(9)	Employee benefit plans

Sevcon has defined contribution plans covering the majority of its U.S. and U.K. employees in the controls business. There is also a small defined contribution plan covering senior managers in the capacitor business. The Company has frozen the U.K. and U.S. defined benefit plans for which no future benefits are being earned by employees. The following table sets forth the components of the net pension cost for the three and nine month periods ended July 4, 2015 and June 28, 2014, respectively:

	(in thousands of dollars)
	Three Months ended						Nine Months ended
	July 4, 2015			June 28, 2014			July 4, 2015			June 28, 2014
Interest cost	$	308		$	330		$	928		$	973
Expected return on plan assets		(311	)		(331	)		(937	)		(978	)
Amortization of net loss		66			57			198			170
Net periodic benefit cost		63			56			189			165
Net cost of defined contribution plans	$	87		$	125		$	359		$	372
Net cost of all employee benefit plans	$	150		$	181		$	548		$	537

The following table sets forth the movement in the liability for pension benefits in the nine month periods ended July 4, 2015 and June 28, 2014, respectively:

	(in thousands of dollars)
	Nine Months ended
	July 4, 2015			June 28, 2014
Liability for pension benefits at beginning of period		9,529			8,354
Interest cost		928			973
Expected return on plan assets		(937	)		(978	)
Plan contributions		(497	)		(429	)
Effect of exchange rate changes		(349	)		400
Balance at end of period		8,674			8,320

Amounts recognized in the balance sheet consist of:

	(in thousands of dollars)
	July 4, 2015			September, 30, 2014
Non-current liabilities		$	8,674		$	9,529

Amounts recognized in accumulated other comprehensive loss consist of:

	(in thousands of dollars)
	Three Months ended				Nine Months ended
	July 4, 2015		June 28, 2014		July 4, 2015		June 28, 2014
Actuarial loss, net of $16 and $47 tax benefit for the three and nine month periods, respectively, (2014: net of $13 and $39 tax benefit for the three and nine month periods, respectively)	$	50	$	44	$	151	$	131

Sevcon, Inc. contributed $150,000 to its frozen U.S. defined benefit plan in the nine months ended July 4, 2015; it presently anticipates contributing a further $50,000 to fund its U.S. plan in the remainder of fiscal 2015. In addition, employer contributions to the frozen U.K. defined benefit plan were $347,000 in the first nine months and are estimated to total $464,000 in 2015.

In the second quarter of 2015, the assets of the frozen U.K. defined benefit plan (the Sevcon Limited Pension Plan, “the Plan”) were reorganized by the trustees of the Plan. The trustees appointed Legal & General Investment Management to sell the Plan investments held in pooled funds previously managed by Standard Life Investments and a holding in the Absolute Return Fund managed by Ruffer LLP. The cash proceeds were subsequently invested as to 80% in an investment in Adept Strategy 9 Fund, a sub-fund of Adept Investment Management plc, a Qualifying Investor Alternative Investment Fund authorized and supervised by the Central Bank of Ireland. The other 20% of the cash proceeds were invested in a range of Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds to match the profile of the Plan’s liability cash flows.

The table below presents information about the Company’s pension plan assets measured and recorded at fair value as of July 4, 2015 and indicates the fair value hierarchy of the inputs utilized by the Company to determine the fair values.

(in thousands of dollars)

	Level 1* (Quoted prices in active markets)		Level 2** (Significant observable inputs)		Level 3*** (Unobservable inputs)
Mutual Funds
Adept Strategy 9 Fund (a sub-fund of Adept Investment Management plc)				13,848

Schroder Matching Plus Nominal and Index Linked Liability Driven Investment Swap Funds (funds Managed by Schroder Investment Management Limited)				3,437

U.S. Equity Funds		376

U.S. Mutual Funds and Fixed Income Funds		2,672

Other Types of Investments		349
Cash
Total		3,397		17,285

The table below presents information about the Company’s pension plan assets measured and recorded at fair value as of September 30, 2014:

(in thousands of dollars)

	Level 1* (Quoted prices in active markets)		Level 2** (Significant observable inputs)	Level 3*** (Unobservable inputs)
Mutual Funds
Standard Life Pension Global Absolute Returns Strategies Fund	7,187
Standard Life UK Indexed Linked Fund	1,856
Standard Life Long Corporate Bond Fund		1,785
CF Ruffer Absolute Return Fund		7,177
U.S. Mutual Funds		2,431
U.S. Exchange Traded Funds		348
Other Types of Investments
Cash		333
Total		21,117

*	Level 1 inputs are quoted, unadjusted prices in active markets for identical assets or liabilities at the measurement date. The Company’s pension plan financial assets in U.S. Equity Funds, Mutual Funds and Fixed Income Funds are Level 1 assets

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The Company’s pension plan financial assets held in the Adept Strategy 9 Fund and the Schroder investments are Level 2 assets. The Company uses the Net Asset Value to determine the fair value of underlying investments which (a) do not have readily determinable fair value; and (b) prepare their financial statements consistent with the measurement principles of an investment company. The Funds are not exchange traded. The Funds are not subject to any redemption notice periods or restrictions and can be redeemed on a daily basis. No gates or holdbacks or dealing suspensions are being applied to the Funds. The Funds are of perpetual duration.

***	Level 3 inputs are unobservable inputs for an asset or liability. The Company currently does not have any Level 3 pension plan financial assets.

The following estimated benefit payments have been, or are expected, to be paid:

	(in thousands of dollars)
2015	$	668
2016		707
2017		697
2018		695
2019		671
2020 – 2024	$	3,658