Benefit Plans

The Company’s employees participate in an Employee Retirement Savings Plan (the “Retirement Plan”) under Section 401(k) of the Internal Revenue Code that covers substantially all U.S. based salaried employees. Employees may contribute a percentage of eligible compensation to the plan, subject to certain limits under the Internal Revenue Code. For the years ended December 31, 2015, 2014 and 2013, the Company provided matching contributions of $3.8 million, $3.2 million and $3.4 million, respectively.

The Company has two non-contributory defined benefit pension plans covering certain of the Company’s executives. Retirement benefits are based on years of service, employees’ average compensation for the last five years prior to retirement and social security benefits. Currently, the plans are not funded. The Company purchased and is the beneficiary of life insurance policies for certain participants enrolled in the plans. There were no significant transactions between the employer or related parties and the plans during 2015, 2014 or 2013.

As of December 31, 2015, the Company had a non-qualified deferred compensation agreement with its Chief Executive Officer (“CEO”). In August 2012, the CEO's agreement was amended to eliminate the tax gross-up provision which was previously applicable to his lump sum retirement payment and in exchange for the elimination of the tax gross-up provision, the amount of the lump sum retirement payment which Mr. Zoley is entitled to receive has been proportionately increased so that he would receive substantially the same net benefit as he would have otherwise received had the tax gross-up remained in the plan. The current agreement provides for a lump sum payment upon retirement, no sooner than age 55. As of December 31, 2015, the CEO had reached age 55 and was eligible to receive the payment upon retirement. If the Company’s CEO had retired as of December 31, 2015, the Company would have had to pay him $7.4 million. The long-term portion of the pension liability related to the defined benefit plans and the deferred compensation agreement with the CEO as of December 31, 2015 and 2014 was $25.1 million and $24.9 million, respectively, and is included in Other Non-Current liabilities in the accompanying consolidated balance sheets.

The following table summarizes key information related to the Company’s pension plans and retirement agreements. The table illustrates the reconciliation of the beginning and ending balances of the benefit obligation showing the effects during the periods presented attributable to service cost, interest cost, plan amendments, termination benefits, actuarial gains and losses. The assumptions used in the Company’s calculation of accrued pension costs are based on market information and the Company’s historical rates for employment compensation and discount rates.



	2015			2014
Accumulated Benefit Obligation, End of Year	$	20,323		$	19,280

Change in Projected Benefit Obligation
Projected Benefit Obligation, Beginning of Year	$	25,826		$	20,032
Service Cost	1,173			821
Interest Cost	1,082			935
Actuarial (Gain) Loss	(1,818		)	4,324
Benefits Paid	(328		)	(286		)
Projected Benefit Obligation, End of Year	$	25,935		$	25,826
Change in Plan Assets
Plan Assets at Fair Value, Beginning of Year	$	—		$	—
Company Contributions	328			286
Benefits Paid	(328		)	(286		)
Plan Assets at Fair Value, End of Year	$	—		$	—
Unfunded Status of the Plan	$	(25,935	)	$	(25,826	)
Amounts Recognized in Accumulated Other Comprehensive Income
Net Loss	4,743			6,988
Total Pension Cost	$	4,743		$	6,988



	2015			2014
Components of Net Periodic Benefit Cost
Service Cost	$	1,173		$	821
Interest Cost	1,082			935
Amortization of:
Net Loss	427			127
Net Periodic Pension Cost	$	2,682		$	1,883
Weighted Average Assumptions for Expense
Discount Rate	4.75		%	4.35		%
Expected Return on Plan Assets	N/A			N/A
Rate of Compensation Increase	4.40		%	4.34		%

The amount included in accumulated other comprehensive income as of December 31, 2015 that has not yet been recognized as a component of net periodic benefit cost in fiscal year 2015 is $3 million. The amount included in other accumulated comprehensive income as of December 31, 2015 that is expected to be recognized as a component of net periodic benefit cost in fiscal year 2016 is $0.2 million.

The benefit payments reflected in the table below represent the Company’s obligations to employees that are eligible for retirement or have already retired and are receiving deferred compensation benefits:



Fiscal Year	Pension Benefits
	(In thousands)
2016	$	7,968
2017	645
2018	640
2019	768
2020	785
Thereafter	15,129

	$	25,935

The Company also maintains The GEO Group Inc. Deferred Compensation Plan (“Deferred Compensation Plan”), a non-qualified deferred compensation plan for employees who are ineligible to participate in its qualified 401(k) plan. Eligible employees may defer a fixed percentage of their salary and the Company matches employee contributions up to a certain amount based on the employee’s years of service. Payments will be made at retirement age of 65, at termination of employment or earlier depending on the employees’ elections. The Company established a rabbi trust; the purpose of which is to segregate the assets of the Deferred Compensation Plan from the Company’s cash balances. The funds in the rabbi trust are included in Restricted Cash and Investments in the accompanying Consolidated Balance Sheets. These funds are not available to the Company for any purpose other than to fund the Deferred Compensation Plan; however, these funds may be available to the Company’s creditors in the event the Company becomes insolvent. All employee and employer contributions relative to the Deferred Compensation Plan are made directly to the rabbi trust. The Company recognized expense related to its contributions of $0.1 million, $0.3 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013 respectively. The total liability for this plan at December 31, 2015 and 2014 was $13.8 million and $11.0 million, respectively and is included in Other Non-Current Liabilities in the accompanying Consolidated Balance Sheets. The current portion of the liability was $1.2 million and $0.9 million as of December 31, 2015 and 2014, respectively.