Deferred Compensation Benefits

The Company maintains a non-qualified defined-benefit Executive Supplemental Benefit Plan (ESBP) that provides certain former key executives with deferred compensation benefits, based on years of service and base compensation, payable during retirement. The plan was amended as of November 30, 1994, to freeze benefits for the participants in the plan at that time.

Net periodic pension cost for the years ended December 31, 2014, 2013, and 2012 for the ESBP is as follows:



Net Periodic Pension Cost—ESBP	2014		2013		2012
(amounts in thousands)
Interest cost	$	276	$	243	$	338
Amortization of actuarial loss	138		191		279
Net periodic pension cost	$	414	$	434	$	617

The Company also retained a contributory defined-benefit plan for its previous employees located in the Netherlands (NDBP) when the Company disposed of its subsidiary, CTG Nederland, B.V. Benefits paid are a function of a percentage of career average pay. This plan was curtailed for additional contributions in January 2003. Net periodic pension cost was approximately $90,000, $49,000, and $118,000 for the years ending December 31, 2014, 2013 and 2012, respectively.

The change in benefit obligation and reconciliation of fair value of plan assets for the years ended December 31, 2014 and 2013 for the ESBP and NDBP are as follows:



	ESBP						NDBP
Changes in Benefit Obligation	2014			2013			2014			2013
(amounts in thousands)
Benefit obligation at beginning of period	$	7,499		$	8,405		$	11,635		$	11,913
Interest cost	276			243			358			333
Benefits paid	(737		)	(720		)	(159		)	(141		)
Actuarial loss (gain)	1,236			(429		)	4,896			(939		)
Effect of exchange rate changes	—			—			(1,798		)	469
Benefit obligation at end of period	8,274			7,499			14,932			11,635
Reconciliation of Fair Value of Plan Assets
Fair value of plan assets at beginning of period	—			—			8,752			8,143
Actual return on plan assets	—			—			359			351
Employer contributions	737			720			—			—
Benefits paid	(737		)	(720		)	(159		)	(141		)
Administrative costs	—			—			—			52
Effect of exchange rate changes	—			—			(1,042		)	347
Fair value of plan assets at end of period	—			—			7,910			8,752
Accrued benefit cost	$	8,274		$	7,499		$	7,022		$	2,883
Accrued benefit cost is included in the consolidated balance sheet as follows:
Current liabilities	$	714		$	704		$	—		$	—
Non-current liabilities	$	7,560		$	6,795		$	7,022		$	2,883
Discount rates:
Benefit obligation	3.30		%	3.87		%	1.50		%	3.20		%
Net periodic pension cost	3.87		%	3.02		%	3.20		%	2.80		%
Salary increase rate	—		%	—		%	—		%	—		%
Expected return on plan assets	—		%	—		%	4.00		%	4.00		%

For the ESBP, the accumulated benefit obligation at December 31, 2014 and 2013 was $8.3 million and $7.5 million, respectively. The amounts included in other comprehensive loss relating to the pension loss adjustment in 2014 and 2013, net of tax, were approximately $0.7 million and $(0.4) million, respectively. The discount rate used in 2014 was 3.30%, which is reflective of a series of bonds that are included in the Moody’s Aa long-term corporate bond yield whose cash flow approximates the payments to participants under the ESBP for the remainder of the plan. This rate was a decrease of 57 basis points from the rate used in the prior year and resulted in an increase in the plan’s liabilities of approximately $0.4 million. Benefits paid to participants are funded by the Company as needed, and are expected to total approximately $0.7 million in 2015. The plan is deemed unfunded as the Company has not specifically identified Company assets to be used to discharge the deferred compensation benefit liabilities. The Company has purchased insurance on the lives of certain plan participants in amounts considered sufficient to reimburse the Company for the costs associated with the plan for those participants. The Company does not anticipate making contributions to the plan other than for current year benefit payments as required in 2015 or future years.

For the NDBP, the accumulated benefit obligation at December 31, 2014 and 2013 was $14.9 million and $11.6 million, respectively. The discount rate used in 2014 was 1.50%, which is reflective of a series of corporate bonds whose cash flow approximates the payments to participants under the NDBP for the remainder of the plan. This rate was a decrease of 170 basis points from the rate used in the prior year due to the declining economic environment in Europe, and resulted in an increase in the plan’s liabilities of $4.4 million in 2014.

