Note 17.

Benefit Plans

U.S. Pension Plan

We maintain a defined benefit pension plan, Jefferies Group LLC Employees’ Pension Plan (the “U.S. Pension Plan”), which is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended, and covers certain of our employees. Under the U.S. Pension Plan, benefits to participants are based on years of service and the employee’s career average pay. Effective December 31, 2005, benefits under the U.S. Pension Plan were frozen with no further benefit accruing to participants for future service after December 31, 2005.

German Pension Plan

In connection with the acquisition of Jefferies Bache from Prudential on July 1, 2011, we acquired a defined benefits pension plan located in Germany (the “German Pension Plan”) for the benefit of eligible employees of Jefferies Bache in that territory. The German Pension Plan has no plan assets and is therefore unfunded. We have purchased insurance contracts from multi-national insurers held in the name of Jefferies Bache Limited to provide for the plan’s future obligations. The investment in these insurance contracts are included in Financial Instruments owned – Investments at fair value in the Consolidated Statements of Financial Condition and has a fair value of $19.7 million and $19.7 million at February 28, 2014 and November 30, 2013, respectively. We expect to pay our pension obligations from the cash flows available to us under the insurance contracts. All costs relating to the plan (including insurance premiums and other costs as computed by the insurers) are paid by us. In connection with the acquisition, it was agreed with Prudential that any insurance premiums and funding obligations related to pre-acquisition date service will be reimbursed to us by Prudential.

The components of net periodic pension (income)/cost for the plans are as follows (in thousands):


U.S. Pension Plan	Successor			Predecessor
	Three Months Ended February 28, 2014			Three Months Ended February 28, 2013
Components of net periodic pension (income) cost:
Service cost	$	56		$	56
Interest cost on projected benefit obligation		607			529
Expected return on plan assets		(789	)		(665	)
Net amortization		(36	)		300


Net periodic pension (income)/cost	$	(162	)	$	220


German Pension Plan	Successor		Predecessor
	Three Months Ended February 28, 2014		Three Months Ended February 28, 2013
Components of net periodic pension cost:
Service cost	$	11	$	16
Interest cost on projected benefit obligation		221		220
Net amortization		62		45

Net periodic pension cost	$	294	$	281

Employer Contributions – Our funding policy is to contribute to the plans at least the minimum amount required for funding purposes under applicable employee benefit and tax laws. We did not contribute to the U.S. Pension Plan during the three months ended February 28, 2014 and we expect to make $1.0 million in contributions to the plan during the remainder of the 2014 fiscal year. We did not contribute to the German Pension Plan during the three months ended February 28, 2014 and do not expect to make any contributions to the German Pension Plan for the remainder of the fiscal year.