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,
	2018			2017

Included in "Other assets":
Non-U.S. pension plans	$	356		$	347
Total included in other assets	$	356		$	347
Included in "Payroll and related expenses":
U.S. pension plans	$	(35	)	$	(37	)
Non-U.S. pension plans		(7,228	)		(7,308	)
U.S. other postretirement plans		(703	)		(705	)
Non-U.S. other postretirement plans		(181	)		(453	)
Total included in payroll and related expenses	$	(8,147	)	$	(8,503	)
Accrued pension and other postretirement costs:
U.S. pension plans	$	(38,134	)	$	(39,880	)
Non-U.S. pension plans		(194,266	)		(213,596	)
U.S. other postretirement plans		(6,291	)		(6,928	)
Non-U.S. other postretirement plans		(7,772	)		(7,445	)
Other retirement obligations		(14,521	)		(13,852	)
Total accrued pension and other postretirement costs	$	(260,984	)	$	(281,701	)
Accumulated other comprehensive loss:
U.S. pension plans	$	5,501		$	7,731
Non-U.S. pension plans		76,698			88,398
U.S. other postretirement plans		(1,257	)		(1,101	)
Non-U.S. other postretirement plans		2,044			1,916
Total accumulated other comprehensive loss*	$	82,986		$	96,944

* - 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 2018 and 2017, 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 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 $22,409 and $24,505 at December 31, 2018 and 2017, 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 $1,199 and $1,789 at December 31, 2018 and 2017, 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, 2018						December 31, 2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	39,917		$	291,162		$	38,914		$	266,427
Service cost		-			3,822			-			3,725
Interest cost		1,484			4,793			1,643			4,866
Plan amendments		-			125			-			686
Actuarial (gains) losses		(1,431	)		(1,311	)		1,149			3,019
Benefits paid		(1,801	)		(14,397	)		(1,789	)		(17,921	)
Currency translation		-			(12,236	)		-			30,360
Benefit obligation at end of year	$	38,169		$	271,958		$	39,917		$	291,162

Change in plan assets:
Fair value of plan assets at beginning of year	$	-		$	70,605		$	-			66,090
Actual return on plan assets		-			1,412			-			1,608
Company contributions		1,801			16,105			1,789			16,120
Benefits paid		(1,801	)		(14,397	)		(1,789	)		(17,921	)
Currency translation		-			(2,905	)		-			4,708
Fair value of plan assets at end of year	$	-		$	70,820		$	-		$	70,605

Funded status at end of year	$	(38,169	)	$	(201,138	)	$	(39,917	)	$	(220,557	)

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

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

	December 31, 2018						December 31, 2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Other assets	$	-		$	356		$	-		$	347
Accrued benefit liability - current		(35	)		(7,228	)		(37	)		(7,308	)
Accrued benefit liability - non-current		(38,134	)		(194,266	)		(39,880	)		(213,596	)
Accumulated other comprehensive loss		5,501			76,698			7,731			88,398
	$	(32,668	)	$	(124,440	)	$	(32,186	)	$	(132,159	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2018				December 31, 2017
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Unrecognized net actuarial loss	$	4,717	$	76,254	$	6,804	$	87,896
Unamortized prior service cost		784		444		927		502
	$	5,501	$	76,698	$	7,731	$	88,398

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

	December 31, 2018				December 31, 2017
	U.S. Plans		Non-U.S. Plans		U.S. Plans		Non-U.S. Plans

Accumulated benefit obligation, all plans	$	38,169	$	258,244	$	39,917	$	270,914

Plans for which the accumulated benefit obligation exceeds plan assets:
Projected benefit obligation	$	38,169	$	247,066	$	39,917	$	277,615
Accumulated benefit obligation		38,169		235,167		39,917		262,779
Fair value of plan assets		-		45,818		-		57,727

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

	Years ended December 31,
	2018					2017					2016
	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	$	-	$	3,822		$	-	$	3,725		$	-		$	3,291
Interest cost		1,484		4,793			1,643		4,866			11,788			5,475
Expected return on plan assets		-		(1,889	)		-		(2,072	)		(11,302	)		(2,117	)
Amortization of actuarial losses		656		6,196			587		6,179			6,513			4,733
Amortization of prior service cost (credit)		144		318			144		150			144			261
Curtailment and settlement losses		-		1,111			-		1,360			79,321			841
Net periodic pension cost	$	2,284	$	14,351		$	2,374	$	14,208		$	86,464		$	12,484

Net periodic benefit cost in 2018 and 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, 2018, 2017, and 2016. 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 2019 is $6,300.

