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OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS
 12 Months Ended
Dec. 31, 2022
Other Liabilities, Including Employee Benefits [Abstract]  
Other Liabilities OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS
The components of other liabilities follow:
 December 31,
 20222021
Pension, postretirement, postemployment and other employment benefitsa
$775 $845 
Leasesb
294 281 
Provision for tax positions161 232 
Litigation accruals109 131 
Indemnification of MIND IDb
74 78 
Other149 116 
Total other liabilities$1,562 $1,683 
a.Refer to Note 7 for current portion.
b.Refer to Note 13 for further discussion.

Pension Plans.  Following is a discussion of FCX’s pension plans.

FMC Plans. FMC has U.S. trusteed, non-contributory pension plans covering some U.S. employees and some employees of its international subsidiaries hired before 2007. The applicable FMC plan design determines the manner in which benefits are calculated for any particular group of employees. Benefits are calculated based on final average monthly compensation and years of service or based on a fixed amount for each year of service. Non-bargained FMC employees hired after December 31, 2006, are not eligible to participate in the FMC U.S. pension
plan. In August 2020, the FMC Retirement Plan, the largest FMC plan, was amended such that, effective September 1, 2020, participants no longer accrue any additional benefits.

FCX’s funding policy for these plans provides that contributions to pension trusts shall be at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, for U.S. plans; or, in the case of international plans, the minimum legal requirements that may be applicable in the various countries. Additional contributions also may be made from time to time.

FCX’s primary investment objectives for the FMC plan assets held in a master trust (Master Trust) are to maintain funds sufficient to pay all benefit and expense obligations when due, minimize the volatility of the plan’s funded status to the extent practical, and to maintain prudent levels of risk consistent with the plan’s investment policy. Historically, FMC plan assets have been invested in a balanced portfolio of return-seeking and risk-mitigating assets, with the allocation between these portfolios dependent on the funded status of the plan. During 2021, FCX reallocated essentially all of the portfolio to risk-mitigating assets with the objective of minimizing funded-status volatility. The risk-mitigating assets are allocated among multiple fixed income managers. The current target allocation of the portfolio is long-duration credit (50%); long-duration U.S. government/credit (20%); core fixed income (16%); long-term U.S. Treasury Separate Trading of Registered Interest and Principal Securities (STRIPS) (13%); and cash equivalents (1%).

The expected rate of return on plan assets is evaluated at least annually, taking into consideration asset allocation, historical and expected future performance on the types of assets held in the Master Trust, and the current economic environment. Based on these factors, FCX expects the pension assets will earn an average of 5% per annum beginning January 1, 2023, which is based on the target asset allocation and long-term capital market return expectations.

For estimation purposes, FCX assumes the long-term asset mix for these plans generally will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension costs, the funded status of the plans and the need for future cash contributions. A lower-than-expected return on assets also would decrease plan assets and increase the amount of recorded pension costs in future years. When calculating the expected return on plan assets, FCX uses the market value of assets.

Among the assumptions used to estimate the pension benefit obligation is a discount rate used to calculate the present value of expected future benefit payments for service to date. The discount rate assumption for FCX’s U.S. plans is designed to reflect yields on high-quality, fixed-income investments for a given duration. The determination of the discount rate for these plans is based on expected future benefit payments together with the Mercer Yield Curve - Above Mean. The Mercer Yield Curve - Above Mean is constructed from the bonds in the Mercer Pension Discount Curve that have a yield higher than the regression mean yield curve. The Mercer Yield Curve - Above Mean consists of spot (i.e., zero coupon) interest rates at one-half-year increments for each of the next 30 years and is developed based on pricing and yield information for high-quality corporate bonds. Changes in the discount rate are reflected in FCX’s benefit obligation and, therefore, in future pension costs.

