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Employee and Retiree Benefit Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Employee and Retiree Benefit Plans
Note K – Employee and Retiree Benefit Plans
PENSION AND OTHER POSTRETIREMENT PLANS – The Company has defined benefit pension plans that are principally noncontributory and cover most full-time employees. All pension plans are funded except for the U.S. and Canadian nonqualified supplemental plans and the U.S. directors’ plan. All U.S. tax qualified plans meet the funding requirements of federal laws and regulations. Contributions to foreign plans are based on local laws and
tax regulations. The Company also sponsors other postretirement benefits such as health care and life insurance benefit plans, which are not funded, that cover most retired U.S. employees. The health care benefits are contributory; the life insurance benefits are noncontributory.
Upon the disposal of Murphy’s former U.K. downstream assets, the Company retained all vested defined benefit pension obligations associated with former employees of this business. No additional benefits will accrue to these former U.K. employees under the Company’s retirement plan after the date of their separation from Murphy.
GAAP requires the Company to recognize the overfunded or underfunded status of its defined benefit plans as an asset or liability in its consolidated balance sheet and to recognize changes in that funded status between periods through “Accumulated other comprehensive loss.”
In 2020, the Company announced that it was closing its headquarters office in El Dorado, Arkansas, its office in Calgary, Alberta, and consolidating all worldwide staff activities to its existing office location in Houston, Texas. As a result of this decision and the subsequent restructuring activities, a pension remeasurement was triggered and the Company incurred pension curtailment and special termination benefit charges as a result of the associated reduction in force in 2020.
The tables that follow provide a reconciliation of the changes in the plans’ benefit obligations and fair value of assets for the years ended December 31, 2022 and 2021 and a statement of the funded status as of December 31, 2022 and 2021.
Pension
Benefits		Other
Postretirement
Benefits
(Thousands of dollars)
2022202120222021
Change in benefit obligation
Obligation at January 1$939,380 $981,467 $96,133 $108,378 
Service cost7,875 8,199 968 1,295 
Interest cost22,747 14,784 2,211 2,071 
Participant contributions— — 2,283 2,648 
Actuarial loss (gain)(238,407)(24,440)(29,533)(9,519)
Medicare Part D subsidy— — 331 300 
Exchange rate changes(21,018)(1,764)(20)3 
Benefits paid(47,504)(38,866)(4,694)(4,041)
Plan amendments— — — (5,002)
Obligation at December 31663,073 939,380 67,679 96,133 
Change in plan assets
Fair value of plan assets at January 1611,302 586,720 — — 
Actual return on plan assets(133,395)33,687 — — 
Employer contributions41,145 31,607 2,080 1,093 
Participant contributions— — 2,283 2,648 
Medicare Part D subsidy— — 331 300 
Exchange rate changes(20,604)(1,846)— — 
Benefits paid(47,504)(38,866)(4,694)(4,041)
Fair value of plan assets at December 31450,944 611,302 — — 
Funded status and amounts recognized in the Consolidated Balance Sheets at December 31
Deferred charges and other assets3,584 5,535 — — 
Other accrued liabilities(9,693)(10,144)(4,830)(4,867)
Deferred credits and other liabilities(206,020)(323,469)(62,849)(91,266)
Fund Status and net plan liability recognized at December 31$(212,129)$(328,078)$(67,679)$(96,133)
At December 31, 2022, amounts included in “Accumulated other comprehensive loss” (AOCL) in the Consolidated Balance Sheets, before reduction for associated deferred income taxes, which have not been recognized in net periodic benefit expense are shown in the following table.
(Thousands of dollars)
Pension
Benefits		Other
Postretirement
Benefits
Net actuarial gain (loss)$(194,735)$42,129 
Prior service (credit) cost(2,181)4,470 
$(196,916)$46,599 
The table that follows includes projected benefit obligations, accumulated benefit obligations and fair value of plan assets for plans where the accumulated benefit obligation exceeded the fair value of plan assets.
Projected
Benefit Obligations		Accumulated
Benefit Obligations		Fair Value
of Plan Assets
(Thousands of dollars)
202220212022202120222021
Funded qualified plans where accumulated benefit obligation exceeds fair value of plan assets$511,375 $734,375 $499,338 $723,887 $434,283 $589,529 
Unfunded nonqualified and directors’ plans where accumulated benefit obligation exceeds fair value of plan assets141,917 188,713 139,634 188,530 — — 
Unfunded other postretirement plans67,679 96,133 67,679 96,133 — — 
The table that follows provides the components of net periodic benefit expense for each of the three years ended December 31, 2022.
