Employee benefit plan

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Employee benefit plan

Employee benefit planIn accordance with labor law regulations in Mexico, certain employees are legally entitled to receive severance that is commensurate with the tenure they had with us at the time of termination. Our pension obligation is a Level 3 financial instrument that is recorded at fair value and calculated using actuarial valuations by applying the “projected unit credit method.” The fair value as of December 31, 2021 and 2020 was determined based on the application of certain assumptions including a discount rate, mortality (using the EMSSAH-09 and EMSSAM-09 mortality tables), salary increase and estimated personnel turnover and disability.

The following table sets forth our pension obligation, funded status and accumulated pension obligation as of December 31, 2021 and 2020 ($ in thousands):

	As of December 31,
	2021		2020
Change in pension obligation
Balance at beginning of period	$	6,231	$	6,764
Service cost	832		822
Interest cost	423		428
Actuarial (gain) loss	(266)		332
Effect of foreign exchange rates	(194)		(560)
Curtailment	29		(264)
Benefits paid	(1,065)		(1,264)
Divestitures	—		(27)
Balance at end of period	$	5,990	$	6,231
Underfunded status	(5,990)		(6,231)
Accumulated pension obligation	$	(4,265)	$	(4,382)

There were no plan assets as of December 31, 2021 or 2020 as contributions are made only to the extent benefits are paid. The underfunded status of the plan is recorded in other liabilities in the Consolidated Balance Sheets. Actuarial gains and losses are recognized in the Consolidated Statements of Operations.

The following table presents the components of net periodic pension cost for the years ended December 31, 2021, 2020 and 2019 ($ in thousands):

	Year Ended December 31,
	2021		2020		2019
Service cost	$	832	$	822	$	795
Interest cost	423		428		492
Effect of foreign exchange rates	(194)		(560)		384
Amortization of prior service cost	1		1		1
Amortization of loss (gain)	2		6		(20)
Compensation-non-retirement post-employment benefits	694		214		(1)
Settlement and curtailment gain	(406)		(289)		(211)
Total net periodic pension cost	$	1,352	$	622	$	1,440

The service cost component of net periodic pension cost is recorded within direct expense in the Consolidated Statements of Operations. All components of net periodic pension cost other than the service cost component are recorded within other expense.

The weighted-average assumptions used to determine the pension obligation as of December 31, 2021 and 2020 and the net periodic pension cost for the years ended December 31, 2021, 2020 and 2019 were as follows:

	As of December 31,
	2021		2020		2019
Discount rate	8.00	%	7.10	%	7.50	%
Rate of compensation increase	4.79	%	4.79	%	4.79	%

The discount rate reflects the current rate at which our pension obligations could be effectively settled on the measurement date. The discount rate was determined by our actuary based on a yield curve constructed from a portfolio of zero-coupon government bonds for which the timing and amount of cash flows approximate the estimated benefit payments of the plan. The plan’s expected cash flows are then discounted using the applicable spot rate from the yield curve to determine a single effective discount rate.

The following table represents our expected plan payments for the next five years and thereafter ($ in thousands):

	As of December 31, 2021
2022	$	574
2023	596
2024	657
2025	726
2026	758
Thereafter	3,742
Total expected plan payments	$	7,053