SERP Plan. FCX has an unfunded Supplemental Executive Retirement Plan (SERP) for its chief executive officer. The SERP provides for retirement benefits payable in the form of a joint and survivor annuity, life annuity or an equivalent lump sum. The participant has elected to receive an equivalent lump sum payment. The payment will equal a percentage of the participant’s highest average compensation for any consecutive three-year period during the five years immediately preceding the completion of 25 years of credited service. The SERP benefit will be reduced by the value of all benefits from current and former retirement plans (qualified and nonqualified) sponsored by FCX, by FM Services Company, FCX’s wholly owned subsidiary, or by any predecessor employer (including FCX’s former parent company), except for benefits produced by accounts funded exclusively by deductions from the participant’s pay.

PT-FI Plan. PT-FI has a defined benefit pension plan denominated in Indonesia rupiah covering substantially all of its Indonesia national employees. PT-FI funds the plan and invests the assets in accordance with Indonesia pension guidelines. The pension obligation was valued at an exchange rate of 15,652 rupiah to one U.S. dollar on December 31, 2022, and 14,198 rupiah to one U.S. dollar on December 31, 2021. Indonesia labor laws require that companies provide a minimum severance to employees upon employment termination based on the reason for termination and the employee’s years of service. PT-FI’s pension benefit obligation includes benefits determined in accordance with this law. PT-FI’s expected rate of return on plan assets is evaluated at least annually, taking into consideration its long-range estimated return for the plan based on the asset mix. Based on these factors, PT-FI
expects its pension assets will earn an average of 7% per annum beginning January 1, 2023. The discount rate assumption for PT-FI’s plan is based on the Indonesia Government Security Yield Curve. Changes in the discount rate are reflected in PT-FI’s benefit obligation and, therefore, in future pension costs.

Plan Information. FCX uses a measurement date of December 31 for its plans. Information for qualified and non-qualified plans where the projected benefit obligations and the accumulated benefit obligations exceed the fair value of plan assets follows:
 December 31,
 20222021
Projected and accumulated benefit obligation$1,831 $2,476 
Fair value of plan assets1,422 1,988 

Information on the qualified and non-qualified FCX (FMC and SERP plans) and PT-FI plans as of December 31 follows:
FCXPT-FI
 2022202120222021
Change in benefit obligation:    
Benefit obligation at beginning of year$2,553 $2,722 $237 $238 
Service cost15 12 12 13 
Interest cost71 66 14 14 
Actuarial gains(623)(117)(2)(3)
Special termination benefits and plan amendments— — 2 (2)
Foreign exchange gains(3)(1)(22)(3)
Benefits and administrative expenses paid(129)(129)(26)(20)
Benefit obligation at end of year1,884 2,553 215 237 
Change in plan assets:    
Fair value of plan assets at beginning of year2,071 1,946 240 251 
Actual return on plan assets(509)150 10 8 
Employer contributionsa
52 105 2 4 
Foreign exchange losses(2)(1)(21)(3)
Benefits and administrative expenses paid(129)(129)(26)(20)
Fair value of plan assets at end of year1,483 2,071 205 240 
Funded status$(401)$(482)$(10)$3 
Accumulated benefit obligation$1,882 $2,551 $176 $194 
Weighted-average assumptions used to determine benefit obligations:    
Discount rate5.41 %2.85 %7.00 %6.50 %
Rate of compensation increaseN/AN/A4.00 %4.00 %
Balance sheet classification of funded status:    
Other assets$8 $6 $— $3 
Accounts payable and accrued liabilities(4)(4)— — 
Other liabilities(405)(484)(10)— 
Total$(401)$(482)$(10)$3 
a.Employer contributions for 2023 are currently expected to approximate $60 million for the FCX plans and $11 million for the PT-FI plan (based on a December 31, 2022, exchange rate of 15,652 Indonesia rupiah to one U.S. dollar).

