NOTE 9 RETIREMENT AND DEFERRED COMPENSATION PLANS

We have various noncontributory retirement plans covering certain of our domestic and foreign employees. Benefits under our 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 our 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 our foreign plans are also funded according to local requirements or at our discretion.

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


	Domestic Plans				Foreign Plans
	2018		2017		2018		2017
Change in benefit obligation:
Benefit obligation at beginning of year	$	198,450	$	175,879	$	109,030	$	93,178
Service cost		11,396		9,706		5,954		5,526
Interest cost		6,878		7,010		1,828		1,747
Special termination benefit charge		—		—		62		—
Curtailment/Settlement		—		—		(1,751)		—
Business acquired		—		—		1,937		—
Prior service cost		—		—		35		1,419
Actuarial loss (gain)		(23,510)		21,085		(3,743)		(2,653)
Benefits paid		(12,411)		(15,230)		(3,288)		(3,489)
Foreign currency translation adjustment		—		—		(5,153)		13,302
Benefit obligation at end of year	$	180,803	$	198,450	$	104,911	$	109,030


	Domestic Plans				Foreign Plans
	2018		2017		2018		2017
Change in plan assets:
Fair value of plan assets at beginning of year	$	169,600	$	126,246	$	73,384	$	61,912
Actual return on plan assets		(7,642)		18,372		(487)		2,472
Employer contribution		20,411		40,212		2,780		3,824
Benefits paid		(12,411)		(15,230)		(3,288)		(3,489)
Foreign currency translation adjustment		—		—		(3,397)		8,665
Fair value of plan assets at end of year	$	169,958	$	169,600	$	68,992	$	73,384
Funded status at end of year	$	(10,845)	$	(28,850)	$	(35,919)	$	(35,646)

The following table presents the funded status amounts recognized in our Consolidated Balance Sheets as of December 31, 2018 and 2017.


	Domestic Plans				Foreign Plans
	2018		2017		2018		2017
Non-current assets	$	207	$	—	$	500	$	297
Current liabilities		(430)		(423)		(8)		(9)
Non-current liabilities		(10,622)		(28,427)		(36,411)		(35,934)
	$	(10,845)	$	(28,850)	$	(35,919)	$	(35,646)

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, 2018 and 2017.


	Domestic Plans				Foreign Plans
	2018		2017		2018		2017
Net actuarial loss	$	48,776	$	58,260	$	29,761	$	33,703
Net prior service cost		—		—		4,656		5,341
Tax effects		(17,876)		(20,057)		(4,855)		(12,651)
	$	30,900	$	38,203	$	29,562	$	26,393

Changes in benefit obligations and plan assets recognized in other comprehensive income in 2018, 2017 and 2016 are as follows:


	Domestic Plans
	2018		2017		2016
Current year actuarial (loss) gain	$	4,611	$	(12,593)	$	(4,335)
Amortization of net loss		4,873		3,205		3,283
	$	9,484	$	(9,388)	$	(1,052)


	Foreign Plans
	2018		2017		2016
Current year actuarial (loss) gain	$	534	$	2,952	$	(6,251)
Current year prior service cost		(35)		(1,399)		(656)
Recognition due to curtailment		1,692		—		—
Amortization of net loss		1,716		1,895		1,540
Amortization of prior service cost		720		400		350
	$	4,627	$	3,848	$	(5,017)

The following table presents the amounts in accumulated other comprehensive loss as of December 31, 2018 expected to be recognized as components of periodic benefit cost in 2019.


	Domestic Plans		Foreign Plans
Amortization of net loss	$	2,009	$	1,465
Amortization of prior service cost		—		458
	$	2,009	$	1,923

Components of net periodic benefit cost:


	Domestic Plans
	2018		2017		2016
Service cost	$	11,396	$	9,706	$	9,041
Interest cost		6,878		7,010		6,776
Expected return on plan assets		(11,257)		(9,880)		(8,471)
Amortization of net loss		4,873		3,205		3,283
Net periodic benefit cost	$	11,890	$	10,041	$	10,629