Pension BenefitsOther
Postretirement Benefits
(Thousands of dollars)
202220212020202220212020
Service cost$7,875 $8,199 $7,967 $968 $1,295 $1,373 
Interest cost22,747 14,784 21,127 2,211 2,071 2,626 
Expected return on plan assets(36,458)(19,222)(24,316)— — — 
Amortization of prior service cost (credit)(684)591 640 (532)— — 
Amortization of transitional (asset) liability231 — — (587)— — 
Recognized actuarial (gain) loss15,867 20,565 22,828 (28)(29)(31)
Net periodic benefit expense9,578 24,917 28,246 2,032 3,337 3,968 
Termination benefits expense— — 8,434 — — — 
Curtailment expense— — 586 — — (1,825)
Total net periodic benefit expense$9,578 $24,917 $37,266 $2,032 $3,337 $2,143 
The preceding tables in this note include the following amounts related to foreign benefit plans.
Pension
Benefits		Other
Postretirement
Benefits
(Thousands of dollars)
2022202120222021
Benefit obligation at December 31$122,915 $225,117 $107 $526 
Fair value of plan assets at December 31115,862 218,746 — — 
Net plan liabilities recognized(7,053)(6,371)(107)(526)
Net periodic benefit expense (benefit)(5,322)598 62 64 
The following table provides the weighted-average assumptions used in the measurement of the Company’s benefit obligations at December 31, 2022 and 2021 and net periodic benefit expense for 2022 and 2021.
Benefit ObligationsNet Periodic Benefit Expense
Pension
Benefits		Other
Postretirement
Benefits		Pension
Benefits		Other
Postretirement
Benefits
December 31,December 31,YearYear
20222021202220212022202120222021
Discount rate5.30 %2.54 %5.41 %2.86 %3.13 %2.24 %2.86 %2.51 %
Rate of compensation increase3.50 %3.04 %— — 3.00 %3.04 %— — 
Cash balance interest credit rate3.20 %1.89 %— — — — — — 
Expected return on plan assets— — — — 6.24 %4.25 %— — 
The discount rates used for determining the plan obligations and expense are based on high-quality corporate bonds that are available within each country. Cash flow analyses are performed in which a spot yield curve is used to discount projected benefit payment streams for the most significant plans. The discounted cash flows are used to determine an equivalent single rate which is the basis for selecting the discount rate within each country. Expected plan asset returns are based on long-term expectations for asset portfolios with similar investment mix characteristics. Expected compensation increases are based on anticipated future averages for the Company. The plan’s cash balance interest accumulation rate is the greater of the annual yield on 10-year treasury constant maturities or 1.89%.
Benefit payments, reflecting expected future service as appropriate, which are expected to be paid in future years from the assets of the plans or by the Company, are shown in the following table.
(Thousands of dollars)
Pension
Benefits		Other
Postretirement
Benefits
2023$45,104 $4,830 
202446,418 4,858 
202546,240 4,808 
202647,003 4,820 
202747,293 4,778 
2028-2032244,253 23,648 
For purposes of measuring postretirement benefit obligations at December 31, 2022, the future annual rates of increase in the cost of health care were assumed to be 6.3% for 2023 decreasing each year to an ultimate rate of 4.0% in 2045 and thereafter.
During 2022, the Company made contributions of $34.0 million to its domestic defined benefit pension plans and $2.1 million to its domestic postretirement benefits plan. During 2023, the Company currently expects to make contributions of $31.1 million to its domestic defined benefit pension plans, $1.1 million to its foreign defined benefit pension plans and $4.8 million to its domestic postretirement benefits plan.
PLAN INVESTMENTS – Murphy Oil Corporation maintains an Investment Policy Statement (Statement) that establishes investment standards related to its funded domestic qualified retirement plan. Our investment strategy is to maximize long-term returns at an acceptable level of risk through broad diversification of plan assets in a variety of asset classes. Asset classes and target allocations are determined by our investment committee and include equities, fixed income and other investments, including hedge funds, real estate and cash equivalent securities. Investment managers are prohibited from investing in equity or fixed income securities issues by the Company. The majority of plan assets are highly liquid, providing flexibility for benefit payment requirements. The current target allocations for plan assets are 40-75% equity securities, 20-60% fixed income securities, 0-15% alternatives and 0-20% cash and equivalents. Asset allocations are rebalanced on a periodic basis throughout the year to bring assets to within an acceptable range of target levels.
The weighted average asset allocation for the Company’s funded pension benefit plans at December 31, 2022 and 2021 are presented in the following table.