During 2022, the actuarial gain of $623 million for the FCX pension plans primarily resulted from the increase in the discount rate from 2.85% to 5.41%. During 2021, the actuarial gain of $117 million for the FCX pension plans primarily resulted from the increase in the discount rate from 2.50% to 2.85%.
The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans for the years ended December 31 follow:
 202220212020
Weighted-average assumptions:a
   
Discount rate2.85 %2.50 %2.98 %
Expected return on plan assets3.00 %5.25 %6.25 %
Rate of compensation increaseN/AN/A3.25 %
Service cost$15 $12 $37 
Interest cost71 66 77 
Expected return on plan assets(62)(98)(105)
Amortization of net actuarial losses15 25 45 
Curtailment loss— — 4 
Net periodic benefit cost$39 $5 $58 
a.The assumptions shown relate only to the FMC Retirement Plan.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT-FI’s pension plan for the years ended December 31 follow:
 202220212020
Weighted-average assumptions:   
Discount rate6.50 %6.25 %7.25 %
Expected return on plan assets7.00 %7.75 %7.75 %
Rate of compensation increase4.00 %4.00 %4.00 %
Service cost$12 $13 $11 
Interest cost14 14 14 
Expected return on plan assets(15)(19)(19)
Amortization of prior service cost1 1 2 
Amortization of net actuarial gains(1)(1)(3)
Special termination benefit2 — — 
Net periodic benefit cost$13 $8 $5 

The service cost component of net periodic benefit cost is included in operating income, and the other components are included in other income (expense), net in the consolidated statements of income.

Included in accumulated other comprehensive loss are the following amounts that have not been recognized in net periodic pension cost as of December 31:
20222021
 
Before Taxes
After Taxes and Noncontrolling Interests
Before Taxes
After Taxes and Noncontrolling Interests
Net actuarial losses$426 $305 $488 $369 
Prior service costs— (2)2 — 
$426 $303 $490 $369 

Plan assets are classified within a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), then to prices derived using significant observable inputs (Level 2) and the lowest priority to prices derived using significant unobservable inputs (Level 3).
A summary of the fair value for pension plan assets, including those measured at net asset value (NAV) as a practical expedient, associated with the FCX plans follows:
 Fair Value at December 31, 2022
 TotalNAVLevel 1Level 2Level 3
Commingled/collective funds:    
    Fixed income securities$335 $335 $— $— $— 
    Short-term investments30 30 — — — 
Fixed income:    
Corporate bonds712 — — 712 — 
Government bonds282 — — 282 — 
Private equity investments25 25 — — — 
Other investments55 — 1 54 — 
Total investments1,439 $390 $1 $1,048 $— 
Cash and receivables49 
Payables(5)
Total pension plan net assets$1,483 

 Fair Value at December 31, 2021
 TotalNAVLevel 1Level 2Level 3
Commingled/collective funds:      
Fixed income securities$522 $522 $— $— $— 
Real estate property72 72 — — — 
Short-term investments38 38 — — — 
Fixed income:
Corporate bonds911 — — 911 — 
Government bonds437 — — 437 — 
Private equity investments11 11 — — — 
Other investments74 — 1 73 — 
Total investments2,065 $643 $1 $1,421 $— 
Cash and receivables18 
Payables(12)
Total pension plan net assets$2,071 

Following is a description of the pension plan asset categories included in the above tables and the valuation techniques used to measure fair value. There have been no changes to the techniques used to measure fair value.

Commingled/collective funds are managed by several fund managers and are valued at the NAV per unit of the fund. For most of these funds, the majority of the underlying assets are actively traded securities. These funds (except the real estate property fund) primarily require up to a two-business-day notice for redemptions. The real estate property fund is valued at NAV using information from independent appraisal firms, who have knowledge and expertise about the current market values of real property in the same vicinity as the investments.

Fixed income investments include corporate and government bonds held directly by the Master Trust. Fixed income securities are valued using a bid-evaluation price or a mid-evaluation price and, as such, are classified within Level 2 of the fair value hierarchy. A bid-evaluation price is an estimated price at which a dealer would pay for a security. A mid-evaluation price is the average of the estimated price at which a dealer would sell a security and the estimated price at which a dealer would pay for a security. These evaluations are based on quoted prices, if available, or models that use observable inputs.