	Foreign Plans
	2018		2017		2016
Service cost	$	5,954	$	5,526	$	4,556
Interest cost		1,828		1,747		1,892
Expected return on plan assets		(2,610)		(2,409)		(2,181)
Amortization of net loss		1,716		1,895		1,540
Amortization of prior service cost		720		400		350
Net periodic benefit cost	$	7,608	$	7,159	$	6,157
Curtailment		(59)		—		—
Special termination benefit charge		62		—		—
Total Net periodic benefit cost	$	7,611	$	7,159	$	6,157

The accumulated benefit obligation (“ABO”) for our domestic defined benefit pension plans was $163.0 million and $178.9 million at December 31, 2018 and 2017, respectively. The ABO for our foreign defined benefit pension plans was $80.9 million and $84.7 million at December 31, 2018 and 2017, 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, 2018 and 2017.


	Domestic Plans				Foreign Plans
	2018		2017		2018		2017
Projected benefit obligation	$	11,052	$	11,478	$	93,029	$	89,618
Accumulated benefit obligation		9,216		9,291		68,981		65,524
Fair value of plan assets		—		—		56,611		54,052

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, 2018 and 2017.


	Domestic Plans				Foreign Plans
	2018		2017		2018		2017
Projected benefit obligation	$	11,052	$	198,450	$	92,555	$	84,799
Accumulated benefit obligation		9,216		178,878		68,506		59,383
Fair value of plan assets		—		169,600		56,136		49,233

During 2018, our domestic employee retirement plan has plan assets in excess of the PBO.

Assumptions:


	Domestic Plans						Foreign Plans
	2018		2017		2016		2018		2017		2016
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate	4.20	%	3.55	%	4.05	%	1.82	%	1.62	%	1.65	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%	3.01	%	3.02	%	3.00	%
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate	3.55	%	4.05	%	4.24	%	1.62	%	1.65	%	2.10	%
Expected long-term return on plan assets	7.00	%	7.00	%	7.00	%	3.66	%	3.66	%	3.66	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%	3.02	%	3.00	%	3.00	%

We develop 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 2019 net periodic benefit cost, we expect to use the December 31, 2018 discount rates, December 31, 2018 rates of compensation increase assumptions and the same assumed long‑term returns on domestic and foreign plan assets used for the 2018 net periodic benefit cost.

Our domestic and foreign pension plan weighted‑average asset allocations at December 31, 2018 and 2017 by asset category are as follows:

Plan Assets:


	Domestic Plans Assets				Foreign Plans Assets
	at December 31,				at December 31,
	2018		2017		2018		2017
Equity securities	44	%	42	%	4	%	4	%
Fixed income securities	29	%	25	%	1	%	1	%
Corporate debt securities	—		—		3	%	3	%
Infrastructure	7	%	6	%	—		—
Hedge funds	10	%	9	%	—		—
Money market	5	%	13	%	1	%	1	%
Investment Funds	—		—		91	%	91	%
Real estate	5	%	5	%	—		—
Total	100	%	100	%	100	%	100	%

Our investment strategy for our 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 2019 is 60% equity securities and 40% fixed income securities and infrastructure. The foreign plan target allocation for 2019 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, 2018								at December 31, 2018
(In Thousands $)	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
Cash and Short-term Securities (a)	$	8,964	$	8,964	$	—	$	—	$	718	$	718	$	—	$	—
USD		—		8,964		—		—		—		—		—		—
EUR		—		—		—		—		—		718		—		—
Equity Securities (a)	$	66,707	$	66,707		—		—	$	2,591	$	2,591		—		—
U.S. Large Cap Equities		—		38,804		—		—		—		—		—		—
U.S. Small Cap Equities		—		7,747		—		—		—		—		—		—
International Equities		—		20,156		—		—		—		2,591		—		—
Fixed Income (a&b)	$	32,272	$	32,272		—		—	$	717	$	717		—		—
Corporate debts securities		—		—		—		—	$	2,097	$	2,097		—		—
Euro Corporate Bonds (a)		—		—		—		—		—		2,097		—		—
Investment Funds		—		—		—		—	$	62,869	$	22,122	$	40,747		—
Mutual Funds in Equities (a)		—		—		—		—		—		3,339		—		—
Mutual Funds in Bonds (a)		—		—		—		—		—		18,060		—		—
Mutual Funds Diversified (a&b)		—		—		—		—		—		723		40,747		—
Total Investments in Fair Value Hierarchy	$	107,943	$	107,943	$	—	$	—	$	68,992	$	28,245	$	40,747	$	—
Investments at Net Asset Value per Share		62,015		—		—		—		—		—		—		—
Total Investments	$	169,958	$	107,943	$	—	$	—	$	68,992	$	28,245	$	40,747	$	—


