Employee benefit plans

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Employee benefit plans

Employee benefit plans

The Company has employee benefit plans in the form of certain statutory and other programs covering its employees.

 Defined benefit plans

In accordance with Indian law, the Company maintains a defined benefit retirement plan covering substantially all of its Indian employees. In accordance with Mexican law, the Company provides termination benefits to all of its Mexican employees. In addition, certain of the Company’s subsidiaries in the Philippines, Israel and Japan sponsor defined benefit retirement programs.

Net defined benefit plan costs for the three months ended March 31, 2023 and 2024 include the following components: 

	Three months ended March 31,
	2023		2024
Service costs	$	3,760	$	4,303
Interest costs	1,736		2,018
Amortization of actuarial loss	167		62
Expected return on plan assets	(1,261)		(1,362)
Net defined benefit plan costs	$	4,402	$	5,021

Defined contribution plans

During the three months ended March 31, 2023 and 2024, the Company contributed the following amounts to defined contribution plans in various jurisdictions:

 

	Three months ended March 31,
	2023		2024
India	$	11,151	$	12,844
U.S.	5,457		6,096
U.K.	5,960		5,935
China	6,851		7,340
Other Regions	5,261		4,394
Total	$	34,680	$	36,609

Deferred compensation plan

On July 1, 2018, Genpact LLC, a wholly-owned subsidiary of the Company, adopted an executive deferred compensation plan (the “Plan”). The Plan provides a select group of U.S.-based members of Company management with the opportunity to defer from 1% to 80% of their base salary and from 1% to 100% of their qualifying bonus compensation (or such other minimums or maximums as determined by the Plan administrator from time to time) pursuant to the terms of the Plan. Participant deferrals are 100% vested at all times. The Plan also allows for discretionary supplemental employer contributions by the Company, in its sole discretion, which will be subject to a two-year vesting schedule (50% vesting on the one-year anniversary of approval of the contribution and 50% vesting on the second year anniversary of approval of the contribution) or such other vesting schedule as determined by the Company. However, no such contributions have been made by the Company to date.

14. Employee benefit plans (Continued)

The Plan also provides an option for participants to elect to receive deferred compensation and earnings thereon on either fixed date(s) no earlier than two years following the applicable Plan year (or end of the applicable performance period for performance-based bonus compensation) or following a separation from service, in each case either in a lump sum or in annual installments over a term of up to 15 years. Participants can elect to change or re-defer their rights to receive the deferred compensation until the 10th anniversary following their separation from service, subject to fulfillment of certain conditions. Each Plan participant’s compensation deferrals are credited or debited with notional investment gains and losses equal to the performance of selected hypothetical investment funds offered under the Plan and elected by the participant.

The Company has investments in funds held in Company-owned life insurance policies which are held in a Rabbi Trust that are classified as trading securities. Management determines the appropriate classification of the securities at the time they are acquired and evaluates the appropriateness of such classifications at each balance sheet date.

The liability for the deferred compensation plan was $51,354 and $54,519 as of December 31, 2023 and March 31, 2024, respectively, and is included in “accrued expenses and other current liabilities” and “other liabilities” in the consolidated balance sheets.

In connection with the administration of the Plan, the Company has purchased Company-owned life insurance policies insuring the lives of certain employees. The cash surrender value of these policies was $51,983 and $55,559 as of December 31, 2023 and March 31, 2024, respectively. The cash surrender value of these insurance policies is included in “other assets” in the consolidated balance sheets.

During the three months ended March 31, 2023 and 2024, the change in the fair value of Plan assets was $2,386 and $3,208, respectively, which is included in “other income (expense), net,” in the consolidated statements of income. During the three months ended March 31, 2023 and 2024, the change in the fair value of deferred compensation liabilities was $2,343 and $3,164, respectively, which is included in “selling, general and administrative expenses.”