NOTE 8 RETIREMENT AND DEFERRED COMPENSATION PLANS

The Company has various noncontributory retirement plans covering certain of its domestic and foreign employees. Benefits under the Company’s retirement plans are based on participants’ years of service and annual compensation as defined by each plan. Annual cash contributions to fund pension costs accrued under the Company’s domestic plans are generally at least equal to the minimum funding amounts required by the Employee Retirement Income Security Act of 1974, as amended (ERISA). Certain pension commitments under its foreign plans are also funded according to local requirements or at the Company’s discretion.

The following table presents the changes in the benefit obligations and plan assets for the most recent two years for the Company’s domestic and foreign plans.


	Domestic Plans				Foreign Plans
	2015		2014		2015		2014
Change in benefit obligation:
Benefit obligation at beginning of year	$	171,501	$	129,448	$	91,160	$	84,660
Service cost		10,016		8,042		4,570		4,186
Interest cost		6,355		5,928		1,654		2,711
Curtailment/Settlement		—		—		(227)		—
Prior service cost		—		—		821		—
Actuarial (gain) loss		(19,568)		33,058		(1,486)		14,765
Benefits paid		(7,309)		(4,975)		(2,265)		(3,111)
Foreign currency translation adjustment		—		—		(9,420)		(12,051)
Benefit obligation at end of year	$	160,995	$	171,501	$	84,807	$	91,160


	Domestic Plans				Foreign Plans
	2015		2014		2015		2014
Change in plan assets:
Fair value of plan assets at beginning of year	$	111,094	$	100,567	$	55,394	$	54,075
Actual return on plan assets		(930)		5,431		927		2,875
Employer contribution		10,079		10,071		10,157		8,016
Benefits paid		(7,309)		(4,975)		(2,265)		(3,111)
Foreign currency translation adjustment		—		—		(5,696)		(6,461)
Fair value of plan assets at end of year	$	112,934	$	111,094	$	58,517	$	55,394
Funded status at end of year	$	(48,060)	$	(60,407)	$	(26,288)	$	(35,766)

The following table presents the funded status amounts recognized in the Company’s Consolidated Balance Sheets as of December 31, 2015 and 2014.


	Domestic Plans				Foreign Plans
	2015		2014		2015		2014
Current liabilities	$	(173)	$	(471)	$	—	$	—
Non-current liabilities		(47,887)		(59,936)		(26,288)		(35,766)
	$	(48,060)	$	(60,407)	$	(26,288)	$	(35,766)

The following table presents the amounts not recognized as components of periodic benefit cost that are recognized in accumulated other comprehensive loss as of December 31, 2015 and 2014.


	Domestic Plans				Foreign Plans
	2015		2014		2015		2014
Net actuarial loss	$	47,820	$	64,272	$	33,839	$	36,219
Net prior service cost		—		—		4,036		3,471
Tax effects		(17,933)		(24,102)		(12,211)		(12,762)
	$	29,887	$	40,170	$	25,664	$	26,928

Changes in benefit obligations and plan assets recognized in other comprehensive income in 2015, 2014 and 2013 are as follows:


	Domestic Plans
	2015		2014		2013
Current year actuarial gain (loss)	$	11,048	$	(34,211)	$	20,548
Amortization of net loss		5,404		2,869		5,103
Amortization of prior service cost		—		—		3
	$	16,452	$	(31,342)	$	25,654


	Foreign Plans
	2015		2014		2013
Current year actuarial gain (loss)	$	568	$	(12,589)	$	3,005
Current year prior service cost		(821)		—		—
Amortization of net loss		1,812		1,214		1,416
Amortization of prior service cost		256		313		373
	$	1,815	$	(11,062)	$	4,794

The following table presents the amounts in accumulated other comprehensive loss as of December 31, 2015 expected to be recognized as components of periodic benefit cost in 2016.


	Domestic Plans		Foreign Plans
Amortization of net loss	$	2,988	$	1,510
Amortization of prior service cost		—		343
	$	2,988	$	1,853

Components of net periodic benefit cost:


	Domestic Plans
	2015		2014		2013
Service cost	$	10,016	$	8,042	$	8,539
Interest cost		6,355		5,928		4,992
Expected return on plan assets		(7,590)		(6,585)		(5,775)
Amortization of net loss		5,404		2,869		5,103
Amortization of prior service cost		—		—		3
Net periodic benefit cost	$	14,185	$	10,254	$	12,862


	Foreign Plans
	2015		2014		2013
Service cost	$	4,570	$	4,186	$	3,901
Interest cost		1,654		2,711		2,676
Expected return on plan assets		(1,792)		(1,979)		(1,821)
Amortization of net loss		1,676		1,214		1,416
Amortization of prior service cost		256		313		373
Net periodic benefit cost	$	6,364	$	6,445	$	6,545
Settlement		136		—		—
Curtailment		—		—		1
Total Net periodic benefit cost	$	6,500	$	6,445	$	6,546

The accumulated benefit obligation (“ABO”) for the Company’s domestic defined benefit pension plans was $145.5 million and $153.8 million at December 31, 2015 and 2014, respectively. The accumulated benefit obligation for the Company’s foreign defined benefit pension plans was $65.5 million and $70.7 million at December 31, 2015 and 2014, respectively.

