Defined contribution and defined benefit retirement plans

12 Months Ended

Dec. 31, 2025

Defined contribution and defined benefit retirement plans

Defined contribution and defined benefit retirement plans

Note 11 – Defined contribution and defined benefit retirement plans:

Defined contribution plans. Certain of our subsidiaries maintain various defined contribution pension plans for our employees worldwide. Defined contribution plan expense approximated $8.2 million in 2023, $7.7 million in 2024 and $8.4 million in 2025.

Defined benefit plans. Kronos sponsors various defined benefit pension plans worldwide. NL previously maintained a defined benefit pension plan in the U.S., in which Kronos and NL both participate. The benefits under our defined benefit plans are based upon years of service and employee compensation. Our funding policy is to contribute annually the minimum amount required under ERISA (or equivalent foreign) regulations plus additional amounts as we deem appropriate. We recognize an asset or liability for the over or under funded status of each of our individual defined benefit pension plans on our Consolidated Balance Sheets. Changes in the funded status of these plans are recognized either in net income, to the extent they are reflected in periodic benefit cost, or through other comprehensive income (loss).

As a result of the LPC acquisition in July 2024 (see Note 3), Kronos acquired the LPC defined benefit pension plan, which had a net pension asset of $10.6 million on the Acquisition Date. Prior to the LPC acquisition, LPC’s defined benefit pension plan had been frozen for all employees with benefits based on years of service and employee compensation. Effective December 31, 2024, the LPC defined benefit pension plan was merged into the NL U.S. defined benefit pension plan.

The U.S. pension plan NL administered has been closed to new participants since 1996 with existing participants no longer accruing any additional benefits after that date. In accordance with applicable U.S. pension regulations, effective June 30, 2025, NL began the process of terminating the pension plan, which includes the purchase of annuity contracts from third-party insurance companies for the purpose of distributing benefits to plan participants. The annuity contracts were purchased on December 16, 2025, from “A” rated third-party insurance companies in settlement of all remaining obligations to the pension plan participants. The annuity purchase was funded with existing plan assets. In connection with the settlement, we recognized a non-cash settlement loss of approximately $28.7 million which is included in other components of net periodic pension and OPEB costs in our Consolidated Statements of Operations. This charge represents the previously unrecognized actuarial losses and prior service costs that were accumulated in other comprehensive loss. As a result of the U.S. plan settlement, we are entitled to surplus U.S. pension assets totaling approximately $9 million. Following the settlement, the surplus U.S. pension assets will be used, as permitted by the applicable regulations, to fund obligations associated with our Chemicals Segment’s U.S. defined contribution profit sharing plan. Such surplus assets are included in pension assets on our Consolidated Balance Sheet.

We previously maintained a defined benefit pension plan in the United Kingdom (U.K.) related to a former disposed U.K. business unit. In accordance with applicable U.K. pension regulations, we entered into an agreement in March 2021 for the bulk annuity purchase, or “buy-in”, with a specialist insurer of defined benefit pension plans. Following the buy-in, individual policies replaced the bulk annuity policy in a “buy-out” which was completed as of May 1, 2023. The buy-out was completed with existing plan funds. At the completion of the buy-out, the assets and liabilities of the U.K. pension plan were removed from our Consolidated Financial Statements and a non-cash pension plan termination loss of $6.2 million was recognized in the second quarter of 2023.

We expect to contribute the equivalent of approximately $17 million to all of our defined benefit pension plans during 2026. Benefit payments to plan participants out of plan assets are expected to be the equivalent of:

Years ending December 31,	Amount
	(In millions)
2026	$	26.2
2027		28.3
2028		32.2
2029		31.7
2030		31.6
Next 5 years		154.4

The funded status of our U.S. defined benefit pension plans, including the acquired LPC plan, is presented in the table below.

