Employee Benefit Plans

The Company previously sponsored a cash balance defined benefit pension plan that covered substantially all of its salaried employees (the “Pension Plan”). In November 2012, the Board of Directors approved the termination of the Pension Plan. The Pension Plan was frozen in March 2013 pending regulatory approvals, which were received in August 2014. As of December 31, 2014, the Pension Plan assets were distributed to Pension Plan participants and $7.9 million was distributed to the Company’s 401(k) Plan to pay additional future benefits to current and future 401(k) plan participants over a period of up to seven years. Subsequent to these distributions, the remaining Pension Plan assets of $23.8 million were reverted to the Company in December 2014. As a result of the Pension Plan termination, the Company had no prepaid pension asset or accumulated benefit obligation at December 31, 2015 and 2014.

There were no pension charges in 2015. During 2014, the Company recorded a total of $13.5 million in Pension charges on the Company’s Consolidated Statements of Operations, which included $8.7 million for net periodic pension costs, including settlements related to the termination of the Pension Plan and $4.8 million of excise tax.

During 2013, the Company incurred settlement losses of $0.7 million related to cash distributions made to certain participants.

Obligations and Funded Status

Change in projected benefit obligation and plan assets:



	2014
Projected benefit obligation, beginning of year	$	23,531
Interest cost	625
Actuarial loss	2,245
Benefits paid	(95		)
Settlements	(26,306		)
Projected benefit obligation, end of year	$	—

Fair value of assets, beginning of year	$	58,648
Actual return on assets	14
Benefits and expenses paid	(595		)
Settlements	(26,306		)
Assets contributed to 401(k) Plan	(7,940		)
Assets reverted to the Company	(23,821		)
Fair value of assets, end of year	$	—

Funded status at end of year	$	—

Ratio of plan assets to projected benefit obligation	—		%

A summary of the net periodic pension cost and other amounts recognized in other comprehensive income (loss) are as follows:



	2014			2013
Service cost	$	—		$	225
Interest cost	625			653
Expected return on assets	550			(443		)
Amortization of loss	465			326
Settlement charges	7,107			739
Net periodic pension cost	$	8,747		$	1,500

Other changes in plan assets and obligations recognized in Other comprehensive income:
Gain	(5,392		)	(3,260		)
Total other comprehensive income	(5,392		)	(3,260		)
Total net periodic pension cost and other comprehensive income (loss)	$	3,355		$	(1,760	)

As of December 31, 2015 and 2014 there were no actuarial loss amounts not yet reflected in net periodic pension cost and included in Accumulated other comprehensive loss as they were recognized in net periodic cost during 2014 due to the final settlement of the Pension Plan in 2014. As of December 31, 2013, actuarial loss amounts not yet reflected in net periodic pension cost and included in accumulated other comprehensive loss were $5.4 million. In 2014, pension charges on the Consolidated Statements of Operations include $4.8 million of excise tax.

Assumptions

Assumptions used to develop net periodic pension cost:



	2014	2013
Discount rate	3.75%	4.37%
Expected long-term rate on plan assets	—%	—%
Rate of compensation increase	N/A	N/A

The Pension Plan was terminated in 2014. Prior to that, to develop the expected long-term rate of return on assets assumption, the Company considered the current level of expected returns on risk free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio. This resulted in the selection of the 0.00% assumption in 2013. Early in 2014, the Pension Plan transferred the majority of its investments held in plan assets to U.S. Treasury securities to maintain the Pension Plan asset balance, which resulted in the selection of a minimal expected long-term rate on plan assets as the U.S. Treasury securities in 2014 and 2013.

Plan Assets

During 2014, the Pension Plan transferred the majority of its investments held in plan assets to U.S. Treasury securities to maintain the Pension Plan asset balance. There were no Plan assets at December 31, 2014. At December 31, 2013, U.S. Treasury securities are fair valued based on quoted market prices in an active market. The following tables sets forth by level within the fair value hierarchy for Plan assets at December 31, 2013.

Assets at Fair Value as of December 31, 2013



Asset Category:	Level 1		Level 2		Level 3		Total
Cash	$	115	$	—	$	—	$	115
Money market funds	697		—		—		697
U.S. Treasuries	57,836		—		—		57,836
Total	$	58,648	$	—	$	—	$	58,648

The following table sets forth a summary of changes in the fair value of the Pension Plan’s level 3 assets for the year ended December 31, 2013. There were no level 3 assets in the Pension Plan during 2014.



	2013
Balance, beginning of year	$	927
Sales	(1,648		)
Realized gain on sale	721
Unrealized gains relating to instruments still held at the reporting date	—
Balance, end of year	$	—

Deferred Compensation Plan

The Company maintains a 401(k) retirement plan covering substantially all officers and employees, which permits participants to defer up to the maximum allowable amount determined by the IRS of their eligible compensation.

As part of the 2014 Pension Plan termination, the Company directed the Pension Plan to transfer $7.9 million of the Pension Plan’s surplus assets into a suspense account in the Company’s 401(k) Plan. The Company expects to use the $7.9 million, including any income earned on the assets held in the suspense account, for Company contributions under the Company’s 401(k) Plan within the next six years. At December 31, 2015 and December 31, 2014, the fair values of these assets were recorded in Restricted investments on the Company’s Consolidated Balance Sheets and were $7.1 million and $7.9 million, respectively.

The Company retains the risks and rewards of ownership of the assets held in the suspense account since they have not been allocated to participants as of December 31, 2015; therefore, the $7.1 million of unallocated assets held in the suspense account are recorded on the Company’s Consolidated Balance Sheet as Restricted investments. The Company will record expense for the fair value of the assets at the time the assets are allocated to participants.

During 2015, the Company recorded an expense of $1.0 million for the fair value of the assets that were allocated to participants. Any gains and losses on unallocated assets are reflected in the Company’s Consolidated Statements of Operations and were a $0.1 million gain for 2015. In addition, the Company expects to record additional expenses of approximately $7.1 million as the assets in our 401(k) Plan are allocated to participants over the next six years. Refer to Note 8, Financial Instruments and Fair Value Measurements.

As of December 31, 2015, the assets held in the suspense account were invested in the Guaranteed Income Fund. The Guaranteed Income Fund is valued based upon the contributions made to the fund, plus earnings at guaranteed crediting rates, less withdrawals and fees, and is categorized as a level 2 financial instrument. The Company’s Retirement Plan Investment Committee is responsible for investing decisions and allocation decisions of the suspense account. Refer to Note 8, Financial Instruments and Fair Value Measurements for further information on the three-tier fair value hierarchy.