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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
The Company’s Gratuity Plan in India (the “India Plan”) provides for a lump sum payment to vested employees on retirement or upon termination of employment in an amount based on the respective employee’s salary and years of employment with the Company. In addition, the Company’s subsidiary operating in the Philippines conforms to the minimum regulatory benefit, which provide for lump sum payment to vested employees on retirement from employment in an amount based on the respective employee’s salary and years of employment with the Company (the “Philippines Plan”). Liabilities with regard to the India Plan and the Philippines Plan are determined by actuarial valuation using the projected unit credit method. Current service costs for these Plans are accrued in the year to which they relate. Actuarial gains or losses or prior service costs, if any, resulting from amendments to the plans are recognized and amortized over the remaining period of service of the employees.

The India Plan is partially funded whereas the Philippines plan is unfunded. The Company makes annual contributions to the India Plan established with insurance companies. Fund managers manage these funds and calculate the annual contribution required to be made by the Company and manage the India Plan, including any required payouts. These funds are managed on a cash accumulation basis and interest is declared retrospectively on March 31 of each year. The Company earned a return of approximately 5.9% per annum on the India Plan for the year ended December 31, 2022.
The benefit obligation has been measured as of December 31, 2022 and 2021. The following table sets forth the activity and the funded status of the gratuity plans and the amounts recognized in the Company’s consolidated financial statements at the end of the relevant periods:
Change in projected benefit obligation
20222021
Projected benefit obligation as of January 1$23,271$20,466 
Service cost3,7703,512 
Interest cost1,232929 
Benefits paid(1,757)(1,844)
Acquisition adjustments— 209 
Actuarial (gain)/loss*(2,639)539 
Effect of exchange rate changes(2,346)(540)
Projected benefit obligation as of December 31$21,531$23,271 
Change in Plan Assets
Plan assets as of January 1$13,605 $11,512 
Actual return798 777 
Employer contribution3,273 3,361 
Benefits paid(1,737)(1,835)
Effect of exchange rate changes(1,490)(210)
Plan assets as of December 31$14,449 $13,605 
Unfunded status as of December 31$7,082$9,666
Unfunded amount recognized in the consolidated balance sheets
Non-current liability (included under other non-current liabilities)$6,971 $9,604 
Current liability (included under accrued employee costs)111 62 
Total accrued liability$7,082 $9,666 
Accumulated benefit obligation as of December 31$14,447 $14,794 
Accumulated benefit obligation in excess of plan assets as of December 31$(2)$1,189 
*During the year ended December 31, 2022, actuarial gain was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations. During the year ended December 31, 2021, actuarial loss was driven by experience adjustments on present value of benefit obligations offset by changes in actuarial assumptions.
Components of net periodic benefit costs recognized in consolidated statements of income and actuarial loss reclassified from AOCI, were as follows:
 Year ended December 31,
 202220212020
Service cost$3,770 $3,512 $2,706 
Interest cost1,232 929 964 
Expected return on plan assets(872)(796)(636)
Amortization of actuarial loss, gross of tax592 709 394 
Net gratuity cost$4,722 $4,354 $3,428 
Amortization of actuarial loss, gross of tax$592 $709 $394 
Income tax effects on above(179)(204)(127)
Amortization of actuarial loss, net of tax$413 $505 $267 

The components of actuarial loss on retirement benefits included in AOCI, excluding tax effects, were as follows:
 As of December 31,
 202220212020
Net actuarial loss$(462)$(3,624)$(3,772)
Net prior service cost(8)(12)(15)
Amount recognized in AOCI, excluding tax effects$(470)$(3,636)$(3,787)

The weighted average actuarial assumptions used to determine benefit obligations and net gratuity cost were:
 December 31,
 202220212020
Discount rate7.3 %5.6 %4.6 %
Rate of increase in compensation levels7.8 %7.6 %7.1 %
Expected long-term rate of return on plan assets per annum7.3 %6.8 %7.0 %

The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards. The discount rates are either based on current market yields on government securities or yields on government securities adjusted for a suitable risk premium, if available.
Expected benefit payments during the year ending December 31,
2023$3,475 
2024$3,183 
2025$2,897 
2026$2,661 
2027$2,661 
2028 to 2032$8,388 

The Company maintains several 401(k) plans (the “401(k) Plans”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), covering all eligible employees, as defined in the Code as a defined social security contribution plan. The Company may make discretionary contributions of up to a maximum of 3.0% of employee compensation within certain limits.
The Company’s accrual for contributions to the 401(k) Plans were as follows:
Year ended December 31,
202220212020
Contribution to the 401(k) Plans$5,205 $3,693 $3,577 
The Company’s contribution for various defined social security contribution plans on behalf of employees in foreign subsidiaries of the Company were as follows:
Year ended December 31,
202220212020
Contributions to the defined social security contribution plans$18,215 $16,340 $11,332