	Years ended December 31,
	2024		2025
	(In millions)
Change in projected benefit obligations ("PBO"):
Balance at beginning of the year	$	42.7	$	65.2
Interest cost		2.7		3.4
Actuarial (gains) losses		(3.1)		2.4
Benefits paid		(4.6)		(5.3)
Acquisition		27.5		—
Settlement		—		(65.6)
Balance at end of the year	$	65.2	$	.1
Change in plan assets:
Fair value at beginning of the year	$	40.3	$	75.7
Actual return on plan assets		.4		3.3
Employer contributions		1.5		—
Benefits paid		(4.6)		(5.3)
Acquisition		38.1		—
Settlement		—		(64.7)
Fair value at end of the year	$	75.7	$	9.0
Funded status	$	10.5	$	8.9
Amounts recognized in the Consolidated Balance Sheets:
Noncurrent pension asset	$	10.7	$	9.0
Accrued pension costs:
Current		(.1)		(.1)
Noncurrent		(.1)		—
Total		10.5		8.9
Accumulated other comprehensive loss - actuarial losses		28.5		—
Total	$	39.0	$	8.9
Accumulated benefit obligations ("ABO")	$	65.2	$	.1

The components of our net periodic defined benefit pension cost for U.S. plans are presented in the table below. The amounts shown below for the amortization of recognized actuarial losses for 2023, 2024 and 2025 were recognized as components of our accumulated other comprehensive income (loss) at December 31, 2022, 2023 and 2024, respectively, net of deferred income taxes and noncontrolling interest.

	Years ended December 31,
	2023		2024		2025
	(In millions)
Net periodic pension cost for U.S. plans:
Interest cost	$	2.2	$	2.7	$	3.4
Expected return on plan assets		(1.9)		(3.2)		(3.6)
Recognized net actuarial losses		2.0		1.9		1.4
Settlements		—		—		28.7
Total	$	2.3	$	1.4	$	29.9

Information concerning our U.S. defined benefit pension plans (for which the ABO of all of the plans exceeds the fair value of plan assets as of the indicated date) is presented in the table below.

	December 31,
	2024		2025
	(In millions)
Plans for which the ABO exceeds plan assets:
Projected benefit obligations	$	.1	$	.1
Accumulated benefit obligations		.1		.1

The discount rate assumptions used in determining the actuarial present value of the benefit obligation for our U.S. defined benefit pension plans as of December 31, 2024 was 5.5%. The impact of assumed increases in future compensation levels does not have an effect on the benefit obligation as the plans are frozen with regards to compensation.

The weighted-average rate assumptions used in determining the net periodic pension cost for our U.S. defined benefit pension plans for 2023, 2024 and 2025 are presented in the table below. The impact of assumed increases in future compensation levels does not have an effect on the periodic pension cost as the plans are frozen with regards to compensation.

	Years ended December 31,
	2023	2024	2025
Discount rate	5.3%	5.0%	5.5%
Long-term return on plan assets	5.0%	5.0%	5.0%

Variances from actuarially assumed rates will result in increases or decreases in accumulated pension obligations, pension expense and funding requirements in future periods.

The funded status of our non-U.S. defined benefit pension plans is presented in the table below.

	Years ended December 31,
	2024		2025
	(In millions)
Change in PBO:
Balance at beginning of the year	$	563.7	$	513.3
Service cost		6.6		6.0
Interest cost		18.9		19.9
Participant contributions		1.8		2.0
Actuarial gains		(16.2)		(47.7)
Settlements		(1.9)		(1.4)
Change in currency exchange rates		(36.8)		57.8
Benefits paid		(22.8)		(24.5)
Balance at end of the year	$	513.3	$	525.4
Change in plan assets:
Fair value at beginning of the year	$	422.6	$	404.9
Actual return on plan assets		20.0		13.9
Employer contributions		14.9		15.9
Participant contributions		1.8		2.0
Settlements		(1.9)		(1.4)
Change in currency exchange rates		(29.7)		45.1
Benefits paid		(22.8)		(24.5)
Fair value at end of the year	$	404.9	$	455.9
Funded status	$	(108.4)	$	(69.5)
Amounts recognized in the Consolidated Balance Sheets:
Noncurrent pension asset	$	9.1	$	11.4
Noncurrent accrued pension costs		(117.5)		(80.9)
Total		(108.4)		(69.5)
Accumulated other comprehensive loss:
Actuarial losses		88.8		44.9
Prior service cost		.3		.3
Total	$	89.1	$	45.2
ABO	$	499.7	$	514.1

The total net underfunded status of our non-U.S. defined benefit pension plans decreased from $108.4 million at December 31, 2024 to $69.5 million at December 31, 2025 due to the change in our plan assets during 2025 exceeding the change in our PBO during 2025. The increase in our plan assets in 2025 was primarily attributable to favorable currency fluctuations (primarily from the weakening of the U.S. dollar relative to the euro). The increase in our PBO in 2025 was primarily attributable to favorable currency fluctuations, primarily from the weakening of the U.S. dollar relative to the euro, somewhat offset by higher actuarial gains due primarily to the increase in discount rates for all of our non-U.S. plans from the end of 2024.  

