12.  Retirement Benefits

 

As part of the acquisition of NEEO, the Company assumed a defined benefit plan covering all employees in Switzerland. GAAP requires recognition of the funded status, or difference between the fair value of plan assets and the projected benefit obligations of the pension plan on the balance sheet, by recording a corresponding expense in net loss. If the projected benefit obligation exceeds the fair value of plan assets, then that difference or unfunded status represents the pension liability.

 

The Company records a net periodic pension cost in the condensed consolidated statements of comprehensive income (loss). The liabilities and annual income or expense of the pension plan is determined using methodologies that involve several actuarial assumptions, the most significant of which are the discount rate and the long-term rate of asset return, based on the market-related value of assets. The expected long-term rate of return on plan assets during the year is 1.5% Future benefits, to the extent that they are based on compensation, include salary increases consistent with past experiences and estimates of future increases in the Swiss labor market. The fair value of plan assets is determined based on prevailing market prices.

 

The components of net periodic pension cost and other amounts recognized in other comprehensive loss before taxes are as follows (in thousands):

 

 

The components of net periodic benefit cost other than the service cost component are included in the line item “other income (expense), net” in the condensed consolidated statement of operations.

 

The Company contributed $172,000 to the pension plan during the three months ended March 31, 2019. The Company expects to contribute approximately $60,000 to the pension plan during the remainder of 2019.