Private equity investments are valued at NAV using information from general partners and have inherent restrictions on redemptions that may affect the ability to sell the investments at their NAV in the near term.
A summary of the fair value hierarchy for pension plan assets associated with the PT-FI plan follows:
 Fair Value at December 31, 2022
 TotalLevel 1Level 2Level 3
Government bonds$95 `$95 $— $— 
Common stocks72 72 — — 
Mutual funds12 12 — — 
Total investments179 $179 $— $— 
Cash and receivablesa
27 
Payables(1)
Total pension plan net assets$205 

 Fair Value at December 31, 2021
 TotalLevel 1Level 2Level 3
Government bonds$114 $114 $— $— 
Common stocks80 80 — — 
Mutual funds18 18 — — 
Total investments212 $212 $— $— 
Cash and receivablesa
29 
Payables(1)
Total pension plan net assets$240 
a.Cash consists primarily of short-term time deposits.

Following is a description of the valuation techniques used for pension plan assets measured at fair value associated with the PT-FI plan. There have been no changes to the techniques used to measure fair value.

Government bonds, common stocks and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.

The techniques described above may produce a fair value calculation that may not be indicative of NRV or reflective of future fair values. Furthermore, while FCX believes its valuation techniques are appropriate and consistent with those used by other market participants, the use of different techniques or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The expected benefit payments for FCX’s and PT-FI’s pension plans follow:
FCX
PT-FIa
2023$127 $29 
2024183 26 
2025131 26 
2026132 28 
2027132 29 
2028 through 2032648 127 
a.Based on a December 31, 2022, exchange rate of 15,652 Indonesia rupiah to one U.S. dollar.

Postretirement and Other Benefits.  FCX also provides postretirement medical and life insurance benefits for certain U.S. employees and, in some cases, employees of certain international subsidiaries. These postretirement benefits vary among plans, and many plans require contributions from retirees. The expected cost of providing such postretirement benefits is accrued during the years employees render service.

The benefit obligation (funded status) for the postretirement medical and life insurance benefit plans consisted of a current portion of $6 million (included in accounts payable and accrued liabilities) and a long-term portion of $43 million (included in other liabilities) at December 31, 2022, and a current portion of $7 million and a long-term portion of $57 million at December 31, 2021.
FCX has a number of postemployment plans covering severance, long-term disability income, continuation of health and life insurance coverage for disabled employees or other welfare benefits. The accumulated postemployment benefit obligation consisted of a current portion of $7 million (included in accounts payable and accrued liabilities) and a long-term portion of $41 million (included in other liabilities) at December 31, 2022, and a current portion of $6 million and a long-term portion of $35 million at December 31, 2021.

FCX also sponsors a retirement savings plan for most of its U.S. employees. The plan allows employees to contribute a portion of their income in accordance with specified guidelines. The savings plan is a qualified 401(k) plan for all U.S. salaried and non-bargained hourly employees. Participants exercise control and direct the investment of their contributions and account balances among various investment options under the plan. FCX contributes to the plan and matches a percentage of employee contributions up to certain limits. For employees whose eligible compensation exceeds certain levels, FCX provides a nonqualified unfunded defined contribution plan, which had a liability balance of $56 million at December 31, 2022, and $51 million at December 31, 2021, all of which was included in other liabilities.

The costs charged to operations for the employee savings plan totaled $101 million in 2022, $95 million in 2021 and $40 million in 2020. The costs were lower in 2020, compared with 2022 and 2021, because of a temporary suspension of FCX contributions implemented as part of its April 2020 revised operating plans. FCX contributions resumed on January 1, 2021. FCX has other employee benefit plans, certain of which are related to FCX’s financial results, which are recognized in operating costs.
Employee Benefits OTHER LIABILITIES, INCLUDING EMPLOYEE BENEFITS
The components of other liabilities follow:
 December 31,
 20222021
Pension, postretirement, postemployment and other employment benefitsa
$775 $845 
Leasesb
294 281 
Provision for tax positions161 232 
Litigation accruals109 131 
Indemnification of MIND IDb
74 78 
Other149 116 
Total other liabilities$1,562 $1,683 
a.Refer to Note 7 for current portion.
b.Refer to Note 13 for further discussion.

