16. Pension and Severance Plans

Foreign Defined Benefit Pension Plans

Our subsidiaries in Japan, Malaysia, 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 September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands)
Service cost	$	1,101		$	1,500		$	3,974		$	4,373
Interest cost	748			842			2,321			2,363
Expected return on plan assets	(782		)	(852		)	(2,329		)	(2,646		)
Amortization of transition obligation	—			3			75			7
Amortization of prior service cost	9			50			108			148
Recognized actuarial loss	17			33			50			99
Net periodic pension cost	1,093			1,576			4,199			4,344
Curtailment gain	—			(148		)	—			(148		)
Settlement gain	—			(209		)	—			(209		)
Total pension expense	$	1,093		$	1,219		$	4,199		$	3,987

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 nine months ended September 30, 2014, was $5.8 million and $12.6 million, respectively. The provision recorded for severance benefits for the three and nine months ended September 30, 2013, was $6.9 million and $19.8 million, respectively. The balance of our Korean severance obligation consists of the following:



	September 30, 2014		December 31, 2013
	(In thousands)
Current (Accrued expenses)	$	11,189	$	11,197
Non-current (Pension and severance obligations)	139,168		133,935
Total Korean severance obligation	$	150,357	$	145,132