The assets for the NDBP are held by Aegon, a financial services firm located in the Netherlands. The assets for the plan are included in a general portfolio of government bonds, a portion of which is allocated to the NDBP based upon the estimated pension liability associated with the plan. The fair market value of the plan’s assets equals the amount allocated to the NDBP in any given year. The fair value of the assets is determined using a Level 3 methodology (see note 1 “Summary of Significant Accounting Policies—Fair Value”). The calculation of fair value includes determining the present value of the future expected payments under the plan, including using assumptions such as expected market rates of return and discount rates. In 2014 and 2013, the plan investments had a targeted minimum return to the Company of 4.0%, which is consistent with historical returns and the 4.0% return guaranteed to the participants of the plan. The Company, in conjunction with Aegon, intends to maintain the current investment strategy of investing plan assets solely in government bonds in 2015.

Anticipated benefit payments for the ESBP and the NDBP expected to be paid in future years are as follows:



	ESBP		NDBP
(amounts in thousands)
2015	$	725	$	150
2016	670		165
2017	654		186
2018	655		227
2019	657		258
2020 - 2024	2,942		1,528
Total	$	6,303	$	2,514

For the ESBP and the NDBP, the amounts included in accumulated other comprehensive loss, net of tax, that have not yet been recognized as components of net periodic benefit cost as of December 31, 2014 are $2.0 million and $7.8 million, respectively, for unrecognized actuarial losses. The amounts included in accumulated other comprehensive loss, net of tax, that had not yet been recognized as components of net periodic benefit cost as of December 31, 2013 were $1.3 million and $3.9 million, respectively, also for unrecognized actuarial losses.

The amounts recognized in other comprehensive income (loss), net of tax, for 2014, 2013, and 2012, which primarily consist of an actuarial gain (loss), totaled $(4.6) million (primarily due to the decrease in the discount rate for the NDBP), $1.3 million, and $(2.8) million, respectively. Net periodic pension benefit (cost), and the amounts recognized in other comprehensive loss, net of tax, for the ESBP and the NDBP for 2014, 2013, and 2012 totaled $(5.1) million, $0.8 million, and $2.1 million, respectively.

The amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic benefit cost during 2015 for the ESBP and the NDBP for unrecognized actuarial losses total $0.4 million.

The Company also maintains the Key Employee Non-Qualified Deferred Compensation Plan for certain key executives. Company contributions to this plan, if any, are based on annually defined financial performance objectives. There were $0.2 million in contributions to the plan in 2014 for amounts earned in 2013, $0.3 million in contributions to the plan in 2013 for amounts earned in 2012, and $0.4 million in contributions to the plan in 2012 for amounts earned in 2011. The Company anticipates making contributions in 2015 totaling approximately $0.1 million to this plan for amounts earned in 2014. The investments in the plan are included in the total assets of the Company, and are discussed in note 3, “Investments.” During 2014, 2013 and 2012, some participants in the plan exchanged a portion of their investments for stock units which represent shares of the Company’s common stock. In exchange for the funds received, the Company issued shares out of treasury stock equivalent to the number of share units received by the participants. These shares of common stock are not entitled to any voting rights, but will receive dividends if any are paid. The shares are being held by the Company, and will be released to the participants as prescribed by their payment election under the plan.

The Company maintains the Non-Employee Director Deferred Compensation Plan for its non-employee directors. Cash contributions were made to the plan for certain of these directors totaling approximately $0.4 million in 2014, and less than $0.1 million for both 2013 and 2012. At the time the contributions were made, one of the non-employee directors elected to exchange his cash contributions to the plan for the purchase of stock units which represent shares of the Company’s common stock. Consistent with the Key Employee Non-Qualified Deferred Compensation Plan, in exchange for funds received, the Company issued stock out of treasury stock equivalent to the number of share units received by the participant. These shares of common stock are not entitled to any voting rights, but will receive dividends if any are paid. The shares are being held by the Company, and will be released to the non-employee director as prescribed by their payment election under the plan.