18. Defined Benefit Pension Obligation

On March 1, 2013, the Company established a defined benefit pension plan for employees in its Switzerland subsidiary. The plan provides benefits to employees upon retirement, death or disability. The Company uses December 31 as the year-end measurement date for this plan.

Summarized information regarding changes in the plan obligations and plan assets, the funded status and the amounts recorded as of December 31, 2013 is as follows:


*In thousands*
Changes in benefit obligation
Benefit obligation at plan establishment	$	5,621
Service cost		994
Interest cost		105
Plan participants’ contributions		283
Actuarial gain		(192	)
Benefits received		1,065

Benefit obligation as of December 31, 2013		7,876

Changes in plan assets
Fair value of plan assets at plan establishment		3,853
Actual return on plan assets		77
Employer contributions		720
Plan participants’ contributions		283
Benefits received		1,065

Fair value of plan assets as of December 31, 2013		5,998

Unfunded liability as of December 31, 2013	$	1,878

This unfunded liability is recognized in other long-term liabilities in the accompanying consolidated balance sheet as of December 31, 2013.

The projected benefit obligation, the accumulated benefit obligation and the fair value of the plan assets as of December 31, 2013 were as follows:


*In thousands*
Projected benefit obligation	$	7,876
Accumulated benefit obligation	$	7,947
Fair value of plan assets	$	5,998

The net periodic benefit cost for the defined benefit pension plan for the year ended December 31, 2013 was as follows:


*In thousands*
Service cost	$	994
Interest cost		105
Expected return on plan assets		(85	)
Amortization of prior service cost		134

Net periodic benefit cost	$	1,148

Other changes in the plan assets and the benefit obligation that are recognized in accumulated other comprehensive income (loss) and other comprehensive loss for the year ended December 31, 2013 were as follows:


*In thousands*
Establishment of plan	$	(1,768	)
Net gain		139
Amortization of prior service cost		134

Total	$	(1,495	)

The prior service cost for the defined benefit pension plan that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost over the next fiscal year is $161,000.

The assumptions used to determine the benefit obligation at December 31, 2013 were as follows:


Discount rate	2.25	%
Rate of compensation increase	1.50	%

The assumptions used to determine net periodic benefit costs for 2013 were as follows:


Discount rate	2.00	%
Expected long-term return on plan assets	2.00	%
Rate of compensation increase	1.50	%

The assets of the plan are held in a collective investment account. All plan investments are classified as level 2 within the fair value hierarchy.

The Company expects to contribute $942,000 to its defined benefit pension plan in 2014.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:


*In thousands*
2014	$	370
2015		423
2016		456
2017		486
2018		509
2019 - 2023		2,631

Total	$	4,875