15. Defined Benefit Pension Obligation

In March 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, 2015 and 2014 is as follows:


*In thousands*	2015			2014
Benefit obligation, beginning of year	$	14,210		$	7,876
Service cost		1,729			1,081
Interest cost		134			163
Plan participants’ contributions		546			486
Actuarial loss (gain)		93			3,057
Plan change		(495	)		—
Employee vested funds brought to plan, net		(382	)		2,183
Expenses paid from assets		(25	)		—
Translation gain		(86	)		(636	)

Benefit obligation, end of year		15,724			14,210

Fair value of plan assets, beginning of year		9,620			5,998
Actual return on plan assets		170			130
Employer contributions		1,471			1,285
Plan participants’ contributions		546			483
Employee vested funds brought to plan, net		(382	)		2,183
Expenses paid from assets		(25	)		—
Translation loss		(99	)		(459	)

Fair value of plan assets, end of year		11,301			9,620

Unfunded liability, end of year	$	4,423		$	4,590

This unfunded liability is recognized in other long-term liabilities in the accompanying consolidated balance sheet as of December 31, 2015 and 2014.

The projected benefit obligation, the accumulated benefit obligation and the fair value of the plan assets as of December 31, 2015 and 2014 were as follows:


*In thousands*	2015		2014
Projected benefit obligation	$	15,724	$	14,210
Accumulated benefit obligation	$	15,012	$	13,839
Fair value of plan assets	$	11,301	$	9,619

The net periodic benefit cost for the plan for the year ended December 31, 2015 and 2014 were as follows:


*In thousands*	2015			2014
Service cost	$	1,729		$	1,081
Interest cost		134			163
Expected return on plan assets		(96	)		(137	)
Amortization of prior service cost		329			150

Net periodic benefit cost	$	2,096		$	1,257

Other changes in the plan assets and the benefit obligation that are recognized in accumulated other comprehensive income (loss) for the years ended December 31, 2015 and 2014 were as follows:


*In thousands*	2015			2014
Pension liability in other comprehensive income, beginning of year	$	(4,359	)	$	(1,495	)
Plan change		495			—
Net gain		(18	)		(3,014	)
Amortization of prior service cost		329			150

Pension liability in other comprehensive income, end of year	$	(3,553	)	$	(4,359	)

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 $0.2 million. In 2015, the plan assumptions were updated to reflect the expected investment return and discount rate on plan assets and disability rate probabilities.

The assumptions used to determine the benefit obligation at December 31, 2015 and 2014 were as follows:


	2015			2014
Discount rate		0.75	%		1.25	%
Rate of compensation increase		1.50	%		1.50	%

The assumptions used to determine net periodic benefit costs for 2015 and 2014 were as follows:


	2015			2014
Discount rate		0.75	%		1.25	%
Expected long-term return on plan assets		0.75	%		1.25	%
Rate of compensation increase		1.50	%		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 approximately $1.4 million to its defined benefit pension plan in 2016. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:


*In thousands*
2016	$	658
2017		698
2018		728
2019		742
2020		750
2021-2025		4,399

	$	7,975