Employee Benefits

9 Months Ended

Sep. 30, 2024

Retirement Benefits [Abstract]

Employee Benefits

3. Employee Benefits

Deferred Compensation Plan

Assets of our deferred compensation plan are included in Other assets, classified within Level 1 of the fair value hierarchy and are measured and recorded at fair value based on their quoted market prices. The following table presents the fair value of these assets (in millions of dollars):

	As of September 30, 2024		As of December 31, 2023
Deferred compensation program - Diversified investment funds in registered investment companies	$	11.8	$	11.1

Assets in the trust are accounted for as equity investments with changes in fair value recorded within Other income (expense), net (see Note 9). Offsetting liabilities relating to the deferred compensation plan are included in Other accrued liabilities and Long-term liabilities.

Short-Term Incentive Plans

As of September 30, 2024, we had a liability of $11.1 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments under the 2024 short-term incentive plans.

Postretirement Benefit Plans

The following table presents the total expense related to all postretirement benefit plans (in millions of dollars):

	Quarter Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Defined contribution plans1	$	4.4	$	4.3	$	14.4	$	14.4
Deferred compensation plan2		0.5		—		1.2		0.6
Multiemployer pension plans1		1.6		1.4		4.6		4.2
Net periodic postretirement benefit cost relating to defined benefit plans2,3		2.5		3.3		6.8		9.7
Total	$	9.0	$	9.0	$	27.0	$	28.9

1.Substantially all of these charges related to employee benefits are in COGS with the remaining balance in Selling, general, administrative, research, and development (“SG&A and R&D”) within our Statements of Consolidated Income. For the nine months ended September 30, 2024, the expense presented for our multiemployer pension plans excludes a $4.6 million charge to Restructuring costs (see Note 4).

2.Deferred compensation plan expense and the current service cost component of Net periodic postretirement benefit cost relating to Salaried VEBA are included within our Statements of Consolidated Income in SG&A and R&D for all periods presented. All other components of Net periodic postretirement benefit cost relating to Salaried VEBA are included within Other income (expense), net, on our Statements of Consolidated Income.

3.The current service cost component of Net periodic postretirement benefit cost relating to both the pension plans and the OPEB plan is included within our Statements of Consolidated Income in COGS for all periods presented. All other components of Net periodic postretirement benefit cost relating to both the pension plans and the OPEB plan are included within Other income (expense), net, on our Statements of Consolidated Income.

Warrick Pension Amendment. During the quarter ended June 30, 2024, we amended the Kaiser Aluminum Warrick pension plan (“Warrick Pension Plan”) to clarify certain plan provisions going back to the date of our acquisition of Warrick, which resulted in an interim remeasurement of the Warrick Pension Plan as of June 30, 2024. The remeasurement decreased the Warrick Pension Plan’s net funded status by $0.8 million, driven by: (i) a $2.2 million increase in pre-tax prior service cost, which we recorded to AOCI and expect to amortize on a straight-line basis over approximately 10 years, and (ii) an actuarial gain of $1.4 million, reflecting an increase in the assumed discount rate. The discount rate assumption used to determine the Warrick Pension Plan benefit obligation was 5.51% at June 30, 2024 compared to 5.04% at December 31, 2023. There was no change to the expected long-term rate of return on plan assets assumption at June 30, 2024 compared to December 31, 2023.

The Warrick Pension Plan amendment had no effect on our expected contributions for 2024. During the nine months ended September 30, 2024, we contributed $4.7 million to the pension plans. We expect to make further contributions of approximately $1.1 million to the pension plans during the remainder of 2024.

Components of Net Periodic Postretirement Benefit Cost. Our results of operations included the following impacts associated with the defined benefit plans: (i) a charge for service rendered by employees; (ii) a charge for accretion of interest; (iii) a benefit for the expected return on plan assets; (iv) amortization of prior service costs associated with plan amendments; and (v) amortization of net actuarial differences.

The following table presents the components of Net periodic postretirement benefit cost relating to the defined benefit plans (in millions of dollars):

	Pension Plans						OPEB						Salaried VEBA
	Quarter Ended						Quarter Ended						Quarter Ended
	September 30,						September 30,						September 30,
	2024			2023			2024			2023			2024			2023
Service cost	$	0.7		$	1.0		$	0.3		$	0.3		$	—		$	—
Interest cost		0.4			0.3			0.8			0.8			0.5			0.7
Expected return on plan assets		(0.3	)		(0.3	)		—			—			(0.6	)		(0.6	)
Amortization of prior service cost1		0.2			0.2			—			—			0.8			1.2
Amortization of net actuarial gain		—			—			(0.3	)		(0.3	)		—			—
Total net periodic postretirement benefit cost	$	1.0		$	1.2		$	0.8		$	0.8		$	0.7		$	1.3

	Pension Plans						OPEB						Salaried VEBA
	Nine Months Ended September 30,						Nine Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023			2024			2023
Service cost	$	2.7		$	2.8		$	0.8		$	0.8		$	—		$	—
Interest cost		1.2			0.9			2.5			2.5			1.6			2.1
Expected return on plan assets		(1.0	)		(0.8	)		—			—			(1.7	)		(1.7	)
Amortization of prior service cost1		0.5			0.3			—			—			1.0			3.7
Amortization of net actuarial gain		—			—			(0.8	)		(0.9	)		—			—
Total net periodic postretirement benefit cost	$	3.4		$	3.2		$	2.5		$	2.4		$	0.9		$	4.1

1.We amortize prior service cost on a straight-line basis over the average remaining years of service of the active plan participants.