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, 2018, 2017 and 2016, the Company provided matching contributions of $5.9 million, $4.9 million and $4.4 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 2018, 2017 or 2016.

As of December 31, 2018, the Company had a non-qualified deferred compensation agreement with its Chief Executive Officer (“CEO”). The agreement provides for a lump sum payment upon retirement, no sooner than age 55. As of December 31, 2018, 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, 2018, the Company would have had to pay him $8.3 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, 2018 and 2017 was $32.1 million and $33.9 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.



	December 31, 2018			December 31, 2017
Accumulated Benefit Obligation, End of Year	$	25,777		$	25,457

Change in Projected Benefit Obligation
Projected Benefit Obligation, Beginning of Year	$	32,820		$	28,624
Service Cost	1,200			1,001
Interest Cost	1,242			1,228
Actuarial (Gain) Loss	(2,166		)	2,474
Benefits Paid	(622		)	(507		)
Projected Benefit Obligation, End of Year	$	32,474		$	32,820
Change in Plan Assets
Plan Assets at Fair Value, Beginning of Year	$	—		$	—
Company Contributions	622			507
Benefits Paid	(622		)	(507		)
Plan Assets at Fair Value, End of Year	$	—		$	—
Unfunded Status of the Plan	$	(32,474	)	$	(32,820	)
Amounts Recognized in Accumulated Other Comprehensive Income
Net Loss	5,047			7,745
Total Pension Cost	$	5,047		$	7,745



	2018			2017
Components of Net Periodic Benefit Cost
Service Cost	$	1,200		$	1,001
Interest Cost	1,242			1,228
Amortization of:
Net Loss	532			291
Net Periodic Pension Cost	$	2,974		$	2,520
Weighted Average Assumptions for Expense
Discount Rate	4.50		%	3.80		%
Expected Return on Plan Assets	N/A			N/A
Rate of Compensation Increase	4.40		%	4.40		%

The amount included in accumulated other comprehensive income as of December 31, 2018 that has not yet been recognized as a component of net periodic benefit cost is $5.0 million. The amount included in other accumulated comprehensive income as of December 31, 2018 that is expected to be recognized as a component of net periodic benefit cost in fiscal year 2019 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)
2019	$	9,105
2020	882
2021	874
2022	865
2023	856
Thereafter	19,892

	$	32,474

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. The rabbi trust had a balance of approximately $20.9 million at December 31, 2018. 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 for each of the years ended December 31, 2018, 2017 and 2016. The total liability for this plan at December 31, 2018 and 2017 was approximately $21.2 million and $21.4 million, respectively, and is included in Other Non-Current Liabilities in the accompanying Consolidated Balance Sheets. The current portion of the liability was $1.7 million and $1.4 million as of December 31, 2018 and 2017, respectively.