Note 10 - Accrued Pension Liabilities

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

NOTE 1 0: - ACCRUED PENSION LIABILITIES

As of

December 31, 2017

and

2016,

the defined benefits plans that are accounted for in the Company’s consolidated financial statements are the pension plans in Germany and India. Consistent with the requirements of local law, the Company deposits funds for certain plans with insurance companies,

third

-party trustees, or into government-managed accounts, and/or accrues for the unfunded portion of the obligation.

The Company

’s pension obligation in Germany relating to the unvested pension claims (i.e. future obligation that will result from future service period) of the employees were outsourced in

November 2010

to an external insurance company (“Nuremberger Versicherung”). From and after the outsourcing date, the Company is required to pay premiums to the external insurance company and in return the pension benefits earned by the German employees are covered by the Company’s arrangement with the

external insurance company. The Company legally is released from its obligations to the German employees once the premiums are paid, and it is

no

longer subject to any of the risks and rewards associated with the benefit obligations covered and the plan assets transferred to

the external insurance company. Since the outsourcing arrangement meets the requirements of a nonparticipating annuity contract, the Company treats the costs of the outsourcing arrangement as the costs of the benefits being earned in accordance with ASC Paragraph

715

-

30

-

25

-

7

of ASC

715

“Compensation—Retirement Benefits.”

The following tables provide a reconciliation of the changes in the pension plans

’ benefit obligation and the fair value of assets for the years ended

December 31, 2017

and

2016,

and the statement of funded status as of

December 31, 2017

and

2016:

	December 31,
	201 7			2016
Accumulated benefit obligation	$	871		$	792
Change in benefit obligation
Benefit obligation at beginning of year	$	803		$	738
Service cost		4			4
Interest cost		14			17
Benefits paid from the plan		(22	)		(55	)
Actuarial (gain) loss		(22	)		121
Exchange rates and others		106			(22	)
Benefit obligation at end of year	$	883		$	803
Change in plan assets
Fair value of plan assets at beginning of year		-			54
Actual return on plan assets		-			3
Benefits paid from the plan		-			(58	)
Exchange rates		-			1
Fair value of plan assets at end of year	$	-		$	-

The assumptions used in the measurement of the Company

’s pension expense and benefit obligations as of

December 31, 2017,

2016

and

2015

are as follows:

	Year ended December 31,
	201 7			2016			201 5
Weighted-average assumptions
Discount rate		1.8	%		1.7	%		2.5	%
Expected return on plan assets		-			4.59	%		4.28	%
Rate of compensation increase		2.5	%		2.5	%		2.5	%

The amounts reported for net periodic pension costs and the respective benefit obligation amounts are dependent upon the actuarial assumptions used. The Company reviews historical trends, future expectations, current market conditions, and external data to determine the assumptions. The discount rate is determined considering the yield of government bonds. The rate of

compensation increase is determined by the Company, based on its long-term plans for such increases.

The following table provides the components of net periodic benefit cost for the years ended

December 31, 2017

,

2016

and

2015:

	December 31,
	201 7		2016			201 5
Components of net periodic benefit cost
Service cost	$	4	$	4		$	5
Interest cost		14		17			17
Expected return on plan assets		-		(3	)		(5	)
Amortization of net loss		22		15			20
Net periodic benefit cost	$	40	$	33		$	37

	December 31,
	201 7			2016
Net amounts recognized in the consolidated balance sheets as of December 31, 201 7 and 2016 consist of:
Current liabilities	$	-		$	-
Noncurrent liabilities		883			803
Net amounts recognized in the consolidated balance sheets	$	883		$	803
Net amounts recognized in accumulated other comprehensive income as of December 31, 201 7 and 2016 consist of:
Net actuarial loss	$	(409	)	$	(454	)
Net amounts recognized in accumulated other comprehensive loss	$	(409	)	$	(454	)

The estimated amount that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in

20

18

is as follows:

	201 8
Net actuarial loss and other	$	20

Benefit payments are expected to be paid as follows:

Year ending December 31,
2018	$	9
2019		9
2020		10
2021		31
2022		27
2023-2027		112
	$	198

The Company had

no

pension plan assets at

December 31,

201

7.

Regarding the policy for amortizing actuarial gains or losses for pension and post-employment plans, the Company has chosen the “corridor” option. This option consists of recognizing in the consolidated statements of operations, the part of unrecognized actuarial gains or losses exceeding

10%

of the greater of the PBO or the market value of the plan assets. If amortization is required, the minimum amortization amount is that excess divided by the average remaining service period of the active employees expected to receive benefits under the plan.

Actuarial gains were recognized in other comprehensive income (loss) in the amount of

$24

for the year ended

December 31, 2017.

Actuarial losses were recognized in other comprehensive income (loss) in the amount of

$117

for the year ended

December 31, 2016.

Actuarial gains were recognized in other comprehensive income (loss) in the amount of

$63

for the year ended

December 31, 2015.