Retirement Plans

12 Months Ended

Jun. 30, 2023

Defined Benefit Pension Obligation Disclosure [Abstract]

Retirement Plans

Note 13. Retirement Plans

Employee Benefit Plan

The Company’s employee savings and retirement plan is qualified under Section 401(k) of the United States Internal Revenue Code. Employees may make voluntary, tax‑deferred contributions to the 401(k) Plan up to the statutorily prescribed annual limit. The Company makes discretionary matching contributions to the 401(k) Plan on behalf of employees up to the limit determined by the Board of Directors. The Company contributed $2.2 million, $2.3 million and $1.1 million to the 401(k) Plan during the years ended June 30, 2023, 2022 and 2021, respectively.

Defined Benefit Pension Obligation

The Company has established a defined benefit pension plan for its employees in its Switzerland subsidiary. The plan provides benefits to employees upon retirement, death or disability. The Company uses June 30 as the year‑end measurement date for this plan.

Obligations and Funded Status

The following table presents the funded status of the defined benefit pension plan (in thousands):

	June 30,
	2023			2022
Change in benefit obligation:
Benefit obligation—beginning of fiscal year	$	17,453		$	18,705
Service cost		1,241			1,513
Interest cost		336			75
Plan participants’ contributions		2,486			2,554
Plan amendment		—			(699	)
Actuarial (gain) loss		389			(3,460	)
Foreign currency changes		1,205			(577	)
Settlements		(3,542	)		—
Benefit and expense payments		(180	)		(658	)
Benefit obligation—end of fiscal year	$	19,388		$	17,453
Change in plan assets:
Plan assets—beginning of fiscal year	$	17,350		$	14,419
Employer contributions		1,295			1,225
Actual return on plan assets		179			374
Plan participants’ contributions		2,486			2,554
Foreign currency changes		1,173			(564	)
Settlements		(3,542	)		—
Benefit and expense payments		(180	)		(658	)
Plan assets—end of fiscal year	$	18,761		$	17,350
Funded status	$	(627	)	$	(103	)
Amounts recognized within the consolidated balance sheets:
Assets	$	—		$	—
Long-term other liabilities		(627	)		(103	)
Net amount recognized	$	(627	)	$	(103	)

The following table presents the amounts recognized in accumulated other comprehensive loss (before tax) for the defined benefit pension plan (in thousands):

	June 30,
	2023		2022
Net actuarial gain	$	2,559	$	3,723
Prior service credit		195		224
Accumulated other comprehensive income	$	2,754	$	3,947

The following table presents the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for this defined benefit pension plan where accumulated benefit obligation exceeded the fair value of plan assets (in thousands):

	June 30,
	2023		2022
Projected benefit obligation	$	19,388	$	17,453
Accumulated benefit obligation	$	16,807	$	15,546
Fair value of plan assets	$	18,761	$	17,350

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss

The following table shows the components of the Company’s net periodic benefit costs and the other amounts recognized in other comprehensive loss, before tax, related to the Company’s defined benefit pension plan (in thousands):

	Year ended June 30,
	2023			2022			2021
Net Periodic Benefit Costs:
Service cost	$	1,241		$	1,513		$	1,766
Interest cost		336			75			38
Expected returns on assets		(176	)		(144	)		(142	)
Amortization of prior service cost (credit)		(23	)		54			54
Amortization of net gain		(207	)		—			—
Gain on settlement		(518	)		—			—
Net periodic benefit costs		653			1,498			1,716
Other Amounts Recognized in Other Comprehensive Loss:
Net (gain) loss arising during the year		406			(3,584	)		(850	)
Prior service cost (credit)		24			(53	)		(54	)
Amortization of prior service cost (credit)		—			(678	)		24
Amortization of net gain		217			—			—
Effect of settlement		546			4			8
Total recognized in other comprehensive (gain) loss		1,193			(4,311	)		(872	)
Total recognized in net periodic benefit costs and other comprehensive income (loss)	$	1,846		$	(2,813	)	$	844

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during fiscal year 2024 related to the Company’s defined benefit pension plan are as follows (in thousands):

	2023
Net loss	$	64
Prior service cost		23
Accumulated other comprehensive income	$	87

Assumptions

The assumptions used to determine net periodic benefit cost and to compute the expected long‑term return on assets for the Company’s defined benefit pension plan were as follows:

	Fiscal Years
	2023			2022			2021
Net Periodic Benefit Costs:
Discount rate		1.95	%		1.90	%		0.40	%
Rate of compensation increase		1.75	%		1.75	%		1.50	%
Expected long-term return on assets		1.50	%		1.00	%		1.00	%

The assumptions used to measure the benefit obligation for the Company’s defined benefit pension plan were as follows:

	June 30,
	2023			2022
Benefit Obligation:
Discount rate		1.95	%		1.90	%
Rate of compensation increase		1.75	%		1.75	%

Contributions and Future Benefit Payments

The Company made contributions of approximately $1.3 million, $1.2 million and $1.1 million to the defined benefit pension plan during fiscal years 2023, 2022 and 2021, respectively. The Company expects total contributions to the defined benefit pension plan for fiscal year 2024 will be approximately $1.2 million.

Estimated future benefit payments expected to be paid by the defined benefit pension plan at June 30, 2023 are as follows (in thousands):

Year Ending June 30,	Future Benefits
2024	$	1,063
2025		1,286
2026		1,112
2027		1,153
2028		1,201
Thereafter		9,152
Total estimated future benefit payments	$	14,967

Plan Assets

The plan assets are invested in insurance contracts with Copré Collective Foundation based in Lausanne, Switzerland at the end of fiscal years 2023 and 2022. In fiscal 2023 and 2022, the risks of death and disability are reinsured with Zurich Life Insurance. The Copré Foundation for Occupational Benefits defines and is responsible for the asset strategy and invests the plan assets for the Company. In fiscal 2023 and 2022, the guaranteed interest rate for mandatory retirement savings was 1.5% and 1.0%, respectively. The technical administration and management of the savings account are guaranteed by the Copré Foundation for Occupational Benefits. Insurance benefits due are paid directly to the entitled persons by the Copré Foundation for Occupational Benefits. Accuray International Sàrl has committed itself to pay the annual contributions and costs due under the pension fund regulations.

The contract of affiliation between the Company and the Copré Collective Foundation can be terminated by either side. In the event of a termination, recipients of retirement and survivors’ benefits would remain with the collective foundation. The Company commits itself to transfer its active insured members and recipients of disability benefits to the new employee benefits institution, thus releasing the Copré Collective Foundation from all obligations.