Pension Plans.  Following is a discussion of FCX’s pension plans.

FMC Plans. FMC has U.S. trusteed, non-contributory pension plans covering some U.S. employees and some employees of its international subsidiaries hired before 2007. The applicable FMC plan design determines the manner in which benefits are calculated for any particular group of employees. Benefits are calculated based on final average monthly compensation and years of service or based on a fixed amount for each year of service. Non-bargained FMC employees hired after December 31, 2006, are not eligible to participate in the FMC U.S. pension
plan. In August 2020, the FMC Retirement Plan, the largest FMC plan, was amended such that, effective September 1, 2020, participants no longer accrue any additional benefits.

FCX’s funding policy for these plans provides that contributions to pension trusts shall be at least equal to the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, for U.S. plans; or, in the case of international plans, the minimum legal requirements that may be applicable in the various countries. Additional contributions also may be made from time to time.

FCX’s primary investment objectives for the FMC plan assets held in a master trust (Master Trust) are to maintain funds sufficient to pay all benefit and expense obligations when due, minimize the volatility of the plan’s funded status to the extent practical, and to maintain prudent levels of risk consistent with the plan’s investment policy. Historically, FMC plan assets have been invested in a balanced portfolio of return-seeking and risk-mitigating assets, with the allocation between these portfolios dependent on the funded status of the plan. During 2021, FCX reallocated essentially all of the portfolio to risk-mitigating assets with the objective of minimizing funded-status volatility. The risk-mitigating assets are allocated among multiple fixed income managers. The current target allocation of the portfolio is long-duration credit (50%); long-duration U.S. government/credit (20%); core fixed income (16%); long-term U.S. Treasury Separate Trading of Registered Interest and Principal Securities (STRIPS) (13%); and cash equivalents (1%).

The expected rate of return on plan assets is evaluated at least annually, taking into consideration asset allocation, historical and expected future performance on the types of assets held in the Master Trust, and the current economic environment. Based on these factors, FCX expects the pension assets will earn an average of 5% per annum beginning January 1, 2023, which is based on the target asset allocation and long-term capital market return expectations.

For estimation purposes, FCX assumes the long-term asset mix for these plans generally will be consistent with the current mix. Changes in the asset mix could impact the amount of recorded pension costs, the funded status of the plans and the need for future cash contributions. A lower-than-expected return on assets also would decrease plan assets and increase the amount of recorded pension costs in future years. When calculating the expected return on plan assets, FCX uses the market value of assets.

Among the assumptions used to estimate the pension benefit obligation is a discount rate used to calculate the present value of expected future benefit payments for service to date. The discount rate assumption for FCX’s U.S. plans is designed to reflect yields on high-quality, fixed-income investments for a given duration. The determination of the discount rate for these plans is based on expected future benefit payments together with the Mercer Yield Curve - Above Mean. The Mercer Yield Curve - Above Mean is constructed from the bonds in the Mercer Pension Discount Curve that have a yield higher than the regression mean yield curve. The Mercer Yield Curve - Above Mean consists of spot (i.e., zero coupon) interest rates at one-half-year increments for each of the next 30 years and is developed based on pricing and yield information for high-quality corporate bonds. Changes in the discount rate are reflected in FCX’s benefit obligation and, therefore, in future pension costs.

