Pension Plan

9 Months Ended

Sep. 30, 2017

11. PENSION PLAN

The Company maintains a pension plan covering all employees in Switzerland. The plan is considered a defined benefit plan and accounted for in accordance with ASC 715 Compensation - Retirement Benefits. This model allocates pension costs over the service period of employees in the plan. The underlying principle is that employees render services ratably over this period, and therefore, the income statement effects of pensions should follow a similar pattern. ASC 715 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, with a corresponding adjustment recorded in the 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 statement of comprehensive 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 fair values of plan assets are determined based on prevailing market prices.

Actuarial valuation

Net periodic pension cost has been included in the Company,s results as follows:

Pension expense	Three months ended September 30, 2017			Nine months ended September 30, 2017			Three months ended September 30, 2016			Nine months ended September 30, 2016
		$			$			$			$
Current service cost		14,055			42,166			15,357			46,070
Net actuarial (gain) loss recognized		—			—			—			—
Interest cost		577			1,732			945			2,836
Expected return on assets		(1,431	)		(4,292	)		(1,916	)		(5,749	)
Employee contributions		(5,020	)		(15,059	)		(5,877	)		(17,631	)
Net periodic pension cost		8,182			24,546			8,509			25,526

During the three month, periods ended September 30, 2017 and September 30, 2016, the Company made cash contributions of $5,020 and $15,534, respectively, to its defined benefit pension plan.

All of the assets are held under a collective contract by the plan’s re-insurance company and are invested in a mix of Swiss and international fixed-income and equity securities within the limits set out by the Swiss pension law.

The remaining expected future cash flows to be paid by the Company in respect to employer contributions to the pension plan for the year ended December 31, 2017, are $10,039.

SUNVESTA, INC. 10-Q