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 accompanying consolidated balance sheets associated with these various retirement benefit plans:

	December 31,
	2017			2016

Included in "Other assets":
Non-U.S. pension plans	$	347		$	248
Total included in other assets	$	347		$	248
Included in "Payroll and related expenses":
U.S. pension plans	$	(37	)	$	(35	)
Non-U.S. pension plans		(7,308	)		(6,405	)
U.S. other postretirement plans		(705	)		(717	)
Non-U.S. other postretirement plans		(453	)		(322	)
Total included in payroll and related expenses	$	(8,503	)	$	(7,479	)
Accrued pension and other postretirement costs:
U.S. pension plans	$	(39,880	)	$	(38,879	)
Non-U.S. pension plans		(213,596	)		(194,180	)
U.S. other postretirement plans		(6,928	)		(6,930	)
Non-U.S. other postretirement plans		(7,445	)		(6,303	)
Other retirement obligations		(13,852	)		(11,497	)
Total accrued pension and other postretirement costs	$	(281,701	)	$	(257,789	)
Accumulated other comprehensive loss:
U.S. pension plans	$	7,731		$	7,313
Non-U.S. pension plans		88,398			82,360
U.S. other postretirement plans		(1,101	)		(2,287	)
Non-U.S. other postretirement plans		1,916			1,474
Total accumulated other comprehensive loss*	$	96,944		$	88,860

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

Defined Benefit Pension Plans

U.S. Pension Plans

The Company maintained several defined benefit pension plans which covered most full-time U.S. employees. These included 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 updated mortality improvement scales in 2017 and 2016, which did not have a material effect on the Company's projected benefit obligations or future net periodic pension cost.

Note 11 – Pensions and Other Postretirement Benefits (continued)

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 could participate in the plan, no further participant contributions were required or permitted, and no further benefits accrued after December 31, 2008. 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 were merged into the Vishay Retirement Plan.

In the second fiscal quarter of 2015, the Company began the process of terminating the Vishay Retirement Plan. During the third fiscal quarter of 2016, the Company received a favorable determination letter from the U.S. Internal Revenue Service ("IRS"), and met all other applicable IRS and Pension Benefit Guarantee Corporation requirements. The termination and settlement occurred in December 2016. Plan participants had their benefits either converted into a lump sum cash payment or an annuity contract placed with an insurance carrier. The settlement resulted in a non-cash charge of $79,321 to recognize the unrecognized actuarial items related to the Vishay Retirement Plan recorded in 2016 in accumulated other comprehensive income. These non-cash charges are presented on a separate line in the accompanying consolidated statements of operations. The termination and settlement required no additional cash contributions. Excess plan assets were transferred to a qualified defined contribution retirement plan, and are presented on the accompanying reconciliation as a negative Company contribution.

A final reconciliation of participant data subject to the settlement annuity contract was completed during the second fiscal quarter of 2017. The final annuity pricing adjustment and related items did not have a material impact on the Company's financial results.

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 was 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 $24,505 and $22,896 at December 31, 2017 and 2016, 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 $1,789 and $2,389 at December 31, 2017 and 2016, respectively.

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, 2017						December 31, 2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	38,914		$	266,427		$	274,122		$	260,554
Service cost		-			3,725			-			3,291
Interest cost		1,643			4,866			11,788			5,475
Plan amendments		-			686			-			291
Transfer from equity affiliate		-			-			-			358
Actuarial (gains) losses		1,149			3,019			19,916			17,202
Benefits paid		(1,789	)		(17,921	)		(15,625	)		(12,607	)
Curtailments and settlements		-			-			(251,287	)		-
Currency translation		-			30,360			-			(8,137	)
Benefit obligation at end of year	$	39,917		$	291,162		$	38,914		$	266,427

Change in plan assets:
Fair value of plan assets at beginning of year	$	-		$	66,090		$	258,092			51,263
Actual return on plan assets		-			1,608			14,068			2,588
Transfer from equity affiliate		-			-			-			358
Company contributions		1,789			16,120			(5,248	)		27,311
Benefits paid		(1,789	)		(17,921	)		(15,625	)		(12,607	)
Curtailments and settlements		-			-			(251,287	)		-
Currency translation		-			4,708			-			(2,823	)
Fair value of plan assets at end of year	$	-		$	70,605		$	-		$	66,090

Funded status at end of year	$	(39,917	)	$	(220,557	)	$	(38,914	)	$	(200,337	)

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 accompanying consolidated balance sheets consist of the following:

	December 31, 2017						December 31, 2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Other assets	$	-		$	347		$	-		$	248
Accrued benefit liability - current		(37	)		(7,308	)		(35	)		(6,405	)
Accrued benefit liability - non-current		(39,880	)		(213,596	)		(38,879	)		(194,180	)
Accumulated other comprehensive loss		7,731			88,398			7,313			82,360
	$	(32,186	)	$	(132,159	)	$	(31,601	)	$	(117,977	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2017				December 31, 2016
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Unrecognized net actuarial loss	$	6,804	$	87,896	$	6,241	$	82,360
Unamortized prior service cost		927		502		1,072		-
	$	7,731	$	88,398	$	7,313	$	82,360

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

	December 31, 2017				December 31, 2016
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Accumulated benefit obligation, all plans	$	39,917	$	270,914	$	38,914	$	247,838