SERP Plan. FCX has an unfunded Supplemental Executive Retirement Plan (SERP) for its chief executive officer. The SERP provides for retirement benefits payable in the form of a joint and survivor annuity, life annuity or an equivalent lump sum. The participant has elected to receive an equivalent lump sum payment. The payment will equal a percentage of the participant’s highest average compensation for any consecutive three-year period during the five years immediately preceding the completion of 25 years of credited service. The SERP benefit will be reduced by the value of all benefits from current and former retirement plans (qualified and nonqualified) sponsored by FCX, by FM Services Company, FCX’s wholly owned subsidiary, or by any predecessor employer (including FCX’s former parent company), except for benefits produced by accounts funded exclusively by deductions from the participant’s pay.

PT-FI Plan. PT-FI has a defined benefit pension plan denominated in Indonesia rupiah covering substantially all of its Indonesia national employees. PT-FI funds the plan and invests the assets in accordance with Indonesia pension guidelines. The pension obligation was valued at an exchange rate of 15,652 rupiah to one U.S. dollar on December 31, 2022, and 14,198 rupiah to one U.S. dollar on December 31, 2021. Indonesia labor laws require that companies provide a minimum severance to employees upon employment termination based on the reason for termination and the employee’s years of service. PT-FI’s pension benefit obligation includes benefits determined in accordance with this law. PT-FI’s expected rate of return on plan assets is evaluated at least annually, taking into consideration its long-range estimated return for the plan based on the asset mix. Based on these factors, PT-FI
expects its pension assets will earn an average of 7% per annum beginning January 1, 2023. The discount rate assumption for PT-FI’s plan is based on the Indonesia Government Security Yield Curve. Changes in the discount rate are reflected in PT-FI’s benefit obligation and, therefore, in future pension costs.

Plan Information. FCX uses a measurement date of December 31 for its plans. Information for qualified and non-qualified plans where the projected benefit obligations and the accumulated benefit obligations exceed the fair value of plan assets follows:
 December 31,
 20222021
Projected and accumulated benefit obligation$1,831 $2,476 
Fair value of plan assets1,422 1,988 

Information on the qualified and non-qualified FCX (FMC and SERP plans) and PT-FI plans as of December 31 follows:
FCXPT-FI
 2022202120222021
Change in benefit obligation:    
Benefit obligation at beginning of year$2,553 $2,722 $237 $238 
Service cost15 12 12 13 
Interest cost71 66 14 14 
Actuarial gains(623)(117)(2)(3)
Special termination benefits and plan amendments— — 2 (2)
Foreign exchange gains(3)(1)(22)(3)
Benefits and administrative expenses paid(129)(129)(26)(20)
Benefit obligation at end of year1,884 2,553 215 237 
Change in plan assets:    
Fair value of plan assets at beginning of year2,071 1,946 240 251 
Actual return on plan assets(509)150 10 8 
Employer contributionsa
52 105 2 4 
Foreign exchange losses(2)(1)(21)(3)
Benefits and administrative expenses paid(129)(129)(26)(20)
Fair value of plan assets at end of year1,483 2,071 205 240 
Funded status$(401)$(482)$(10)$3 
Accumulated benefit obligation$1,882 $2,551 $176 $194 
Weighted-average assumptions used to determine benefit obligations:    
Discount rate5.41 %2.85 %7.00 %6.50 %
Rate of compensation increaseN/AN/A4.00 %4.00 %
Balance sheet classification of funded status:    
Other assets$8 $6 $— $3 
Accounts payable and accrued liabilities(4)(4)— — 
Other liabilities(405)(484)(10)— 
Total$(401)$(482)$(10)$3 
a.Employer contributions for 2023 are currently expected to approximate $60 million for the FCX plans and $11 million for the PT-FI plan (based on a December 31, 2022, exchange rate of 15,652 Indonesia rupiah to one U.S. dollar).