The following table provides the projected benefit obligation (“PBO”), ABO, and fair value of plan assets for all pension plans with an ABO in excess of plan assets as of December 31, 2015 and 2014.


	Domestic Plans				Foreign Plans
	2015		2014		2015		2014
Projected benefit obligation	$	160,995	$	171,501	$	81,343	$	87,759
Accumulated benefit obligation		145,482		153,778		61,990		67,317
Fair value of plan assets		112,934		111,094		55,054		51,993

The following table provides the PBO, ABO, and fair value of plan assets for all pension plans with a PBO in excess of plan assets as of December 31, 2015 and 2014.


	Domestic Plans				Foreign Plans
	2015		2014		2015		2014
Projected benefit obligation	$	160,995	$	171,501	$	81,343	$	87,759
Accumulated benefit obligation		145,482		153,778		61,990		67,317
Fair value of plan assets		112,934		111,094		55,054		51,993

Assumptions:


	Domestic Plans						Foreign Plans
	2015		2014		2013		2015		2014		2013
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate	4.24	%	3.83	%	4.75	%	2.10	%	1.90	%	3.24	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%	3.00	%	3.00	%	3.00	%
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.83	%	4.75	%	3.80	%	1.90	%	3.24	%	3.19	%
Expected long-term return on plan assets	7.00	%	7.00	%	7.00	%	3.54	%	3.79	%	3.79	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%	3.00	%	3.00	%	3.00	%

The Company develops the expected long‑term rate of return assumptions based on historical experience and by evaluating input from the plans’ asset managers, including the managers’ review of asset class return expectations and benchmarks, economic indicators and long‑term inflation assumptions.

In order to determine the 2016 net periodic benefit cost, the Company expects to use the December 31, 2015 discount rates, December 31, 2015 rates of compensation increase assumptions and the same assumed long‑term returns on domestic and foreign plan assets used for the 2015 net periodic benefit cost.

The Company’s domestic and foreign pension plan weighted‑average asset allocations at December 31, 2015 and 2014 by asset category are as follows:

Plan Assets:


	Domestic Plans Assets				Foreign Plans Assets
	at December 31,				at December 31,
	2015		2014		2015		2014
Equity securities	47	%	47	%	4	%	5	%
Fixed income securities	30	%	27	%	1	%	1	%
Corporate debt securities	—		—		3	%	12	%
Infrastructure	8	%	8	%	—		—
Hedge funds	14	%	15	%	—		—
Money market	1	%	3	%	3	%	2	%
Investment Funds	—		—		89	%	80	%
Total	100	%	100	%	100	%	100	%

The Company’s investment strategy for its domestic and foreign pension plans is to maximize the long‑term rate of return on plan assets within an acceptable level of risk. The investment policy strives to have assets sufficiently diversified so that adverse or unexpected results from one security type will not have an unduly detrimental impact on the entire portfolio and accordingly, establishes a target allocation for each asset category within the portfolio. The domestic plan asset allocation is reviewed on a quarterly basis and the foreign plan asset allocation is reviewed annually. Rebalancing occurs as needed to comply with the investment strategy. The domestic plan target allocation for 2016 is 60% equity securities and 40% fixed income securities and infrastructure. The foreign plan target allocation for 2016 is 100% investment funds.

Authoritative guidelines require the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.


	Domestic Fair Value Measurement								Foreign Fair Value Measurement
	at December 31, 2015								at December 31, 2015
(In Thousands $)	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
Cash and Short-term Securities (a)	$	1,189	$	1,189	$	—	$	—	$	1,907	$	1,907	$	—	$	—
USD		—		1,189		—		—		—		—		—		—
EUR		—		—		—		—		—		1,907		—		—
Equity Securities (a)	$	53,985	$	47,725	$	6,260		—	$	2,258	$	2,258		—		—
US Large Cap Equities		—		28,797		—		—		—		—		—		—
US Small Cap Equities		—		5,349		—		—		—		2,258		—		—
Global Equities		—		—		6,260		—		—		—		—		—
International Equities		—		13,579		—		—		—		—		—		—
Fixed Income (a&b)	$	33,291	$	21,918	$	11,373		—	$	559	$	559		—		—
Corporate debts securities		—		—		—		—	$	1,542	$	1,542		—		—
Euro Corporate Bonds (a)		—		—		—		—		—		1,542		—		—
Hedge Fund (b)	$	15,509		—	$	15,509		—		—		—		—		—
Investment Funds		—		—		—		—	$	52,251	$	19,446	$	32,805		—
Mutual Funds in Equities (a)		—		—		—		—		—		3,392		—		—
Mutual Funds in Bonds (a)		—		—		—		—		—		15,501		—		—
Mutual Funds Diversified (a&b)		—		—		—		—		—		553		32,805		—
Infrastructure (c)	$	8,960		—		—	$	8,960		—		—		—		—
Total Investments	$	112,934	$	70,832	$	33,142	$	8,960	$	58,517	$	25,712	$	32,805	$	—


