Employees

12 Months Ended

Dec. 31, 2023

Workforce

As of December 31, 2023, operations, maintenance and warehouse hourly employees along with truck drivers at the Tyler refinery were represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local 202. Of the Tyler refinery employees, 57.5% of operations, maintenance and warehouse hourly employees are currently covered by a collective bargaining agreement that expires January 31, 2028 while 11.7% of Tyler employees that are truck drivers are currently covered by a collective bargaining agreement that expires November 3, 2024. As of December 31, 2023, operations, maintenance and warehouse hourly employees at the El Dorado refinery were represented by the International Union of Operating Engineers and its Local 351. Of the El Dorado refinery employees, 52.4% are covered by a collective bargaining agreement which expires on August 1, 2027. As of December 31, 2023, 67.7% of employees who work at our Big Spring refinery were covered by a collective bargaining agreement that expires March 31, 2027. None of our employees in our logistics segment, retail segment or in our corporate office are represented by a union. We consider our relations with our employees to be satisfactory.

Postretirement Benefits

Pension Plans

We have two defined benefit pension plans for certain Alon employees. The benefits are based on years of service and the employee’s final average monthly compensation. Our funding policy is to contribute annually no less than the minimum required nor more than the maximum amount that can be deducted for federal income tax purposes. Contributions are intended to provide not only for benefits attributed to service to date but also for those benefits expected to be earned in the future. Both plans are closed to new participants. The pre-tax amounts related to the defined benefit plans recognized as pension benefit liability in the consolidated balance sheets as of December 31, 2023 was $2.5 million.

Financial information related to our pension plans is presented below (in millions):


	Year Ended December 31,
	2023		2022
Change in projected benefit obligation:
Benefit obligation at beginning of year	$	105.3	$	140.8

Interest cost	5.3		3.7
Actuarial loss (gain)	2.0		(33.5)
Benefits paid	(5.9)		(5.7)

Projected benefit obligations at end of year	$	106.7	$	105.3
Change in plan assets:
Fair value of plan assets at beginning of year	$	102.2	$	137.9
Actual gain (loss) on plan assets	7.9		(30.0)

Benefits paid	(5.9)		(5.7)

Fair value of plan assets at end of year	$	104.2	$	102.2
Reconciliation of funded status:
Fair value of plan assets at end of year	$	104.2	$	102.2
Less projected benefit obligations at end of year	106.7		105.3
Under-funded status at end of year	$	(2.5)	$	(3.1)

The pre-tax amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost were as follows (in millions):


	Year Ended December 31,
	2023		2022
Net actuarial loss	$	6.0	$	6.5

Projected benefit obligations at end of year	$	6.0	$	6.5

The accumulated benefit obligation for each of our pension plans was in excess of the fair value of plan assets. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans were as follows (in millions):


	Year Ended December 31,
	2023		2022
Projected benefit obligation	$	106.7	$	105.3
Accumulated benefit obligation	$	106.7	$	105.3
Fair value of plan assets	$	104.2	$	102.2

The weighted-average assumptions used to determine benefit obligations were as follows:


	Year Ended December 31,
	2023		2022
Discount rate	4.90	%	5.10	%

The discount rate used reflects the expected future cash flow based on our funding valuation assumptions and participant data as of the beginning of the plan period. The expected future cash flow is discounted by the Principal Pension Discount Yield Curve for the fiscal year end because it has been specifically designed to help pension funds comply with statutory funding guidelines. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories.

The weighted-average assumptions used to determine net periodic benefit costs were as follows:


	Year Ended December 31,
	2023		2022		2021
Discount rate	5.10	%	2.75	%	2.45	%
Expected long-term rate of return on plan assets	5.55	%	4.05	%	4.65	%

The components of net periodic benefit cost related to our benefit plans consisted of the following (in millions):


	Year Ended December 31,
Components of net periodic benefit:	2023		2022		2021

Interest cost	5.3		3.7		3.5
Expected return on plan assets	(5.4)		(5.2)		(6.0)
Amortization of net gain	(0.1)		—		—

Net periodic benefit	$	(0.2)	$	(1.5)	$	(2.5)

The service cost component of net periodic benefit is included as part of general and administrative expenses in the accompanying statements of income. The other components of net periodic benefit are included as part of other non-operating expense (income), net.

The weighted-average asset allocation of our pension benefits plan assets were as follows:


	Year Ended December 31,
	2023		2022
Investments in common collective trust consisting of:
U.S. and International companies	10.0	%	20.2	%
Fixed-income	90.0	%	79.8	%

Total	100.0	%	100.0	%

The fair value of our pension assets by category were as follows (in millions):


	Quoted Prices in Active Markets For Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Consolidated Total
Year Ended December 31, 2023

U.S. companies	$	—	$	7.3	$	—	$	7.3
International companies	—		3.1		—		3.1


Fixed-income	—		93.8		—		93.8

Total	$	—	$	104.2	$	—	$	104.2
Year Ended December 31, 2022

U.S. companies	$	—	$	14.3	$	—	$	14.3
International companies	—		6.3		—		6.3


Fixed-income	—		81.6		—		81.6

Total	$	—	$	102.2	$	—	$	102.2

The investment policies and strategies for the assets of our pension benefits is to, over a five-year period, provide returns in excess of the benchmark. The portfolio in our common collective trust is expected to earn long-term returns from capital appreciation and a stable stream of current income. This approach recognizes that assets are exposed to price risk and the market value of the plans’ assets may fluctuate from year to year. Risk tolerance is determined based on our specific risk management policies. In line with the investment return objective and risk parameters, the plans’ mix of assets includes a diversified portfolio of underlying securities in companies and fixed-income. The underlying securities include domestic and international companies of various sizes of capitalization. The asset allocation of the plan is reviewed on at least an annual basis.

We made no contributions to the pension plans for the year ended December 31, 2023, and expect no contributions to be made to the pension plans in 2024. There were no employee contributions to the plans. The benefits expected to be paid in each year 2024–2028 are $7.1 million, $7.0 million, $6.9 million, $7.1 million and $7.1 million, respectively. The aggregate benefits expected to be paid in the five years from 2029–2033 are $36.3 million. The expected benefits are based on the same assumptions used to measure our benefit obligation at December 31, 2023 and include estimated future employee service.

401(k) Plans

For the years ended December 31, 2023, 2022 and 2021, we sponsored a voluntary 401(k) Employee Retirement Savings Plans for eligible employees. Employees must be at least 21 years of age and eligibility to participate in the plan is immediate upon employment. Employee contributions are matched on a fully-vested basis by us up to a maximum of 6% of eligible compensation. Eligibility for the Company matching contribution begins immediately upon employment with vesting after one year of service. For the years ended December 31, 2023, 2022 and 2021, the 401(k) plans expense recognized was $14.8 million, $10.9 million and $4.8 million, respectively.

Postretirement Medical Plan

In addition to providing pension benefits, Alon has an unfunded postretirement medical plan covering certain health care and life insurance benefits for certain employees of Alon that retired prior to January 2, 2017, who met eligibility requirements in the plan documents. This plan is closed to new participants. The health care benefits in excess of certain limits are insured. The accrued benefit liability related to this plan reflected in the consolidated balance sheet was $0.6 million and $0.8 million at December 31, 2023 and 2022, respectively.