Plans for which the accumulated benefit obligation exceeds plan assets:
Projected benefit obligation	$	39,917	$	277,615	$	38,914	$	253,390
Accumulated benefit obligation		39,917		262,779		38,914		240,793
Fair value of plan assets		-		57,727		-		56,649

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

	Years ended December 31,
	2017					2016						2015
	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	$	-	$	3,725		$	-		$	3,291		$	-		$	3,265
Interest cost		1,643		4,866			11,788			5,475			11,657			5,636
Expected return on plan assets		-		(2,072	)		(11,302	)		(2,117	)		(13,566	)		(1,798	)
Amortization of actuarial losses		587		6,179			6,513			4,733			8,175			5,131
Amortization of prior service cost (credit)		144		150			144			261			64			(282	)
Curtailment and settlement losses		-		1,360			79,321			841			-			452
Net periodic pension cost	$	2,374	$	14,208		$	86,464		$	12,484		$	6,330		$	12,404

Net periodic benefit cost in 2017 was significantly impacted by the termination and settlement of the Company's qualified U.S. pension plan in December 2016. The settlement resulted in the immediate recognition of previously unrecognized actuarial items related to the plan in 2016 that were recorded in accumulated other comprehensive income and were being amortized into net periodic pension cost.

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, 2017, 2016, and 2015. 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 2017 is $7,300.

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

	2017						2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		3.75	%		1.80	%		4.25	%		1.76	%
Rate of compensation increase		0.00	%		2.10	%		0.00	%		2.12	%

The following weighted average assumptions were used to determine the net periodic pension costs:

	Years ended December 31,
	2017						2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		4.25	%		1.76	%		4.50	%		2.30	%
Rate of compensation increase		0.00	%		2.12	%		0.00	%		1.99	%
Expected return on plan assets		0.00	%		2.90	%		4.50	%		3.38	%

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 and is adjusted for the expected duration of the obligation and the funded status of the plan. Investment allocations are made across a range of securities, maturities and credit quality. 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

2018	$	1,802	$	17,397
2019		1,809		16,418
2020		7,880		15,958
2021		3,038		15,773
2022		3,006		17,962
2023-2027		16,904		84,438

The Company's anticipated 2017 contributions for 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. 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, 2017						December 31, 2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	7,647		$	6,625		$	7,909		$	6,488
Service cost		131			273			126			268
Interest cost		311			103			340			143
Plan curtailments and settlements		-			-			-			-
Actuarial (gains) losses		257			312			(25	)		171
Benefits paid		(713	)		(349	)		(703	)		(221	)
Currency translation		-			934			-			(224	)
Benefit obligation at end of year	$	7,633		$	7,898		$	7,647		$	6,625

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

Funded status at end of year	$	(7,633	)	$	(7,898	)	$	(7,647	)	$	(6,625	)

Amounts recognized in the accompanying consolidated balance sheets consist of the following:

	December 31, 2017						December 31, 2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Accrued benefit liability - current	$	(705	)	$	(453	)	$	(717	)	$	(322	)
Accrued benefit liability - non-current		(6,928	)		(7,445	)		(6,930	)		(6,303	)
Accumulated other comprehensive income		(1,101	)		1,916			(2,287	)		1,474
	$	(8,734	)	$	(5,982	)	$	(9,934	)	$	(5,151	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2017					December 31, 2016
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Unrecognized net actuarial loss (gain)	$	(953	)	$	1,916	$	(1,303	)	$	1,474
Unamortized prior service (credit) cost		(148	)		-		(984	)		-
	$	(1,101	)	$	1,916	$	(2,287	)	$	1,474

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

	Years ended December 31,
	2017					2016					2015
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Service cost	$	131		$	273	$	126		$	268	$	121		$	273
Interest cost		311			103		340			143		333			147
Amortization of actuarial (gains) losses		(93	)		76		(30	)		68		90			76
Amortization of prior service credit		(837	)		-		(837	)		-		(837	)		-
Net periodic benefit cost (benefit)	$	(488	)	$	452	$	(401	)	$	479	$	(293	)	$	496

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 2018 are not material.

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

	2017						2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Discount rate		3.75	%		1.50	%		4.25	%		1.50	%
Rate of compensation increase		0.00	%		2.88	%		0.00	%		2.58	%

The following weighted average assumptions were used to determine the net periodic benefit costs:

	Years ended December 31,
	2017						2016
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Discount rate		4.25	%		1.50	%		4.50	%		2.31	%
Rate of compensation increase		0.00	%		2.58	%		0.00	%		2.69	%

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

2018	$	705	$	453
2019		703		338
2020		685		592
2021		660		494
2022		632		725
2023-2027		2,472		3,161

As the plans are unfunded, the Company's anticipated contributions for 2017 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, 2017 and 2016, the accompanying consolidated balance sheets include $13,852 and $11,497, respectively, within accrued pension and other postretirement costs related to these plans.

The Company's U.S. employees are eligible to participate in a 401(k) savings plan, which provides for Company matching contributions. The Company's matching expense for the plans was $5,843, $5,039, and $5,369 for the years ended December 31, 2017, 2016, and 2015, respectively. No material amounts are included in the accompanying consolidated balance sheets at December 31, 2017 and 2016 related to unfunded 401(k) contributions.

Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2017, 2016, and 2015, 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, 2017 and 2016 were approximately $18,958 and $16,632, respectively.