Note 9: Employee benefit obligations

The Company sponsors a defined benefit plan (the “Swiss Plan”) for all its employees in Switzerland for retirement benefits, as well as benefits on death or long-term disability. The liability in respect of the Swiss Plan is the projected benefit obligation calculated using the projected unit credit method. The projected benefit obligation as of December 31, 2016 represents the actuarial present value of the estimated future payments required to settle the obligation that is attributable to employee service rendered before that date. Swiss Plan assets are recorded at fair value. Pension expense is presented in the payroll expenses in the various functions in which the employees are engaged. Actuarial gains and losses arising from differences between the actual and the expected return on the Swiss Plan assets are recognized in accumulated other comprehensive income (loss) and amortized over the requisite service period. The plan is part of a collective pension foundation run by an insurance company. The Company and the employees pay retirement contributions, which are defined as a percentage of the employees’ covered salaries. The foundation, in turn, has all its risks (disability, death, longevity) and future benefits managed and guaranteed by the insurance company. Interest is credited to the employees’ account at the minimum rate provided in the Swiss Plan, payment which is guaranteed by the insurance contract, which represents the Swiss Plan’s primary asset. The targeted allocation for these funds is as follows:

Asset Allocation by Category as of December 31, 2016:
Asset Category:	Asset allocation (%)
Debt Securities		28
Real Estate		22
Equity Securities		27
Others		23
Total		100

The following table sets forth the Swiss Plan’s funded status and amounts recognized in the consolidated financial statements for the year ended December 31, 2016 and 2015:

	December 31,
	2016			2015
Change in Benefit Obligation
Projected benefit obligation at beginning of year	$	6,223		$	-
Interest cost		64			47
Company service cost		498			312
Employee contributions		321			189
Prior service cost		-			158
Benefits paid		422			4,023
Actuarial loss		713			1,494
Projected benefit obligation at end of year	$	8,241		$	6,223
Change in Plan Assets
Fair value of plan assets at beginning of year	$	4,433		$	-
Actual return on plan assets		320			(63	)
Employer contributions		482			284
Employee contributions		321			189
Benefits paid		422			4,023
Fair value of plan assets at end of year	$	5,978		$	4,433

Funded Status at End of year
Excess of obligation over assets	$	(2,263	)	$	(1,790	)

Change in Accrued Benefit Liability
Accrued benefit asset/(liability) at beginning of year	$	(1,790	)	$	-
Company contributions made during year		482			284
Net periodic benefit cost for year		(529	)		(404	)
Net decrease in accumulated other comprehensive loss		(426	)		(1,670	)
Accrued benefit liability at end of year	$	(2,263	)	$	(1,790	)

	December 31,
	2016			2015
Non - current plan assets	$	5,979		$	4,433
Non - current liability		8,242			6,223
Accrued benefit liability at end of year	$	(2,263	)	$	(1,790	)
Projected Benefit Payments
Projected year 1	$	148		$	8
Projected year 2		150			13
Projected year 3		152			19
Projected year 4		155			25
Projected year 5		1,069			32
Projected year 6-10	$	928		$	264

The fair value of the plan assets is the estimated cash surrender value of the insurance contract at December 31, 2016. The level of inputs used to measure fair value was Level 2.

	Year ended December 31,
	2016			2015
Net Periodic Benefit Cost
Service cost	$	498		$	312
Interest cost (income)		(21	)		47
Expected return on plan assets		(49	)		(38	)
Amortization of prior service costs		87			14
Amortization of transition obligation		14			69
Total net periodic benefit cost	$	529		$	404

Weighted average assumptions:
Discount rate as of December 31		0.60%			1.00%
Expected long-term rate of return on assets		0.60%			1.00%
Rate of compensation increase		1.00%			1.00%
Mortality and disability assumptions (*)	BVG 2015 GT			BVG 2010 GT

(*)	Mortality data used for actuarial calculation.