We maintain various noncontributory defined benefit pension plans covering certain employees, primarily in the U.S., the U.K., Germany and Japan. We also have a contributory defined benefit plan covering certain Belgian employees. The benefits for these plans are based primarily on compensation and/or years of service. Our U.S. and U.K. defined benefit plans for non-represented employees are closed to new participants, with no additional benefits accruing under these plans as participants’ accrued benefits have been frozen. The funding policy for each plan complies with the requirements of relevant governmental laws and regulations. The pension information for all periods presented includes amounts related to salaried and hourly plans.


	Year Ended December 31, 2022				Year Ended December 31, 2021
	U.S. Pension Plans		Foreign Pension Plans		U.S. Pension Plans		Foreign Pension Plans
Change in benefit obligations:
Benefit obligation at January 1	$	680,696	$	255,234	$	740,951	$	290,385
Service cost	904		3,700		869		3,697
Interest cost	18,827		3,363		18,005		2,427

Actuarial gain	(144,288)		(49,380)		(24,576)		(14,769)
Benefits paid	(41,168)		(11,049)		(54,553)		(10,451)



Employee contributions	—		64		—		78
Foreign exchange gain	—		(18,562)		—		(14,080)
Settlements/curtailments	—		(1,028)		—		(1,998)

Other	—		(1,781)		—		(55)
Benefit obligation at December 31	$	514,971	$	180,561	$	680,696	$	255,234
Change in plan assets:
Fair value of plan assets at January 1	$	605,991	$	94,256	$	594,228	$	89,241
Actual return on plan assets	(95,925)		(29,694)		50,256		7,305
Employer contributions	930		12,451		16,060		11,550
Benefits paid	(41,168)		(11,049)		(54,553)		(10,451)


Employee contributions	—		64		—		78
Foreign exchange gain	—		(9,004)		—		(1,419)
Settlements/curtailments	—		(1,028)		—		(1,998)

Other	—		2,233		—		(50)
Fair value of plan assets at December 31	$	469,828	$	58,229	$	605,991	$	94,256

Funded status at December 31	$	(45,143)	$	(122,332)	$	(74,705)	$	(160,978)


	December 31, 2022						December 31, 2021
	U.S. Pension Plans			Foreign Pension Plans			U.S. Pension Plans			Foreign Pension Plans
Amounts recognized in consolidated balance sheets:
Current liabilities (accrued expenses)	$	(947)		$	(6,957)		$	(525)		$	(5,972)
Noncurrent liabilities (pension benefits)	(44,196)			(115,375)			(74,180)			(155,006)
Net pension liability	$	(45,143)		$	(122,332)		$	(74,705)		$	(160,978)

Amounts recognized in accumulated other comprehensive (loss) income:
Prior service benefit	$	—		$	(615)		$	—		$	(773)
Net amount recognized	$	—		$	(615)		$	—		$	(773)

Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate	5.46		%	4.04		%	2.86		%	1.44		%
Rate of compensation increase	—		%	3.67		%	—		%	3.20		%

Postretirement medical benefits and life insurance is provided for certain groups of U.S. retired employees. Medical and life insurance benefit costs have been funded principally on a pay-as-you-go basis. Although the availability of medical coverage after retirement varies for different groups of employees, the majority of employees who retire before becoming eligible for Medicare can continue group coverage by paying a portion of the cost of a monthly premium designed to cover the claims incurred by retired employees subject to a cap on payments allowed. The availability of group coverage for Medicare-eligible retirees also varies by employee group with coverage designed either to supplement or coordinate with Medicare. Retirees generally pay a portion of the cost of the coverage. Plan assets for retiree life insurance are held under an insurance contract and are reserved for retiree life insurance benefits. In 2005, the postretirement medical benefit available to U.S. employees was changed to provide that employees who are under age 50 as of December 31, 2005 would no longer be eligible for a company-paid retiree medical premium subsidy. Employees who are of age 50 and above as of December 31, 2005 and who retire after January 1, 2006 will have their retiree medical premium subsidy capped. Effective January 1, 2008, our medical insurance for certain groups of U.S. retired employees is now insured through a medical carrier.

