Employee Benefit Plans |
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Employee Benefit Plans | Note 15. Employee Benefit Plans Defined Contribution Plans We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan. Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations. Defined contribution expense was $11.7 million, $10.5 million and $8.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. Included in the 2019, 2018 and 2017 defined contribution expense was $1.6 million, $1.4 million and $1.0 million, respectively, of expense related to matching contributions under the non-U.S. defined contribution plans. Defined Benefit Pension Plans We have defined benefit pension plans for our employees in Europe which provide benefits to employees upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair value hierarchy. The pension plans assumptions reflect the expected investment return and discount rate on plan assets and disability rate probabilities. The benefit obligation at December 31, 2019 for the plans was determined using a discount rate of 0.30% and rate of compensation increase of 2.25%. The 2019 net periodic benefit cost for the plans was determined using discount rates of 0.75%, rates of compensation increase of 2.25% and long-term expected return on plan assets of 0.75%. The benefit obligation at December 31, 2018 for the plans was determined using a discount rate of 0.75%, rate of compensation increase of 2.25% and long-term expected return on plan assets of 0.75%. The 2018 net periodic benefit cost for the plans was determined using discount rates of 0.75% to 1.00%, rates of compensation increase of 2.00% to 2.25% and long-term expected return on plan assets of 0.75%. Summarized information regarding changes in the obligations and plan assets, the funded status and the amounts recorded were as follows (in thousands):
The unfunded liability is reported in other liabilities on the consolidated balance sheet as of December 31, 2019 and 2018. The accumulated benefit obligation is $52.9 million and $39.8 million as of December 31, 2019 and 2018, respectively. The net periodic benefit cost was as follows (in thousands):
The components of net periodic benefit cost other than the service cost component are included in on the consolidated statements of operations.Other changes in the plans assets and the benefit obligation that is recognized in accumulated other comprehensive loss were as follows, net of tax (in thousands):
The prior service cost for the pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $0.2 million. The actuarial loss for the pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $0.7 million. We expect to contribute a total of $4.1 million to the pension plans in 2020. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):
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