PENSION PLANS

The Company sponsors defined benefit pension plans that cover substantially all of its French and German employees. Plan benefits are provided in accordance with local statutory requirements. Benefits are based on years of service and employee compensation levels. The plans are unfunded. Pension liabilities and charges are based upon various assumptions, updated annually, including discount rates, future salary increases, employee turnover, and mortality rates.

The Company’s French pension plan provides for termination benefits paid to covered French employees only at retirement, and consists of approximately one to five months of salary. The Company’s German pension plan provides for defined benefit payouts for covered German employees following retirement.

The aggregate net pension expense relating to these two plans are as follows:



	Years Ended
	December 31, 2013			December 31, 2012			December 31, 2011
	(in thousands)
Service costs	$	1,795		$	1,290		$	1,289
Interest costs	1,430			1,447			1,326
Amortization of actuarial loss (gain)	376			(55		)	67
Settlement and other related gain	(59		)	(12		)	(726		)
Curtailment gain	(1,607		)	—			—
Net pension period cost	$	1,935		$	2,670		$	1,956

Settlement and other related gains for the years ended December 31, 2013 and 2012 were insignificant. Settlement and other related gains of $0.7 million for the year ended December 31, 2011 related to restructuring activity in the Company’s Rousset, France operations initiated in the second quarter of 2010. Curtailment gain of $1.6 million for the year ended December 31, 2013 related to restructuring activity in the Company’s Rousset and Nantes operations in France and was recorded as a credit to restructuring charges upon termination of the affected employees during the fourth quarter of 2013.

The change in projected benefit obligation and the accumulated benefit obligation, were as follows:



	December 31, 2013			December 31, 2012
	(in thousands)
Projected benefit obligation at beginning of the year	$	40,621		$	29,751
Service costs	1,795			1,290
Interest costs	1,430			1,447
Settlement	(59		)	(12		)
Curtailment gain	(1,607		)	—
Actuarial (gain) loss	(3,460		)	9,196
Benefits paid	(322		)	(360		)
Foreign currency exchange rate changes	518			(691		)
Projected benefit obligation at end of the year	$	38,916		$	40,621
Accumulated benefit obligation at end of the year	$	35,761		$	34,216

As the defined benefit plans are unfunded, the liability recognized on the consolidated balance sheets as of December 31, 2013 was $38.9 million, of which $0.5 million is included in accrued and other liabilities and $38.4 million is included in other long-term liabilities on the consolidated balance sheets. The liability recognized on the consolidated balance sheets as of December 31, 2012 was $40.6 million, of which $0.5 million is included in accrued and other liabilities and $40.1 million is included in other long-term liabilities on the consolidated balance sheets.

Actuarial assumptions used to determine benefit obligations for the plans were as follows:



	Years Ended
	December 31, 2013	December 31, 2012	December 31, 2011
Assumed discount rate	3.1-4.0%	2.7-3.9%	4.6-5.3%
Assumed compensation rate of increase	2.4-3.0%	2.4-3.0%	2.5-3.0%

The discount rate is based on the quarterly average yield for Euros treasuries with a duration of 30 years, plus a supplement for corporate bonds (Euros, AA rating).

Future estimated expected benefit payments over the next 10 years are as follows:



Years Ending December 31:
	(in thousands)
2014	$	474
2015	625
2016	695
2017	1,053
2018	905
2019 through 2023	9,614
	$	13,366

The Company’s pension liability represents the present value of estimated future benefits to be paid.

With respect to the Company’s unfunded pension plans in Europe, for the year ended December 31, 2013, a change in assumed discount rate and compensation rate used to calculate the present value of pension obligation resulted in a decrease in pension liability of $2.9 million, which was recorded in accumulated other comprehensive income in stockholders’ equity.

The Company’s net pension period cost for 2014 is expected to be approximately $3.2 million. Cash funding for benefits paid was $0.3 million for the year ended December 31, 2013. The Company expects total contribution to these plans to be approximately $0.5 million in 2014.

Amounts recognized in accumulated other comprehensive income consist of net actuarial gain of $2.9 million and loss of $6.8 million at December 31, 2013 and 2012, respectively. Net actuarial gains are expected to be minimal and will be recognized as a component of net periodic pension benefit cost during 2014, which is included in accumulated other comprehensive income in the consolidated statements of stockholders’ equity as of December 31, 2013.