	Domestic Fair Value Measurement								Foreign Fair Value Measurement
	at December 31, 2014								at December 31, 2014
(In Thousands $)	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
Cash and Short-term Securities (a)	$	3,190	$	3,190	$	—	$	—	$	1,289	$	1,289	$	—	$	—
USD		—		3,190		—		—		—		—		—		—
EUR		—		—		—		—		—		1,289		—		—
Equity Securities (a)	$	52,840	$	52,840		—		—	$	2,625	$	2,625		—		—
US Large Cap Equities		—		29,381		—		—		—		—		—		—
US Small Cap Equities		—		8,493		—		—		—		—		—		—
International Equities		—		14,966		—		—		—		2,625		—		—
Fixed Income (a&b)	$	29,762	$	19,713	$	10,049		—	$	574	$	574		—		—
Corporate debts securities		—		—		—		—	$	6,758	$	6,758		—		—
Euro Corporate Bonds (a)		—		—		—		—		—		6,758		—		—
Hedge Fund (b&c)	$	16,371		—	$	16,099	$	272		—		—		—		—
Investment Funds		—		—		—		—	$	44,148	$	14,643	$	29,505		—
Mutual Funds in Equities (a)		—		—		—		—		—		2,687		—		—
Mutual Funds in Bonds (a)		—		—		—		—		—		11,386		—		—
Mutual Funds Diversified (a&b)		—		—		—		—		—		570		29,505		—
Infrastructure (c)	$	8,931		—		—	$	8,931		—		—		—		—
Total Investments	$	111,094	$	75,743	$	26,148	$	9,203	$	55,394	$	25,889	$	29,505	$	—

(a)

Based on third party quotation from financial institution.

(b)

Based on observable market transactions.

(c)

Based on a quarterly statement prepared by the fund manager that reflects contributions, distributions and realized/unrealized gains and losses.

The following table sets forth a summary of changes in fair value of the pension plan investments classified as Level 3 for the year ended December 31, 2015.


	Infrastructure
	Fund		Hedge Fund
Balance, 12/31/13	$	8,587	$	9,731
Purchases, sales and settlements, net		—		(9,387)
Return on assets held		476		(72)
Admin fees and other		(132)		—
Balance, 12/31/14	$	8,931	$	272
Purchases, sales and settlements, net		—		(273)
Return on assets held		147		1
Admin fees and other		(118)		—
Balance, 12/31/15	$	8,960	$	—

CONTRIBUTIONS

Annual cash contributions to fund pension costs accrued under the Company’s domestic plans are generally at least equal to the minimum funding amounts required by ERISA. The Company contributed $10.1 million to its domestic defined benefit plans in 2015 and although the Company has no minimum funding requirement, we plan to contribute approximately $10.0 million in 2016. Contributions to fund pension costs accrued under the Company’s foreign plans are made in accordance with local laws or at the Company’s discretion. The Company contributed approximately $10.2 million to its foreign defined benefit plan in 2015 and expects to contribute approximately $5.0 million in 2016.

ESTIMATED FUTURE BENEFIT PAYMENTS

As of December 31, 2015, the Company expects the plans to make the following estimated benefit payments relating to its defined benefit plans over the next ten years:


	Domestic Plans		Foreign Plans
2016	$	7,489	$	1,831
2017		7,861		1,751
2018		8,393		2,355
2019		8,622		2,705
2020		9,302		3,996
2021 - 2025		58,818		21,751

OTHER PLANS

The Company has a non‑qualified supplemental pension plan for domestic employees which provides for pension amounts that would have been payable from the Company’s principal domestic pension plan if it were not for limitations imposed by income tax regulations. The liability for this plan, which is not funded, was $8.4 million and $8.5 million at December 31, 2015 and 2014, respectively. This amount is included in the liability for domestic plans shown above.

The Company has a defined contribution 401(k) employee savings plan available to substantially all domestic employees. Company matching contributions are made in cash up to a maximum of 3% of the participating employee’s salary subject to income tax regulations. For each of the years ended December 31, 2015, 2014 and 2013, total contributions made by the Company to these plans were approximately $3.0 million, $2.8 million and $2.6 million, respectively.

The Company has several foreign defined contribution plans, which require the Company to contribute a percentage of the participating employee’s salary according to local regulations. For each of the years ended December 31, 2015, 2014 and 2013, total contributions made by the Company to these plans were approximately $2.1 million, $2.3 million and $2.1 million, respectively.

The Company has no additional postretirement or postemployment benefit plans.