124	)		(2,084	)		(18,972	)		(1,667	)
Amortization of actuarial losses		7,166			2,700			14,566			3,407			12,960			1,681
Amortization of prior service cost (credit)		(56	)		(5	)		978			(12	)		2,200			60
Curtailment and settlement losses		15,588			1,137			-			959			-			-
Net periodic pension cost	$	21,627		$	13,553		$	10,302		$	13,919		$	11,887		$	12,695

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, 2014, 2013, and 2012. 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 $13,700.

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

	2014						2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		4.00	%		2.15	%		5.00	%		3.11	%
Rate of compensation increase		0.00	%		1.97	%		0.00	%		1.99	%

The following weighted average assumptions were used to determine the net periodic pension costs for the years ended December 31, 2014 and 2013:

	Years ended December 31,
	2014						2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		4.85	%		3.11	%		4.00	%		3.04	%
Rate of compensation increase		0.00	%		1.99	%		0.00	%		1.48	%
Expected return on plan assets		5.29	%		3.85	%		7.25	%		4.44	%

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 qualified U.S. pension plan was remeasured during 2014 concurrent with the two partial settlement transactions.

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 is adjusted based on the funded status of the plan and the duration of the obligation. Based on market interest rate conditions and the current market value of the plan assets at December 31, 2014, the qualified defined benefit plan in the U.S. is fully-funded. Accordingly, the target asset allocation strategy for this plan is approximately 10% of the assets invested in equity securities and 90% 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.

Estimated future benefit payments are as follows:

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

2015	$	15,691	$	14,140
2016		16,037		14,230
2017		16,420		16,247
2018		23,084		14,968
2019		18,683		16,036
2020-2024		91,834		80,418

The Company anticipates making contributions to U.S. defined benefit pension plans of between $15,000 and $20,000 in 2015.

The Company's anticipated 2015 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, 2014						December 31, 2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	7,341		$	7,504		$	8,157		$	6,964
Service cost		115			307			111			299
Interest cost		351			244			314			257
Plan amendments		-			-			-			-
Actuarial (gains) losses		1,492			752			(639	)		398
Benefits paid		(622	)		(565	)		(602	)		(740	)
Currency translation		-			(959	)		-			326
Benefit obligation at end of year	$	8,677		$	7,283		$	7,341		$	7,504

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

Funded status at end of year	$	(8,677	)	$	(7,283	)	$	(7,341	)	$	(7,504	)

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

	December 31, 2014						December 31, 2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Accrued benefit liability - current	$	(666	)	$	(349	)	$	(638	)	$	-
Accrued benefit liability - non-current		(8,011	)		(6,934	)		(6,703	)		(7,504	)
Accumulated other comprehensive income		(3,325	)		1,750			(5,782	)		1,246
	$	(12,002	)	$	(5,533	)	$	(13,123	)	$	(6,258	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2014					December 31, 2013
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Unrecognized net actuarial loss (gain)	$	(668	)	$	1,750	$	(2,301	)	$	1,246
Unamortized prior service (credit) cost		(2,657	)		-		(3,481	)		-
	$	(3,325	)	$	1,750	$	(5,782	)	$	1,246

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

	Years ended December 31,
	2014					2013					2012
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Service cost	$	115		$	307	$	111		$	299	$	106		$	253
Interest cost		351			244		314			257		366			286
Amortization of actuarial (gains) losses		(140	)		38		4			8		(76	)		-
Amortization of prior service credit		(824	)		-		(798	)		-		(798	)		-
Amortization of transition obligation		-			-		-			-		32			-
Net periodic benefit cost (benefit)	$	(498	)	$	589	$	(369	)	$	564	$	(370	)	$	539

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:

	2014						2013
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Discount rate		4.00	%		2.25	%		5.00	%		3.44	%
Rate of compensation increase		0.00	%		2.87	%		0.00	%		3.19	%

The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2014 and 2013:

	Years ended December 31,
	2014						2013
	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 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

2015	$	666	$	349
2016		706		235
2017		722		348
2018		712		356
2019		695		544
2020-2024		3,088		3,136

As the plans are unfunded, the Company's anticipated contributions for 2015 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, 2014 and 2013, the consolidated balance sheets include $13,557 and $14,017, 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 $5,285, $5,276, and $4,230 for the years ended December 31, 2014, 2013, and 2012, respectively. No material amounts are included in the consolidated balance sheets at December 31, 2014 and 2013 related to unfunded 401(k) contributions.

Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2014, 2013, and 2012, 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, 2014 and 2013 were approximately $14,906 and $14,093, respectively.