The components of our net periodic pension benefit cost for our non-U.S. plans are presented in the table below. The amounts shown below for the amortization of prior service cost and recognized net actuarial losses for 2023, 2024 and 2025 were recognized as components of our accumulated other comprehensive income (loss) at December 31, 2022, 2023 and 2024, respectively, net of deferred income taxes and noncontrolling interest.

	Years ended December 31,
	2023		2024		2025
	(In millions)
Net periodic pension cost for non-U.S. plans:
Service cost	$	6.3	$	6.6	$	6.0
Interest cost		19.8		18.9		19.9
Expected return on plan assets		(18.3)		(19.9)		(19.2)
Recognized net actuarial losses		1.8		1.9		1.7
Amortization of prior service cost		—		.1		.1
Settlements		6.5		.4		.3
Total	$	16.1	$	8.0	$	8.8

Information concerning certain of our non-U.S. defined benefit pension plans (for which the ABO exceeds the fair value of plan assets as of the indicated date) is presented in the table below.

	December 31,
	2024		2025
	(In millions)
Plans for which the ABO exceeds plan assets:
Projected benefit obligations	$	397.1	$	429.4
Accumulated benefit obligations		387.1		421.5
Fair value of plan assets		279.5		348.2

The key actuarial assumptions used to determine our non-U.S. benefit obligations as of December 31, 2024 and 2025 are as follows:

	December 31,
	2024	2025
Discount rate	3.6%	4.3%
Increase in future compensation levels	2.8%	2.8%

A summary of our key actuarial assumptions used to determine non-U.S. net periodic benefit cost for 2023, 2024 and 2025 are as follows:

	Years ended December 31,
	2023	2024	2025
Discount rate	3.9%	3.4%	3.6%
Increase in future compensation levels	2.7%	2.7%	2.8%
Long-term return on plan assets	4.6%	4.9%	4.5%

Variances from actuarially assumed rates will result in increases or decreases in accumulated pension obligations, pension expense and funding requirements in future periods.

The amounts shown for all of our periodic defined benefit plans for actuarial losses and prior service cost at December 31, 2024 and 2025 have not been recognized as components of our periodic defined benefit pension cost as of those dates. These amounts will be recognized as components of our periodic defined benefit cost in future years. These amounts, net of deferred income taxes and noncontrolling interest, are recognized in our accumulated other comprehensive income (loss) at December 31, 2024 and 2025. We expect approximately $1.7 million and $.1 million of the unrecognized actuarial losses and prior service cost, respectively, will be recognized as components of our periodic defined benefit pension cost in 2026. The table below details the changes in other comprehensive income (loss) during 2023, 2024 and 2025.

		Years ended December 31,
		2023		2024		2025
	(In millions)
Changes in plan assets and benefit obligations recognized in   other comprehensive income (loss):
Net actuarial gains (losses)		$	(25.5)	$	16.0	$	39.0
Amortization of unrecognized:
Net actuarial losses			3.8		3.7		3.1
Prior service cost			—		.1		.1
Settlement loss			6.5		.4		29.0
Total		$	(15.2)	$	20.2	$	71.2

In determining the expected long-term rate of return on plan asset assumptions, we consider the long-term asset mix (e.g., equity vs. fixed income) for the assets for each of our plans and the expected long-term rates of return for such asset components. In addition, we receive third-party advice about appropriate long-term rates of return. Such assumed asset mixes are summarized below:

● In Germany, the composition of our plan assets is established to satisfy the requirements of the German insurance commissioner. Our German pension plan assets represent an investment in a large collective investment fund established by Bayer AG and maintained by a mutual insurance association in which several pension plans, including our German pension plans and Bayer’s pension plans, have invested. Our plan assets represent a very nominal portion of the total collective investment fund. These plan assets are a Level 3 in the fair value hierarchy because there is not an active market that approximates the value of our investment. We estimate the fair value of the Bayer plan assets based on periodic reports we receive from the managers of the mutual insurance association and using a model we developed with assistance from our third-party actuary that uses estimated asset allocations and correlates such allocation to similar asset mixes in fund indexes quoted on an active market. We periodically evaluate the results of our valuation model against actual returns from the investment fund and adjust the model as needed. The mutual insurance association periodic reports are subject to audit by the German pension regulator.

