XML 45 R21.htm IDEA: XBRL DOCUMENT v3.22.4
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
NOTE 11 - RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

Occidental has various defined contribution and defined benefit plans for its salaried, domestic union and nonunion hourly and certain foreign national employees. In addition, Occidental also provides medical and other benefits for certain active, retired and disabled employees and their eligible dependents.
In 2021, Occidental settled a significant portion of retiree liability through an annuity purchase. This annuity purchase applied to participants in certain defined benefit plans. The impact of this settlement transaction was approximately $109 million and is reflected in the December 31, 2021 projected benefit obligation.

DEFINED CONTRIBUTION PLANS
All domestic employees and certain foreign national employees are eligible to participate in one or more of the defined contribution retirement or savings plans that provide for periodic contributions by Occidental based on plan-specific criteria, such as base pay, level and employee contributions. Certain salaried employees participate in a supplemental retirement plan that restores benefits lost due to governmental limitations on qualified retirement benefits. The accrued liabilities for the supplemental retirement plan were $288 million and $249 million as of December 31, 2022 and 2021, respectively. Occidental expensed $202 million in 2022, $166 million in 2021 and $192 million in 2020 under the provisions of these defined contribution and supplemental retirement plans.

DEFINED BENEFIT PLANS
Participation in defined benefit plans is limited. Approximately 400 domestic and 300 foreign national employees, mainly union, nonunion hourly and certain employees that joined Occidental from acquired operations with grandfathered benefits, are currently accruing benefits under these plans.
Pension costs for Occidental’s defined benefit pension plans, determined by independent actuarial valuations, are generally funded by payments to trust funds, which are administered by independent trustees.

POSTRETIREMENT AND OTHER BENEFIT PLANS
Occidental provides medical and dental benefits and life insurance coverage for certain active, retired and disabled employees and their eligible dependents. Occidental generally funds the benefits as they are paid during the year. These benefit costs, including the postretirement costs for the years ended December 31, were $211 million in 2022, $211 million in 2021 and $235 million in 2020.
OBLIGATIONS AND FUNDED STATUS
The following tables show the amounts recognized in Occidental’s Consolidated Balance Sheets related to its pension and postretirement benefit plans as of December 31:

Pension BenefitsPostretirement Benefits
millions2022202120222021
Amounts recognized in the Consolidated Balance Sheet:
Long-term receivables and other assets, net$102 $192 $— $— 
Accrued liabilities(3)(4)(62)(71)
Deferred credits and other liabilities — pension and postretirement obligations(344)(391)(711)(1,149)
 $(245)$(203)$(773)$(1,220)
Accumulated other comprehensive loss included the following after-tax balances:
Net (gain) loss$17 $(17)$(190)$163 
Prior service credit— — (52)(50)
 $17 $(17)$(242)$113 

The following tables show the funding status, obligations and plan asset fair values of Occidental related to its pension and postretirement benefit plans for the years ended December 31:

Pension BenefitsPostretirement Benefits
millions2022202120222021
Changes in the benefit obligation:
Benefit obligation — beginning of year$1,273 $1,613 $1,220 $1,259 
Service cost — benefits earned during the period7 8 38 42 
Interest cost on projected benefit obligation36 35 33 33 
Actuarial gain(297)(55)(468)(54)
Benefits paid(123)(219)(58)(67)
Settlement due to annuity purchase— (109)— — 
Other(10)— 8 7 
Benefit obligation — end of year$886 $1,273 $773 $1,220 
Changes in plan assets:
Fair value of plan assets — beginning of year$1,070 $1,193 $— $— 
Actual return on plan assets(304)44 — — 
Employer contributions16 162 49 59 
Benefits paid(123)(219)(57)(67)
Payments due to annuity purchase— (109)— — 
Other(18)(1)8 8 
Fair value of plan assets — end of year$641 $1,070 $— $— 
Unfunded status:$(245)$(203)$(773)$(1,220)
Changes in actuarial gains and losses in the projected benefit obligation are primarily driven by discount rate movement.
The following table sets forth details of the obligations and assets of Occidental’s defined benefit pension plans for the years ended December 31:

Accumulated Benefit
Obligation in Excess of
Plan Assets		Plan Assets in
Excess of Accumulated
Benefit Obligation
millions2022202120222021
Projected benefit obligation$738 $963 $148 $310 
Accumulated benefit obligation$736 $960 $146 $308 
Fair value of plan assets$458 $656 $183 $414 

COMPONENTS OF NET PERIODIC BENEFIT COST
The following table sets forth the components of net periodic benefit costs for the years ended December 31:

Pension BenefitsPostretirement Benefits
millions202220212020202220212020
Net periodic benefit costs:     
Service cost — benefits earned during the period$7 $8 $37 $38 $42 $39 
Interest cost on projected benefit obligation36 35 52 33 33 37 
Expected return on plan assets(38)(59)(73)— — — 
Recognized actuarial loss1 2 5 5 15 11 
Recognized prior service credit— — — (9)(9)(8)
(Gain) loss due to curtailment— — (124)— — 2 
Gain due to settlement(1)(19)(19)— — — 
Special termination benefits— — 22 — — — 
Other costs and adjustments— — 1 — — — 
Net periodic benefit cost$5 $(33)$(99)$67 $81 $81 

The service cost component of net periodic benefit cost is included in selling, general and administrative, oil and gas operating expense, chemical and midstream costs and exploration expense on Occidental’s Consolidated Statements of Operations. All other components of net periodic benefit cost are included in other operating and non-operating expense.