During 2022, the actuarial gain of $623 million for the FCX pension plans primarily resulted from the increase in the discount rate from 2.85% to 5.41%. During 2021, the actuarial gain of $117 million for the FCX pension plans primarily resulted from the increase in the discount rate from 2.50% to 2.85%.
The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for FCX’s pension plans for the years ended December 31 follow:
 202220212020
Weighted-average assumptions:a
   
Discount rate2.85 %2.50 %2.98 %
Expected return on plan assets3.00 %5.25 %6.25 %
Rate of compensation increaseN/AN/A3.25 %
Service cost$15 $12 $37 
Interest cost71 66 77 
Expected return on plan assets(62)(98)(105)
Amortization of net actuarial losses15 25 45 
Curtailment loss— — 4 
Net periodic benefit cost$39 $5 $58 
a.The assumptions shown relate only to the FMC Retirement Plan.

The weighted-average assumptions used to determine net periodic benefit cost and the components of net periodic benefit cost for PT-FI’s pension plan for the years ended December 31 follow:
 202220212020
Weighted-average assumptions:   
Discount rate6.50 %6.25 %7.25 %
Expected return on plan assets7.00 %7.75 %7.75 %
Rate of compensation increase4.00 %4.00 %4.00 %
Service cost$12 $13 $11 
Interest cost14 14 14 
Expected return on plan assets(15)(19)(19)
Amortization of prior service cost1 1 2 
Amortization of net actuarial gains(1)(1)(3)
Special termination benefit2 — — 
Net periodic benefit cost$13 $8 $5 

The service cost component of net periodic benefit cost is included in operating income, and the other components are included in other income (expense), net in the consolidated statements of income.

Included in accumulated other comprehensive loss are the following amounts that have not been recognized in net periodic pension cost as of December 31:
20222021
 
Before Taxes
After Taxes and Noncontrolling Interests
Before Taxes
After Taxes and Noncontrolling Interests
Net actuarial losses$426 $305 $488 $369 
Prior service costs— (2)2 — 
$426 $303 $490 $369 

Plan assets are classified within a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), then to prices derived using significant observable inputs (Level 2) and the lowest priority to prices derived using significant unobservable inputs (Level 3).
A summary of the fair value for pension plan assets, including those measured at net asset value (NAV) as a practical expedient, associated with the FCX plans follows:
 Fair Value at December 31, 2022
 TotalNAVLevel 1Level 2Level 3
Commingled/collective funds:    
    Fixed income securities$335 $335 $— $— $— 
    Short-term investments30 30 — — — 
Fixed income:    
Corporate bonds712 — — 712 — 
Government bonds282 — — 282 — 
Private equity investments25 25 — — — 
Other investments55 — 1 54 — 
Total investments1,439 $390 $1 $1,048 $— 
Cash and receivables49 
Payables(5)
Total pension plan net assets$1,483 

 Fair Value at December 31, 2021
 TotalNAVLevel 1Level 2Level 3
Commingled/collective funds:      
Fixed income securities$522 $522 $— $— $— 
Real estate property72 72 — — — 
Short-term investments38 38 — — — 
Fixed income:
Corporate bonds911 — — 911 — 
Government bonds437 — — 437 — 
Private equity investments11 11 — — — 
Other investments74 — 1 73 — 
Total investments2,065 $643 $1 $1,421 $— 
Cash and receivables18 
Payables(12)
Total pension plan net assets$2,071 

Following is a description of the pension plan asset categories included in the above tables and the valuation techniques used to measure fair value. There have been no changes to the techniques used to measure fair value.

Commingled/collective funds are managed by several fund managers and are valued at the NAV per unit of the fund. For most of these funds, the majority of the underlying assets are actively traded securities. These funds (except the real estate property fund) primarily require up to a two-business-day notice for redemptions. The real estate property fund is valued at NAV using information from independent appraisal firms, who have knowledge and expertise about the current market values of real property in the same vicinity as the investments.

Fixed income investments include corporate and government bonds held directly by the Master Trust. Fixed income securities are valued using a bid-evaluation price or a mid-evaluation price and, as such, are classified within Level 2 of the fair value hierarchy. A bid-evaluation price is an estimated price at which a dealer would pay for a security. A mid-evaluation price is the average of the estimated price at which a dealer would sell a security and the estimated price at which a dealer would pay for a security. These evaluations are based on quoted prices, if available, or models that use observable inputs.

