P. RETIREMENT PLANS

ASC 715, “Compensation—Retirement Benefits” requires an employer with defined benefit plan or other postretirement benefit plan to recognize an asset or a liability on its balance sheet for the overfunded or underfunded status of the plan. The pension asset or liability represents a difference between the fair value of the pension plan’s assets and the projected benefit obligation.

Defined Benefit Pension Plans

Teradyne has defined benefit pension plans covering a portion of domestic employees and employees of certain non-U.S. subsidiaries. Benefits under these plans are based on employees’ years of service and compensation. Teradyne’s funding policy is to make contributions to these plans in accordance with local laws and to the extent that such contributions are tax deductible. The assets of the U.S. qualified pension plan consist primarily of fixed income and equity securities. In addition, Teradyne has unfunded qualified foreign plans as well as an unfunded supplemental executive defined benefit plan in the United States to provide retirement benefits in excess of levels allowed by the Employment Retirement Income Security Act (“ERISA”) and the Internal Revenue Code (“IRC”).

In the three months ended April 1, 2018, Teradyne contributed $0.6 million to the U.S. supplemental executive defined benefit pension plan and $0.2 million to certain qualified pension plans for non-U.S. subsidiaries.

For the three months ended April 1, 2018 and April 2, 2017, Teradyne’s net periodic pension cost was comprised of the following:


	For the Three Months Ended
	April 1, 2018						April 2, 2017
	United States			Foreign			United States			Foreign
	(in thousands)
Service cost	$	571		$	213		$	560		$	185
Interest cost		2,997			186			3,312			163
Expected return on plan assets		(3,369	)		(5	)		(3,000	)		(6	)
Amortization of prior service cost		14			—			18			—

Total net periodic pension cost	$	213		$	394		$	890		$	342

Postretirement Benefit Plan

In addition to receiving pension benefits, Teradyne employees in the United States who meet early retirement eligibility requirements as of their termination dates may participate in Teradyne’s Welfare Plan, which includes medical and dental benefits up to age 65. Death benefits provide a fixed sum to retirees’ survivors and are available to all retirees. Substantially all of Teradyne’s current U.S. employees could become eligible for these benefits, and the existing benefit obligation relates primarily to those employees.

For the three months ended April 1, 2018 and April 2, 2017, Teradyne’s net periodic postretirement benefit cost (income) was comprised of the following:


	For the Three Months Ended
	April 1, 2018			April 2, 2017
	(in thousands)
Service cost	$	9		$	10
Interest cost		50			50
Amortization of prior service credit		(93	)		(124	)
Special termination benefits		1,626			—

Total net periodic postretirement benefit cost (income)	$	1,592		$	(64	)