ADDITIONAL INFORMATION
The following table sets forth the weighted-average assumptions used to determine Occidental’s benefit obligation and net periodic benefit cost for domestic plans for the years ended December 31:

 Pension BenefitsPostretirement Benefits
2022202120222021
Benefit Obligation Assumptions:    
Discount rate5.27 %2.67 %5.43 %2.94 %
Rate of increase in compensation levels3.95 %3.98 %— — 
Net Periodic Benefit Cost Assumptions:
Discount rate2.65 %2.19 %2.94 %3.05 %
Rate of increase in compensation levels3.98 %5.07 %— — 
Assumed long-term rate of return on assets4.36 %4.92 %— — 

For domestic pension plans and postretirement benefit plans, Occidental based the discount rate on a AA-AAA Universe yield curve in 2022 and 2021. The assumed long-term rate of return on assets is estimated with regard to current market factors but within the context of historical returns for the asset mix that exists at year end. Assumed rates of compensation increases for active participants in certain plans and vary by age group.
In 2021, Occidental adopted the Society of Actuaries Pri-2012 Private Retirement Plans Mortality Tables with MP-2021 Mortality Improvement Scale, which updated the mortality assumptions that private defined-benefit plans in the United States use in the actuarial valuations that determine a plan sponsor’s pension obligations. The new mortality assumption reflects additional data that the Social Security Administration has released since the previous mortality tables and improvement scales were released.
The postretirement benefit obligation was determined by application of the terms of medical and dental benefits and life insurance coverage, including the effect of established maximums on covered costs, together with relevant actuarial assumptions and health care cost trend rates. Health care cost trend rates for medicare advantaged prescription drug plans of 9.2% starting in 2022, then grading down to 4.5% in 2028 and beyond. Health care cost trend rates used for non-medicare advantaged prescription drug plans are 6.0% to 6.5% in 2022, then grading down to 4.5% in 2028 and beyond.
The actuarial assumptions used could change in the near-term as a result of changes in expected future trends and other factors that, depending on the nature of the changes, could cause increases or decreases in the plan assets and liabilities.

FAIR VALUE OF PENSION PLAN ASSETS
Qualified defined benefit plan assets are monitored by Occidental’s Pension and Retirement Trust and Investment Committee in its role as a fiduciary. The Investment Committee selects and employs various external professional investment management firms to manage specific investments across the spectrum of asset classes. The Investment Committee employs a liability driven investment approach that uses a diversified blend of investments (equity securities, fixed-income securities, and alternative investments) along a glide path to optimize the long-term return of plan assets relative to plan liabilities, at a prudent level of risk. Equity investments are diversified across U.S. and non-U.S. stocks, as well as differing styles and market capitalizations. Investment performance is measured and monitored on an ongoing basis through quarterly investment portfolio and manager guideline compliance reviews, annual liability measurements and periodic studies.
The fair values of Occidental’s pension plan assets by asset category were as follows:

millionsLevel 1Level 2Level 3Total
December 31, 2022
Asset Class:    
Cash and cash equivalents$8 $— $— $8 
Government securities29 — — 29 
Corporate bonds (a)
— 16 — 16 
Equity securities (b)
34 — — 34 
Other— 46 — 46 
Investments measured at fair value$71 $62 $— $133 
Investments measured at net asset value (c)
— — — 509 
Total pension plan assets (d)
$71 $62 $— $642 
December 31, 2021
Asset Class:
Cash and cash equivalents$19 $— $— $19 
Government securities63 — — 63 
Corporate bonds (a)
— 36 — 36 
Equity securities (b)
46 — — 46 
Other— 76 — 76 
Investments measured at fair value$128 $112 $— $240 
Investments measured at net asset value (c)
— — — 836 
Total pension plan assets (d)
$128 $112 $— $1,076 
(a)This category represents investment grade bonds of U.S. and non-U.S. issuers from diverse industries.
(b)This category represents direct investments in mutual funds and common and preferred stocks from diverse U.S. and non-U.S. industries.
(c)Certain investments measured at fair value using the NAV per share (or its equivalent) have not been categorized in the fair value hierarchy. Amounts presented in this table are intended to reconcile the fair value hierarchy to the pension plan assets.
(d)Amounts exclude net payables of approximately $1 million as of December 31, 2022 and $6 million as of December 31, 2021.
Occidental expects to contribute approximately $100 million to its defined benefit pensions plans during 2023.
Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows for the years ended December 31:

millionsPension BenefitsPostretirement Benefits
2023$75 $64 
202478 62 
202570 59 
202667 57 
202768 55 
2028 - 2032303 261