Pension and Severance Plans

Foreign Pension Plans

Our Philippine, Taiwanese and Japanese subsidiaries 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,
	2011			2010			2011			2010
	(In thousands)
Components of net periodic pension cost:
Service cost	$	1,694		$	1,499		$	4,964		$	4,403
Interest cost	937			944			2,767			2,786
Expected return on plan assets	(897		)	(591		)	(2,659		)	(1,744		)
Amortization of transitional obligation	1			3			5			9
Amortization of prior service cost	67			72			223			212
Recognized actuarial loss	21			7			66			20
Net periodic pension cost	1,823			1,934			5,366			5,686
Curtailments	769			—			769			—
Settlements	168			—			168			—
Total pension expense	$	2,760		$	1,934		$	6,303		$	5,686

During the nine months ended September 30, 2011, we recognized curtailment and settlement losses of $0.9 million resulting from the remeasurement of our Philippine defined benefit plan due to reductions in workforce at that location (See Note 19).

For the three and nine months ended September 30, 2011, we contributed $3.2 million and $3.4 million to the pension plans, respectively. We expect to contribute approximately $0.2 million to the pension plans during the remainder of 2011. For the three and nine months ended September 30, 2010, we contributed $0.1 million and $7.6 million to the pension plans, respectively.

Korean Severance Plan

Our Korean subsidiary participates in an accrued severance plan that covers employees and directors with at least one year of service. Eligible employees are entitled to receive a lump-sum payment upon termination of employment, based on their length of service, seniority and average monthly wages 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 months ended September 30, 2011 and 2010 was $8.1 million and $6.4 million, respectively. The provision recorded for severance benefits for the nine months ended September 30, 2011 and 2010 was $21.6 million and $17.0 million, respectively. The balance recorded in non-current pension and severance obligations for accrued severance at our Korean subsidiary was $93.9 million and $82.5 million at September 30, 2011 and December 31, 2010, respectively. Total pension and severance obligations at September 30, 2011 and December 31, 2010 were $100.8 million and $88.6 million, respectively.