12. Retirement Benefit Plan

One of the Company’s German subsidiaries has a non-contributory, defined benefit retirement plan for eligible employees. This plan provides benefits based on the employee’s years of service and compensation during the years immediately preceding retirement, early retirement, termination, disability, or death, as defined in the plan.

During the three and nine fiscal months ended June 28, 2014, as a result of the productivity improvements in Test segment business processes gained through investments in infrastructure and technology, the Company initiated workforce reduction actions. These actions resulted in terminations of German employees who are eligible to receive future benefits under the German defined benefit pension plan. Certain of the termination actions were executed under early retirement plan arrangements which provide, among other benefits, special termination benefits involving the Company’s funding of the defined benefit pension plan for future service periods in effect throughout the contractual term of each early retirement arrangement. During the three and nine fiscal months ended June 28, 2014, effective with the date these early retirement agreements were finalized, cost adjustments associated with the special termination benefits amounts were recognized. During the nine fiscal months ended June 28, 2014, the Company recognized costs associated with these special termination benefits of less than $0.1 million. The special termination benefits are expected to be paid directly from the Company’s assets throughout the contractual terms of the arrangements, the lengths of which range from approximately 4.9 to 6.0 years. See Note 13 in Condensed Notes to Consolidated Financial Statements for additional information regarding the Company’s cost reduction actions that were initiated during the three and nine fiscal months ended June 28, 2014.

The cost for the plan for the three and nine fiscal months ended June 28, 2014 and June 29, 2013 included the following components:



	Three Fiscal Months Ended				Nine Fiscal Months Ended
		June 28,		June 29,		June 28,		June 29,
		2014		2013		2014		2013
	(expressed in thousands)
Service cost	$	203	$	172	$	604	$	516
Interest cost		211		190		630		574
Expected return on plan assets		(259)		(171)		(774)		(516)
Net amortization and deferral		117		129		350		389
Special termination benefits		(56)		-		26		-
Net periodic benefit cost	$	216	$	320	$	836	$	963

The weighted average expected long-term rate of return on plan assets used to determine the net periodic benefit cost for the three and nine fiscal months ended June 28, 2014 and June 29, 2013 was 5.5% and 5.2%,