Employee Benefit Plans

Defined Benefit Plan:

The following tables summarize changes in the benefit obligation, the plan assets and the funded status of our pension plan as well as the components of net periodic benefit costs, including key assumptions (in thousands). The measurement dates for plan assets and obligations were December 31, 2017 and 2016.



	December 31,
	2017			2016
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year	$	52,975		$	49,715
Service cost	1,223			1,277
Interest cost	2,123			2,078
Actuarial loss⁽¹⁾	4,502			1,976
Benefit payments	(1,825		)	(2,071		)
Benefit obligation at end of year	$	58,998		$	52,975
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	45,498		$	42,341
Actual return on plan assets	7,635			3,228
Employer contributions	2,500			2,000
Benefit payments	(1,825		)	(2,071		)
Fair value of plan assets at end of year	$	53,808		$	45,498
Unfunded status at end of year (included in accounts payable and accrued expenses in 2017 and 2016)	$	(5,190	)	$	(7,477	)
Accumulated benefit obligation	$	58,860		$	52,824
Net loss recognized in accumulated other comprehensive loss	$	15,135		$	16,528

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(1)	The change in actuarial loss is associated primarily to census and mortality table updates and a decrease in the discount rate in 2017.

The following is the required information for other changes in plan assets and benefit obligation recognized in other comprehensive (income) loss (in thousands):



	Year Ended December 31,
	2017			2016			2015
Net loss	$	82		$	1,719		$	1,276
Amortization of net loss ⁽¹⁾	(1,475		)	(1,552		)	(1,423		)
Total recognized in other comprehensive (income) loss	$	(1,393	)	$	167		$	(147	)
Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	213		$	2,103		$	1,262

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(1)	The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $1.1 million.

The following is the required information with an accumulated benefit obligation in excess of plan assets (in thousands):



	December 31,
	2017		2016
Projected benefit obligation	$	58,998	$	52,975
Accumulated benefit obligation	58,860		52,824
Fair value of plan assets	53,808		45,498

The components of net periodic benefit cost are as follows (in thousands):



	Year Ended December 31,
	2017			2016			2015
Service cost	$	1,223		$	1,277		$	1,252
Interest cost	2,123			2,078			1,899
Expected return on plan assets	(3,215		)	(2,971		)	(3,165		)
Amortization of net loss	1,475			1,552			1,423
Total	$	1,606		$	1,936		$	1,409

The assumptions used to develop net periodic benefit cost are shown below:



	Year Ended December 31,
	2017		2016		2015
Discount rate	4.01	%	4.11	%	3.83	%
Salary scale increases	3.50	%	3.50	%	3.50	%
Long-term rate of return on assets	7.00	%	7.00	%	7.50	%

The selection of the discount rate is made annually after comparison to yields based on high quality fixed-income investments. The salary scale is the composite rate which reflects anticipated inflation, merit increases, and promotions for the group of covered participants. The long-term rate of return is a composite rate for the trust. It is derived as the sum of the percentages invested in each principal asset class included in the portfolio multiplied by their respective expected rates of return. We considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This analysis resulted in the selection of 7.00% as the long-term rate of return assumption for 2017.

The assumptions used to develop the actuarial present value of the benefit obligation are shown below:



	Year Ended December 31,
	2017		2016		2015
Discount rate	3.50	%	4.01	%	4.11	%
Salary scale increases	3.50	%	3.50	%	3.50	%

The expected contribution to be paid for the Retirement Plan by us during 2018 is approximately $2.0 million. The expected benefit payments for the next 10 years for the Retirement Plan is as follows (in thousands):



2018	$	2,185
2019	2,339
2020	2,383
2021	2,545
2022	2,690
2023-2027	15,226

The participant data used in determining the liabilities and costs for the Retirement Plan was collected as of January 1, 2017, and no significant changes have occurred through December 31, 2017.

At December 31, 2017, our investment asset allocation compared to our benchmarking allocation model for our plan assets was as follows:



	Portfolio		Benchmark
Cash and Short-Term Investments	4	%	3	%
U.S. Stocks	52	%	57	%
International Stocks	13	%	10	%
U.S. Bonds	25	%	27	%
International Bonds	4	%	3	%
Other	2	%	—	%
Total	100	%	100	%

The fair value of plan assets was determined based on publicly quoted market prices for identical assets, which are classified as Level 1 observable inputs. The allocation of the fair value of plan assets was as follows:



	December 31,
	2017		2016
Cash and Short-Term Investments	17	%	18	%
Large Company Funds	36	%	36	%
Mid Company Funds	6	%	6	%
Small Company Funds	6	%	6	%
International Funds	10	%	10	%
Fixed Income Funds	16	%	16	%
Growth Funds	9	%	8	%
Total	100	%	100	%

Concentrations of risk within our equity portfolio are investments classified within the following sectors: technology, financial services, healthcare, consumer cyclical goods and industrial, which represents approximately 23%, 18%, 15%, 13% and 11% of total equity investments, respectively.

Defined Contribution Plans:

Compensation expense related to our defined contribution plans was $3.9 million in 2017, $3.5 million in 2016 and $3.7 million in 2015.