13. PENSIONS AND OTHER EMPLOYEE BENEFITS

Defined Benefit Plan

Until June 1, 2004, substantially all Old and New Globalstar employees and retirees who participated and/or met the vesting criteria for the plan were participants in the Retirement Plan of Space Systems/Loral (the "Loral Plan"), a defined benefit pension plan. The accrual of benefits in the Old Globalstar segment of the Loral Plan was curtailed, or frozen, by the administrator of the Loral Plan in 2003. Prior to 2003, benefits for the Loral Plan were generally based upon contributions, length of service with the Company and age of the participant. On June 1, 2004, the assets and frozen pension obligations of the Globalstar Segment of the Loral Plan were transferred into a new Globalstar Retirement Plan (the "Globalstar Plan"). The Globalstar Plan remains frozen and participants are not currently accruing benefits beyond those accrued as of October 23, 2003. The Company's funding policy is to fund the Globalstar Plan in accordance with the Internal Revenue Code and regulations.

In December 2019, the Company settled a portion of the pension liability related to terminated vested employees in the Globalstar Plan as a de-risking strategy. The total settlement of $1.7 million was paid out through the assets held in the Globalstar Plan. The settlement resulted in a reduction to the projected benefit obligation and a corresponding decrease to plan assets as of December 31, 2019. Additionally, in accordance with ASC 715 Compensation — Retirement Benefits, the Company recognized a loss of $0.5 million in its consolidated statement of operations during the twelve-month period ended December 31, 2019 associated with this settlement. This loss represents the pro rata portion of actuarial losses that were previously deferred in other comprehensive income.

Defined Benefit Pension Obligation and Funded Status

Below is a reconciliation of projected benefit obligation, plan assets and the funded status of the Company’s defined benefit plan (in thousands):



	Year Ended December 31,
	2019			2018
Change in projected benefit obligation:
Projected benefit obligation, beginning of year	$	17,150		$	18,637
Service cost	195			194
Interest cost	706			663
Actuarial (gain) loss	1,147			(1,332		)
Settlement	(1,660		)	—
Benefits paid	(1,029		)	(1,012		)
Projected benefit obligation, end of year	$	16,509		$	17,150
Change in fair value of plan assets:
Fair value of plan assets, beginning of year	$	12,661		$	14,248
Return on plan assets	2,179			(870		)
Employer contributions	230			295
Settlement	(1,660		)	—
Benefits paid	(1,029		)	(1,012		)
Fair value of plan assets, end of year	$	12,381		$	12,661
Funded status, end of year-net liability	$	(4,128	)	$	(4,489	)

Net Benefit Cost and Amounts Recognized

Components of the net periodic benefit cost of the Company’s defined benefit pension plan were as follows (in thousands):



	Year Ended December 31,
	2019			2018			2017
Net periodic benefit cost:
Service cost	$	195		$	194		$	195
Interest cost	706			663			722
Expected return on plan assets	(794		)	(901		)	(825		)
Amortization of unrecognized net actuarial loss	404			374			443
Settlement	455			—			—
Total net periodic benefit cost	$	966		$	330		$	535

Amounts recognized in the consolidated balance sheet were as follows (in thousands):



	December 31,
	2019			2018
Amounts recognized:
Funded status recognized in other non-current liabilities	$	(4,128	)	$	(4,489	)
Net actuarial loss recognized in accumulated other comprehensive loss	4,525			5,622
Net amount recognized in retained deficit	$	397		$	1,133

The estimated net actuarial loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2020 is $0.3 million. No amounts are expected to be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2020 related to prior service costs or net transition obligations.

Assumptions

The weighted-average assumptions used to determine the benefit obligation and net periodic benefit cost were as follows:



	For the Year Ended December 31,
	2019		2018		2017
Benefit obligation assumptions:
Discount rate	3.28	%	4.25	%	3.63	%
Rate of compensation increase	N/A		N/A		N/A
Net periodic benefit cost assumptions:
Discount rate	4.25	%	3.63	%	4.15	%
Expected rate of return on plan assets	6.50	%	6.50	%	6.50	%
Rate of compensation increase	N/A		N/A		N/A

The assumptions, investment policies and strategies for the Globalstar Plan are determined by the Globalstar Plan Committee. The Globalstar Plan Committee is responsible for ensuring the investments of the plans are managed in a prudent and effective manner. Amounts related to the pension plan are derived from actuarial and other assumptions, including discount rates, mortality, expected rate of return, participant data and termination. The Company reviews assumptions on an annual basis and makes adjustments as considered necessary.

The expected long-term rate of return on pension plan assets is selected by taking into account the expected duration of the projected benefit obligation for the plan, the asset mix of the plan and the fact that the plan assets are actively managed to mitigate risk. Discount rates are determined annually based on the Plan administrator’s yield curve index, which considers expected benefit payments and is discounted with rates from the yield curve to determine a single equivalent discount rate.

Plan Assets and Investment Policies and Strategies

The plan assets are invested in various mutual funds which have quoted prices. The plan has a target allocation. On a weighted-average basis, target allocations for equity securities range from 50% to 60%, for debt securities 25% to 50% and for other investments 0% to 15%. The defined benefit pension plan asset allocations as of the measurement date presented as a percentage of total plan assets were as follows:



	December 31,
	2019		2018
Equity securities	55	%	54	%
Debt securities	45		46
Total	100	%	100	%

The fair values of the Company’s pension plan assets by asset category were as follows (in thousands):



	December 31, 2019
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
United States equity securities	$	5,501	$	—	$	5,501	$	—
International equity securities	1,366		—		1,366		—
Fixed income securities	3,725		—		3,725		—
Other	1,789		—		1,789		—
Total	$	12,381	$	—	$	12,381	$	—



	December 31, 2018
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
United States equity securities	$	5,509	$	—	$	5,509	$	—
International equity securities	1,288		—		1,288		—
Fixed income securities	4,158		—		4,158		—
Other	1,706		—		1,706		—
Total	$	12,661	$	—	$	12,661	$	—

Accumulated Benefit Obligation

The accumulated benefit obligation of the defined benefit pension plan was $16.5 million and $17.2 million at December 31, 2019 and 2018, respectively.

Benefits Payments and Contributions

The benefit payments to retirees over the next ten years are expected to be paid as follows (in thousands):



2020	$	1,023
2021	1,024
2022	1,041
2023	1,026
2024	1,037
2025 - 2029	5,101

For 2019 and 2018, the Company contributed $0.2 million and $0.3 million, respectively, to the Globalstar Plan. For 2020, the Company's expected contributions to the Globalstar Plan will be $0.8 million.

401(k) Plan

The Company has a defined contribution employee savings plan, or “401(k),” which provides that the Company may match the contributions of participating employees up to a designated level. Under this plan, the matching contributions were approximately $0.6 million, $0.6 million and $0.4 million for 2019, 2018, and 2017, respectively. The increase in matching contributions during 2018 was due to increased headcount as well as an increase to the matching contribution percentage by the Company during 2018.