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

	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans
Discount rate		4.50	%		1.96	%		3.75	%		1.80	%
Rate of compensation increase		0.00	%		2.17	%		0.00	%		2.10	%

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

	Years ended December 31,
	2018						2017
	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	%
Expected return on plan assets		0.00	%		2.95	%		0.00	%		2.90	%

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

2019	$	1,859	$	18,612
2020		1,829		15,113
2021		8,364		15,319
2022		3,153		17,300
2023		3,159		16,327
2024-2028		17,122		81,505

The Company's anticipated 2019 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, 2018						December 31, 2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Change in benefit obligation:
Benefit obligation at beginning of year	$	7,633		$	7,898		$	7,647		$	6,625
Service cost		137			288			131			273
Interest cost		273			114			311			103
Actuarial (gains) losses		(344	)		327			257			312
Benefits paid		(705	)		(303	)		(713	)		(349	)
Currency translation		-			(371	)		-			934
Benefit obligation at end of year	$	6,994		$	7,953		$	7,633		$	7,898

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

Funded status at end of year	$	(6,994	)	$	(7,953	)	$	(7,633	)	$	(7,898	)

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

	December 31, 2018						December 31, 2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Accrued benefit liability - current	$	(703	)	$	(181	)	$	(705	)	$	(453	)
Accrued benefit liability - non-current		(6,291	)		(7,772	)		(6,928	)		(7,445	)
Accumulated other comprehensive income		(1,257	)		2,044			(1,101	)		1,916
	$	(8,251	)	$	(5,909	)	$	(8,734	)	$	(5,982	)

Note 11 – Pensions and Other Postretirement Benefits (continued)

Actuarial items consist of the following:

	December 31, 2018					December 31, 2017
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Unrecognized net actuarial loss (gain)	$	(1,257	)	$	2,044	$	(953	)	$	1,916
Unamortized prior service (credit) cost		-			-		(148	)		-
	$	(1,257	)	$	2,044	$	(1,101	)	$	1,916

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

	Years ended December 31,
	2018					2017					2016
	U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans		U.S. Plans			Non-U.S. Plans

Service cost	$	137		$	288	$	131		$	273	$	126		$	268
Interest cost		273			114		311			103		340			143
Amortization of actuarial (gains) losses		(39	)		105		(93	)		76		(30	)		68
Amortization of prior service credit		(148	)		-		(837	)		-		(837	)		-
Net periodic benefit cost (benefit)	$	223		$	507	$	(488	)	$	452	$	(401	)	$	479

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 2019 are not material.

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

	2018						2017
	U.S. Plans			Non-U.S. Plans			U.S. Plans			Non-U.S. Plans

Discount rate		4.50	%		1.60	%		3.75	%		1.50	%
Rate of compensation increase		0.00	%		3.18	%		0.00	%		2.88	%

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

	Years ended December 31,
	2018						2017
	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 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

2019	$	703	$	181
2020		671		387
2021		661		337
2022		633		776
2023		294		281
2024-2028		2,244		3,183

As the plans are unfunded, the Company's anticipated contributions for 2019 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, 2018 and 2017, the accompanying consolidated balance sheets include $14,521 and $13,852, 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 $6,353, $5,843, and $5,039 for the years ended December 31, 2018, 2017, and 2016, respectively. No material amounts are included in the accompanying consolidated balance sheets at December 31, 2018 and 2017 related to unfunded 401(k) contributions.

Certain key employees participate in a deferred compensation plan. During the years ended December 31, 2018, 2017, and 2016, 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, 2018 and 2017 were approximately $18,162 and $18,958, respectively.