December 31,
20222021
Equity securities65.7 %60.9 %
Fixed income securities23.4 %21.7 %
Alternatives7.3 %13.5 %
Cash equivalents3.6 %3.9 %
100.0 %100.0 %
The Company’s weighted average expected return on plan assets was 6.2% in 2022 and the return was determined based on an assessment of actual long-term historical returns and expected future returns for a portfolio with investment characteristics similar to that maintained by the plans. The 6.2% expected return was comprised of the weighted average expected future equity securities return of 7.9% and a fixed income securities return of 4.6%. There is also an average expected investment expense of 0.6%. Over the last 10 years, the return on funded retirement plan assets has averaged 3.4%.
At December 31, 2022, the fair value measurements of retirement plan assets within the fair value hierarchy are included in the table that follows.
Fair Value Measurements Using
(Thousands of dollars)
Fair Value at December 31,
2022		Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Domestic Plans
Equity securities:
U.S. core equity$96,433 $96,433 $— $— 
U.S. small/midcap64,421 64,421 — — 
Other alternative strategies12,106 — — 12,106 
International equity44,672 44,672 — — 
Emerging market equity13,541 13,541 — — 
Fixed income securities:
U.S. fixed income85,190 35,661 49,528 — 
International commingled trust fund— — — — 
Emerging market mutual fund— — — — 
Cash and equivalents18,719 18,719 — — 
Total Domestic Plans335,082 273,447 49,528 12,106 
Foreign Plans
Equity securities funds23,877 — 23,877 — 
Fixed income securities funds30,727 — 30,727 — 
Diversified pooled fund31,246 — 31,246 — 
Other20,628 — — 20,628 
Cash and equivalents9,384 — 9,384 — 
Total Foreign Plans115,862 — 95,234 20,628 
Total$450,944 $273,447 $144,763 $32,734 
At December 31, 2021, the fair value measurements of retirement plan assets within the fair value hierarchy are included in the table that follows.
Fair Value Measurements Using
(Thousands of dollars)
Fair Value at December 31,
2021		Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Domestic Plans
Equity securities:
U.S. core equity$108,422 $108,422 $— $— 
U.S. small/midcap73,222 73,222 — — 
Other alternative strategies47,248 — — 47,248 
International equity47,546 47,546 — — 
Emerging market equity14,937 14,937 — — 
Fixed income securities:
U.S. fixed income92,231 36,888 55,343 — 
Cash and equivalents8,951 8,951 — — 
Total Domestic Plans392,557 289,966 55,343 47,248 
Foreign Plans
Equity securities funds73,642 — 73,642 — 
Fixed income securities funds40,610 — 40,610 — 
Diversified pooled fund54,317 — 54,317 — 
Other35,606 — — 35,606 
Cash and equivalents14,570 — 14,570 — 
Total Foreign Plans218,745 — 183,139 35,606 
Total$611,302 $289,966 $238,482 $82,854 
The definition of levels within the fair value hierarchy in the tables above is included in Note P.
For domestic plans, U.S. core, small/midcap, international, emerging market equity securities and U.S. treasury securities are quoted prices in active markets. For commercial paper securities, the prices received generally utilize observable inputs in the pricing methodologies. Other alternative strategies funds consist of two investments. One of these investments is valued annually based on net asset value and permits withdrawals annually after a 90-day notice and the other investment is also valued quarterly based on net asset values and has a three-year lock-up period and a 95-day notice following the lock-up period. 
For foreign plans, the equity securities funds are comprised of U.K. and foreign equity funds valued daily based on fund net asset values. Fixed income securities funds are U.K. and Canadian securities valued daily at net asset values. The diversified pooled fund is valued daily at net asset value and contains a combination of U.K. and foreign equity securities.
The effects of fair value measurements using significant unobservable inputs on changes in Level 3 plan assets are outlined below:
(Thousands of dollars)
Hedged Funds and Other
Alternative Strategies
Total at December 31, 2020$97,685 
Actual return on plan assets:
Relating to assets held at the reporting date5,206 
Purchases, sales and settlements(20,037)
Total at December 31, 202182,854 
Actual return on plan assets:
Relating to assets held at the reporting date(38,389)
Purchases, sales and settlements(11,731)
Total at December 31, 2022$32,734 
THRIFT PLANS – Most full-time U.S. employees of the Company may participate in thrift or similar savings plans by allotting up to a specified percentage of their base pay. The Company matches contributions at a stated percentage of each employee’s allotment based on years of participation in the plans, with a maximum match of 6.0%. Amounts charged to expense for the Company’s match to these plans were $6.0 million in 2022, $5.4 million in 2021 and $6.6 million in 2020.