Private equity investments are valued at NAV using information from general partners and have inherent restrictions on redemptions that may affect the ability to sell the investments at their NAV in the near term.
A summary of the fair value hierarchy for pension plan assets associated with the PT-FI plan follows:
 Fair Value at December 31, 2022
 TotalLevel 1Level 2Level 3
Government bonds$95 `$95 $— $— 
Common stocks72 72 — — 
Mutual funds12 12 — — 
Total investments179 $179 $— $— 
Cash and receivablesa
27 
Payables(1)
Total pension plan net assets$205 

 Fair Value at December 31, 2021
 TotalLevel 1Level 2Level 3
Government bonds$114 $114 $— $— 
Common stocks80 80 — — 
Mutual funds18 18 — — 
Total investments212 $212 $— $— 
Cash and receivablesa
29 
Payables(1)
Total pension plan net assets$240 
a.Cash consists primarily of short-term time deposits.

Following is a description of the valuation techniques used for pension plan assets measured at fair value associated with the PT-FI plan. There have been no changes to the techniques used to measure fair value.

Government bonds, common stocks and mutual funds are valued at the closing price reported on the active market on which the individual securities are traded and, as such, are classified within Level 1 of the fair value hierarchy.

The techniques described above may produce a fair value calculation that may not be indicative of NRV or reflective of future fair values. Furthermore, while FCX believes its valuation techniques are appropriate and consistent with those used by other market participants, the use of different techniques or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The expected benefit payments for FCX’s and PT-FI’s pension plans follow:
FCX
PT-FIa
2023$127 $29 
2024183 26 
2025131 26 
2026132 28 
2027132 29 
2028 through 2032648 127 
a.Based on a December 31, 2022, exchange rate of 15,652 Indonesia rupiah to one U.S. dollar.

Postretirement and Other Benefits.  FCX also provides postretirement medical and life insurance benefits for certain U.S. employees and, in some cases, employees of certain international subsidiaries. These postretirement benefits vary among plans, and many plans require contributions from retirees. The expected cost of providing such postretirement benefits is accrued during the years employees render service.

The benefit obligation (funded status) for the postretirement medical and life insurance benefit plans consisted of a current portion of $6 million (included in accounts payable and accrued liabilities) and a long-term portion of $43 million (included in other liabilities) at December 31, 2022, and a current portion of $7 million and a long-term portion of $57 million at December 31, 2021.
FCX has a number of postemployment plans covering severance, long-term disability income, continuation of health and life insurance coverage for disabled employees or other welfare benefits. The accumulated postemployment benefit obligation consisted of a current portion of $7 million (included in accounts payable and accrued liabilities) and a long-term portion of $41 million (included in other liabilities) at December 31, 2022, and a current portion of $6 million and a long-term portion of $35 million at December 31, 2021.

FCX also sponsors a retirement savings plan for most of its U.S. employees. The plan allows employees to contribute a portion of their income in accordance with specified guidelines. The savings plan is a qualified 401(k) plan for all U.S. salaried and non-bargained hourly employees. Participants exercise control and direct the investment of their contributions and account balances among various investment options under the plan. FCX contributes to the plan and matches a percentage of employee contributions up to certain limits. For employees whose eligible compensation exceeds certain levels, FCX provides a nonqualified unfunded defined contribution plan, which had a liability balance of $56 million at December 31, 2022, and $51 million at December 31, 2021, all of which was included in other liabilities.

The costs charged to operations for the employee savings plan totaled $101 million in 2022, $95 million in 2021 and $40 million in 2020. The costs were lower in 2020, compared with 2022 and 2021, because of a temporary suspension of FCX contributions implemented as part of its April 2020 revised operating plans. FCX contributions resumed on January 1, 2021. FCX has other employee benefit plans, certain of which are related to FCX’s financial results, which are recognized in operating costs.