| Employee benefit obligations |
Employee benefit obligations The Company's liability in respect of the Swiss Plan (see Note 2(u)) is the projected benefit obligation calculated using the projected unit credit method. The projected benefit obligation as of December 31, 2022 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 Swiss Plan is part of a collective pension foundation of pooled investments managed by a top tier insurance company. The Company and the employees pay retirement contributions, which are defined as a percentage of the employees’ covered salaries.The basis for the determination of the interest on employee’s savings account is the return on plan assets, considering legal minimum requirements. The targeted allocation for these funds is as follows: | | | | | | | | | | Asset Allocation by Category as of December 31, 2022: | | Asset allocation (%) | | Asset Category: | | | Debt Securities | | 32% | | Real Estate | | 26% | | Equity Securities | | 34% | | Others | | 8% | | 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, 2022 and 2021: | | | | | | | | | | | | | December 31, | | | 2022 | | 2021 | | Change in Benefit Obligation | | | | | Projected benefit obligation at beginning of year | $ | 29,975 | | | $ | 22,753 | | | Interest cost | 62 | | | 48 | | | Company service cost | 2,725 | | | 1,915 | | | Employee contributions | 1,631 | | | 1,167 | | | Prior service cost | 484 | | | (923) | | | Benefits paid | 423 | | | 2,976 | | | Actuarial loss | (5,865) | | | 2,039 | | | Projected benefit obligation at end of year | $ | 29,435 | | | $ | 29,975 | | | Change in Plan Assets | | | | | Fair value of plan assets at beginning of year | $ | 25,967 | | | $ | 18,082 | | | Actual return on plan assets | (4,937) | | | 1,992 | | | Employer contributions | 2,446 | | | 1,750 | | | Employee contributions | 1,631 | | | 1,167 | | | Benefits paid | 424 | | | 2,976 | | | Fair value of plan assets at end of year | $ | 25,531 | | | $ | 25,967 | | | Funded Status at End of year | | | | | Excess of obligation over assets | $ | 3,904 | | | $ | 4,008 | | | Change in Accrued Benefit Liability | | | | | Accrued benefit liability at beginning of year | $ | (4,008) | | | $ | (4,671) | | | Company contributions made during year | 2,446 | | | 1,750 | | | Net periodic benefit cost for year | (2,078) | | | (1,310) | | | Net decrease (increase) in accumulated other comprehensive loss | (264) | | | 223 | | | Accrued benefit liability at end of year | $ | (3,904) | | | $ | (4,008) | |
| | | | | | | | | | | | | December 31, | | | 2022 | | 2021 | | Non-current plan assets | $ | 25,531 | | | $ | 25,967 | | | Non-current liability | 29,435 | | | 29,975 | | | Accrued benefit liability at end of year | $ | (3,904) | | | $ | (4,008) | | | Projected Benefit Payments | | | | | Projected year 1 | $ | 539 | | | $ | 567 | | | Projected year 2 | 744 | | | 454 | | | Projected year 3 | 983 | | | 819 | | | Projected year 4 | 1,065 | | | 765 | | | Projected year 5 | 578 | | | 452 | | | Projected years 6-10 | 16,940 | | | 13,816 | |
The fair value of the plan assets is the estimated cash surrender value of the insurance contract at December 31, 2022. The level of inputs used to measure fair value was Level 2. | | | | | | | | | | | | | Year ended December 31, | | | 2022 | | 2021 | | Net Periodic Benefit Cost | | | | | Service cost | $ | 2,725 | | | $ | 1,915 | | | Interest cost (income) | 62 | | | 48 | | | Expected return on plan assets | (701) | | | (508) | | Amortization of actuarial (gain) loss | 117 | | | 133 | | | Amortization of prior service costs | (99) | | | (94) | | | Total net periodic benefit cost | $ | 2,104 | | | $ | 1,494 | | | | | | | Weighted average assumptions: | | | | | Discount rate as of December 31 | 2.30% | | 0.20% | | Expected long-term rate of return on assets | 3.50% | | 2.50% | | Rate of compensation increase | 1.50% | | 1.00% | Mortality and disability assumptions (*) | BVG 2020 GT | | BVG 2020 GT |
(*) Mortality data used for actuarial calculation.
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