13. Pension and Severance Plans

Foreign Defined Benefit Pension Plans

Our subsidiaries in Japan, the Philippines and Taiwan sponsor defined benefit pension plans that cover substantially all of their respective employees who are not covered by statutory plans. Charges to expense are based upon actuarial analyses. The components of net periodic pension cost for these defined benefit plans are as follows:



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Components of net periodic pension cost and total pension expense:
Service cost	$	1,399		$	1,528		$	2,873		$	3,229
Interest cost	746			802			1,521			1,622
Expected return on plan assets	(883		)	(787		)	(1,794		)	(1,570		)
Amortization of transition obligation	2			2			4			4
Amortization of prior service cost	49			54			98			125
Recognized actuarial loss	33			52			66			103
Net periodic pension cost	1,346			1,651			2,768			3,513
Curtailment loss	—			—			—			1,089
Settlement gain	—			—			—			(100		)
Total pension expense	$	1,346		$	1,651		$	2,768		$	4,502

During the six months ended June 30, 2012, we recognized net curtailment and settlement losses of $1.0 million, resulting from the remeasurement of our defined benefit plan in Japan due to reductions in workforce (Note 18).

For the three and six months ended June 30, 2013, we contributed $0.1 million and $0.2 million to the defined benefit pension plans, respectively. We expect to contribute approximately $2.1 million to the pension plans during the remainder of 2013. For the three and six months ended June 30, 2012, we contributed $0.1 million and $0.2 million to the defined benefit pension plans, respectively.

Korean Severance Plan

Our subsidiary in Korea participates in an accrued severance plan that covers employees with at least one year of service. To the extent eligible employees are terminated, our subsidiary in Korea would be required to make lump-sum severance payments on behalf of these eligible employees based on their length of service, seniority and rate of pay at the time of termination. Accrued severance benefits are estimated assuming all eligible employees were to terminate their employment at the balance sheet date. Our contributions to the National Pension Plan of the Republic of Korea are deducted from accrued severance benefit liabilities.

The provision recorded for severance benefits for the three and six months ended June 30, 2013, was $7.3 million and $12.8 million, respectively. The provision recorded for severance benefits for the three and six months ended June 30, 2012, was $7.2 million and $7.6 million, respectively. The balance of our Korean severance obligation consists of the following:



	June 30, 2013		December 31, 2012
	(In thousands)
Current (Accrued expenses)	$	9,468	$	9,516
Non-current (Pension and severance obligations)	115,141		116,997
Total Korean severance obligation	$	124,609	$	126,513