● In Canada, we currently have a plan asset target allocation of up to 10% to equity securities and 90 –100% to fixed income securities. We expect the long-term rate of return for such investments to approximate the applicable equity or fixed income index. The Canadian assets are Level 1 inputs because they are traded in active markets.

● In Norway, we currently have a plan asset target allocation of 18% to equity securities, 63% to fixed income securities, 14% to real estate and the remainder primarily to other investments and liquid investments such as money markets. The expected long-term rate of return for such investments is approximately 8%, 5%, 7% and 4%, respectively. The majority of Norwegian plan assets are Level 1 inputs because they are traded in active markets; however, approximately 14% of our Norwegian plan assets are invested in real estate and other investments not actively traded and are therefore a Level 3 input.

● In the U.S., during 2025, we converted all of our U.S. plan assets to cash in anticipation of the U.S. plan termination, except for approximately 10% of our U.S. plan assets that remain, as of December 31, 2025, invested in funds that are valued at net asset value (“NAV”) and, in accordance with ASC 820-10, not subject to classification in the fair value hierarchy.

● We also have plan assets in Belgium. The Belgian plan assets are invested in certain individualized fixed income insurance contracts for the benefit of each plan participant as required by the local regulators and are therefore a Level 3 input.

We regularly review our actual asset allocation for each plan, and will periodically rebalance the investments in each plan to more accurately reflect the targeted allocation and/or maximize the overall long-term return when considered appropriate.

The composition of our pension plan assets by asset category and fair value level at December 31, 2024 and 2025 is shown in the tables below.

	Fair Value Measurements at December 31, 2024
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable		Assets
			Markets		Inputs		Inputs		measured
	Total		(Level 1)		(Level 2)		(Level 3)		at NAV
	(In millions)
Germany	$	264.6	$	—	$	—	$	264.6	$	—
Canada:
Local currency equities		2.8		2.8		—		—		—
Local currency fixed income		78.1		78.1		—		—		—
Cash and other		.5		.5		—		—		—
Norway:
Local currency equities		2.0		2.0		—		—		—
Non local currency equities		6.9		6.9		—		—		—
Local currency fixed income		21.1		3.7		17.4		—		—
Non local currency fixed income		4.2		4.2		—		—		—
Real estate		6.2		—		—		6.2		—
Cash and other		3.6		3.4		—		.2		—
U.S.:
Equities		6.7		—		—		.1		6.6
Fixed income		30.8		—		—		—		30.8
Cash and other		38.2		37.0		—		—		1.2
Other		14.9		—		—		14.9		—
Total	$	480.6	$	138.6	$	17.4	$	286.0	$	38.6

	Fair Value Measurements at December 31, 2025
			Quoted		Significant
			Prices in		Other		Significant
			Active		Observable		Unobservable		Assets
			Markets		Inputs		Inputs		measured
	Total		(Level 1)		(Level 2)		(Level 3)		at NAV
	(In millions)
Germany	$	304.9	$	—	$	—	$	304.9	$	—
Canada:
Local currency equities		2.5		2.5		—		—		—
Local currency fixed income		79.1		79.1		—		—		—
Cash and other		.1		.1		—		—		—
Norway:
Local currency equities		2.3		2.3		—		—		—
Non local currency equities		7.5		7.5		—		—		—
Local currency fixed income		25.7		4.7		21.0		—		—
Non local currency fixed income		4.8		4.8		—		—		—
Real estate		7.4		—		—		7.4		—
Cash and other		4.5		4.4		—		.1		—
U.S.:
Cash and other		9.0		8.0		—		—		1.0
Other		17.1		—		—		17.1		—
Total	$	464.9	$	113.4	$	21.0	$	329.5	$	1.0

A rollforward of the change in fair value of Level 3 assets follows.

	Years ended December 31,
	2024		2025
	(In millions)
Fair value at beginning of year	$	292.1	$	286.0
Gain on assets held at end of year		12.8		13.8
Gain (loss) on assets sold during the year		(.7)		(6.7)
Assets purchased		1.5		1.6
Assets sold		(2.3)		(2.0)
Currency exchange rate fluctuations		(17.4)		36.8
Fair value at end of year	$	286.0	$	329.5