Employee Benefit Plans

Pension Plan

With the acquisition of CES on November 4, 2016, the Company assumed a pension plan (the "Plan") for its Swiss employees, which is administered by an independent pension fund. The Plan is mandated by Swiss law and meets the criteria for a defined benefit plan under ASC 715, Compensation—Retirement Benefits (“ASC 715”), since participants of the Plan are entitled to a defined rate of return on contributions made. The independent pension fund is a multi-employer plan with unrestricted joint liability for all participating companies for which the Plan’s overfunding or underfunding is allocated to each participating company based on an allocation key determined by the Plan.

The Company recognizes a net asset or liability for the Plan equal to the difference between the projected benefit obligation of the Plan and the fair value of the Plan’s assets as required by ASC 715. The funded status may vary from year to year due to changes in the fair value of the Plan’s assets and variations on the underlying assumptions of the projected benefit obligation of the Plan.

On January 1, 2017, the Company changed pension providers. The Company's results contain the effects of the change in pension provider as prior service costs. These prior service costs will be amortized from AOCI to net periodic benefit costs over approximately 10 years.

On January 1, 2019, the independent pension fund will change the conversion rate for accumulated retirement savings. The Company’s results contain the effects of this change in conversion rates by the independent pension fund as prior service costs. These prior service costs will be amortized from AOCI to net periodic benefit costs over approximately 10 years.

At June 30, 2018, the accumulated benefit obligation of the Plan equals the fair value of the Plan's assets. The Plan's funded status at June 30, 2018 and 2017 was a net liability of $6,098 and $6,601, respectively, which is recorded in other non-current liabilities on the consolidated balance sheets. The Company recorded net gains of $354 and $220 in AOCI during the year ended June 30, 2018 and 2017, respectively. Total employer contributions to the Plan were $596 during the year ended June 30, 2018, and the Company's total expected employer contributions to the Plan during fiscal 2019 are $642.

The following table reflects the total pension benefits expected to be paid from the Plan, which is funded from contributions by participants and the Company.



	Year Ended June 30,
2019	$	603
2020	892
2021	573
2022	720
2023	1,012
Thereafter (next 5 years)	3,944
Total	$	7,744

The following table outlines the components of net periodic benefit cost of the Plan for the year ended June 30, 2018 and 2017:



	Year Ended June 30,
	2018			2017
Service cost	$	835		$	557
Interest cost	121			73
Expected return on assets	(162		)	(105		)
Amortization of prior service cost	39			20
Net periodic benefit cost	$	833		$	545

The following table reflects the related actuarial assumptions used to determine net periodic benefit cost of the Plan for the year ended June 30, 2018 and 2017:



	Year Ended June 30,
	2018		2017
Discount rate	0.85	%	0.70	%
Expected rate of return on Plan assets	1.50	%	1.50	%
Expected inflation	1.00	%	1.00	%
Rate of compensation increases	1.20	%	1.00	%

The calculation of the projected benefit obligation ("PBO") utilized BVG 2015 Generational data for assumptions related to the mortality rates, disability rates, turnover rates, and early retirement ages.

The PBO represents the present value of Plan benefits earned through the end of the year, with an allowance for future salary and pension increases as well as turnover rates. The following table presents the change in projected benefit obligation for the periods presented:



	Year Ended June 30,
	2018			2017
Projected benefit obligation, beginning	$	17,526		$	16,800
Service cost	835			557
Interest cost	121			73
Employee contributions	1,931			581
Actuarial gain	466			(598		)
Benefits paid	(1,215		)	(563		)
Plan amendment	(941		)	390
Foreign exchange (gain) loss	(596		)	286
Projected benefit obligation at end of year	$	18,127		$	17,526

The following table presents the change in Plan assets for the periods presented:



	Year Ended June 30,
	2018			2017
Fair value of Plan assets, beginning	$	10,925		$	10,276
Actual return on Plan assets	167			100
Company contributions	608			348
Employee contributions	1,931			581
Benefits paid	(1,215		)	(563		)
Foreign exchange (loss) gain	(387		)	183
Fair value of Plan assets at end of year	$	12,029		$	10,925

The following table presents the Company's reconciliation of funded status for the period presented:



	June 30, 2018			June 30, 2017
Projected benefit obligation at end of year	$	18,127		$	17,526
Fair value of plan assets at end of year	12,029			10,925
Funded status	$	(6,098	)	$	(6,601	)

The Company did not recognize any (gain) loss from other comprehensive income ("OCI") in its consolidated results of operations during the years ended June 30, 2018 and 2017. The Company does not expect to recognize any (gain) loss from OCI for the year ended June 30, 2019.

The fair value of Plan assets were $12,029 at June 30, 2018. The Plan is denominated in a foreign currency, the Swiss Franc, which can have an impact on the fair value of Plan assets. The Plan was not subject to material fluctuations during years ended June 30, 2018 or 2017. The Plan’s assets are administered by an independent pension fund foundation (the “foundation”). As of June 30, 2018, the foundation has invested the assets of the Plan in various investments vehicles, including cash, real estate, equity securities, and bonds. The investments are measured at fair value using a mix of Level 1, Level 2 and Level 3 inputs.

401(k) Plan

The Company maintains a qualified 401(k) plan (the “401(k) Plan”) for its U.S. employees. During fiscal 2018, 2017 and 2016, the Company matched employee contributions up to 3% of eligible compensation. The Company may also make optional contributions to the plan for any plan year at its discretion. Expense recognized by the Company for matching contributions related to the 401(k) plan was $3,684, $3,206 and $1,874 during the fiscal years ended June 30, 2018, 2017, and 2016, respectively.