	Domestic Fair Value Measurement								Foreign Fair Value Measurement
	at December 31, 2017								at December 31, 2017
(In Thousands $)	Total		(Level 1)		(Level 2)		(Level 3)		Total		(Level 1)		(Level 2)		(Level 3)
Cash and Short-term Securities (a)	$	21,644	$	21,644	$	—	$	—	$	432	$	432	$	—	$	—
USD		—		21,644		—		—		—		—		—		—
EUR		—		—		—		—		—		432		—		—
Equity Securities (a)	$	63,799	$	63,799		—		—	$	3,111	$	3,111		—		—
U.S. Large Cap Equities		—		37,456		—		—		—		—		—		—
U.S. Small Cap Equities		—		7,569		—		—		—		—		—		—
International Equities		—		18,774		—		—		—		3,111		—		—
Fixed Income (a&b)	$	27,904	$	27,904		—		—	$	779	$	779		—		—
Corporate debts securities		—		—		—		—	$	2,256	$	2,256		—		—
Euro Corporate Bonds (a)		—		—		—		—		—		2,256		—		—
Investment Funds		—		—		—		—	$	66,807	$	24,810	$	41,997		—
Mutual Funds in Equities (a)		—		—		—		—		—		4,356		—		—
Mutual Funds in Bonds (a)		—		—		—		—		—		19,639		—		—
Mutual Funds Diversified (a&b)		—		—		—		—		—		815		41,997		—
Total Investments in Fair Value Hierarchy	$	113,347	$	113,347	$	—	$	—	$	73,384	$	31,387	$	41,997	$	—
Investments at Net Asset Value per Share		56,253		—		—		—		—		—		—		—
Total Investments	$	169,600	$	113,347	$	—	$	—	$	73,384	$	31,387	$	41,997	$	—

(a)

Based on third party quotation from financial institution.

(b)

Based on observable market transactions.

CONTRIBUTIONS

Annual cash contributions to fund pension costs accrued under our domestic plans are generally at least equal to the minimum funding amounts required by ERISA. We contributed $20.4 million to our domestic defined benefit plans in 2018 and although we have no minimum funding requirement, we plan to contribute approximately $0.4 million to pay our ongoing SERP annuity contracts in 2019. Contributions to fund pension costs accrued under our foreign plans are made in accordance with local laws or at our discretion. We contributed approximately $2.8 million to our foreign defined benefit plan in 2018 and expect to contribute approximately $4.3 million in 2019.

ESTIMATED FUTURE BENEFIT PAYMENTS

As of December 31, 2018, we expect the plans to make the following estimated benefit payments relating to our defined benefit plans over the next ten years:


	Domestic Plans		Foreign Plans
2019	$	9,929	$	4,033
2020		10,380		3,490
2021		10,583		3,409
2022		11,103		3,653
2023		11,644		4,708
2024 - 2028		66,502		31,426

OTHER PLANS

We have a non‑qualified supplemental pension plan for domestic employees which provides for pension amounts that would have been payable from our 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 $11.1 million and $11.5 million at December 31, 2018 and 2017, respectively. This amount is included in the liability for domestic plans shown above.

We have 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, 2018, 2017 and 2016, total contributions made to these plans were approximately $3.7 million, $3.3 million and $3.1 million, respectively.

We have several foreign defined contribution plans, which require us to contribute a percentage of the participating employee’s salary according to local regulations. For each of the years ended December 31, 2018, 2017 and 2016, total contributions made to these plans were approximately $2.4 million, $2.2 million and $1.9 million, respectively.

We have no additional postretirement or postemployment benefit plans.