v3.25.3
Defined Benefit Plan
 12 Months Ended
Dec. 31, 2024
Postemployment Benefits [Abstract]  
Compensation and Employee Benefit Plans [Text Block] Defined Benefit Plan
In connection with the acquisition of Arnold, the Company has a defined benefit plan covering substantially all of Arnold’s employees at its Lupfig, Switzerland location. The benefits are based on years of service and the employees’ highest average compensation during the specific period.
The following table sets forth the plan’s funded status and amounts recognized in the Company’s consolidated balance sheets at December 31, 2024, 2023 and 2022:
December 31,
(in thousands)
202420232022
Change in benefit obligation:
Benefit obligation, beginning of year$13,847 $10,649 $12,311 
Service cost538 369 432 
Interest cost243 257 42 
Actuarial (gain)/loss1,125 1,090 (1,792)
Plan amendment(67)(67)(73)
Employee contributions and transfer572 444 349 
Benefits paid(96)1,037 74 
Settlement(342)(1,139)(518)
Foreign currency translation(935)1,207 (176)
Benefit obligation$14,885 $13,847 $10,649 
Change in plan assets:
Fair value of assets, beginning of period$11,426 $9,521 $9,449 
Actual return on plan assets(600)90 (122)
Company contribution599 465 371 
Employee contributions and transfer572 444 349 
Benefits paid(96)1,037 74 
Settlement(342)(1,139)(518)
Foreign currency translation(821)1,008 (82)
Fair value of assets10,738 11,426 9,521 
Funded status$(4,147)$(2,421)$(1,128)
The unfunded liability of $4.1 million, $2.4 million and $1.1 million at December 31, 2024, 2023 and 2022, respectively, is recognized in the consolidated balance sheet within other non-current liabilities. Net periodic benefit cost consists of the following:
Year ended December 31,
(in thousands)
202420232022
Service cost$538 $369 $432 
Interest cost243 257 42 
Expected return on plan assets(201)(184)(73)
Amortization of unrecognized gain (loss)(45)(37)(27)
Effect of settlement47 (1)(40)
Net periodic benefit cost$582 $404 $334 
Assumptions used to determine the benefit obligations and components of the net periodic benefit cost at December 31, 2024 and 2023:
December 31,
202420232022
Discount rate1.05 %1.85 %2.25 %
Expected return on plan assets1.05 %1.85 %2.25 %
Rate of compensation increase3.00 %4.00 %4.00 %
The Company considers the historical level of long-term returns and the current level of expected long-term returns for the plan assets, as well as the current and expected allocation of assets when developing its expected long-term rate of return on assets assumption. The assumptions used for the plan are based upon customary rates and practices for the location of the Company.
Arnold expects to contribute approximately $0.6 million to the defined benefit plan in 2025.
The following presents the benefit payments which are expected to be paid for the plan in each year indicated (in thousands):
2025$640 
2026793 
2027850 
2028964 
2029607 
Thereafter4,363 
$8,217 
Asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk and providing adequate liquidity to meet immediate and future benefit payment requirements.
The assets of the plan are reinsured in their entirety with Swiss Life Ltd. (“Swiss Life”) within the framework of the corresponding contracts with Swiss Life Collective BVG Foundation and Swiss Life Complementary Foundation. The assets are guaranteed by the insurance company and pooled with the assets of other participating employers. The allocation of pension plan assets by category in Swiss Life’s group life portfolio is as follows at December 31, 2024:
Fixed income bonds and securities59 %
Real estate25 %
Equities and investment funds15 %
Other investments1 %
100 %
The plan assets are pooled with assets of other participating employers and are not separable; therefore the fair values of the pension plan assets at December 31, 2024 and 2023 were considered Level 3.