The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of significant assumptions, for our postretirement benefit plans (in thousands):


	Year Ended December 31,
	2022		2021
	Other Postretirement Benefits		Other Postretirement Benefits
Change in benefit obligations:
Benefit obligation at January 1	$	47,493	$	51,343
Service cost	85		123
Interest cost	1,307		1,238
Actuarial (gain) loss	(10,164)		(2,568)
Benefits paid	(2,731)		(2,643)


Benefit obligation at December 31	$	35,990	$	47,493
Change in plan assets:
Fair value of plan assets at January 1	$	—	$	—

Employer contributions	2,731		2,643
Benefits paid	(2,731)		(2,643)


Fair value of plan assets at December 31	$	—	$	—
Funded status at December 31	$	(35,990)	$	(47,493)


	December 31,
	2022			2021
	Other Postretirement Benefits			Other Postretirement Benefits
Amounts recognized in consolidated balance sheets:
Current liabilities (accrued expenses)	$	(3,239)		$	(3,800)
Noncurrent liabilities (postretirement benefits)	(32,751)			(43,693)
Net postretirement liability	$	(35,990)		$	(47,493)





Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate	5.45		%	2.85		%
Rate of compensation increase	—		%	3.50		%

The components of pension benefits cost (credit) are as follows (in thousands):


	Year Ended						Year Ended						Year Ended
	December 31, 2022						December 31, 2021						December 31, 2020
	U.S. Pension Plans			Foreign Pension Plans			U.S. Pension Plans			Foreign Pension Plans			U.S. Pension Plans			Foreign Pension Plans
Service cost	$	904		$	3,700		$	869		$	3,697		$	849		$	4,000
Interest cost	18,827			3,363			18,005			2,427			23,402			3,357
Expected return on assets	(40,288)			(3,252)			(39,972)			(3,593)			(36,957)			(3,274)
Actuarial (gain) loss	(8,008)			(18,818)			(34,857)			(19,494)			40,653			14,189
Amortization of prior service benefit	—			89			—			115			—			36
Total net pension benefits (credit) cost	$	(28,565)		$	(14,918)		$	(55,955)		$	(16,848)		$	27,947		$	18,308
Weighted-average assumption percentages:
Discount rate	2.86		%	1.44		%	2.50		%	0.86		%	3.56		%	1.33		%
Expected return on plan assets	6.89		%	3.85		%	6.88		%	3.98		%	6.88		%	4.07		%
Rate of compensation increase	—		%	3.12		%	—		%	3.26		%	—		%	3.72		%

The components of postretirement benefits cost (credit) are as follows (in thousands):


	Year Ended December 31,
	2022			2021			2020
	Other Postretirement Benefits			Other Postretirement Benefits			Other Postretirement Benefits
Service cost	$	85		$	123		$	105
Interest cost	1,307			1,238			1,871

Actuarial gain	(10,163)			(2,568)			(2,573)


Total net postretirement benefits credit	$	(8,771)		$	(1,207)		$	(597)
Weighted-average assumption percentages:
Discount rate	2.85		%	2.49		%	3.53		%

Rate of compensation increase	3.50		%	3.50		%	3.50		%

The mark-to-market actuarial gain in 2022 is primarily attributable to a significant increase in the weighted-average discount rate to 5.46% from 2.86% for our U.S. pension plans and to 4.04% from 1.44% for our foreign pension plans to reflect market conditions as of the December 31, 2022 measurement date. This was partially offset by a lower return on pension plan assets in 2022 than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was (17.94)% versus an expected return of 6.48%.

The mark-to-market actuarial gain in 2021 is primarily attributable to a higher return on pension plan assets in 2021 than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 8.42% versus an expected return of 6.50%. In addition, there was an increase in the weighted average discount rate to 2.86% from 2.50% for our U.S. pension plans and to 1.44% from 0.86% for our foreign pension plans to reflect market conditions as of the December 31, 2021 measurement date.

The mark-to-market actuarial loss in 2020 is primarily attributable to a decrease in the weighted-average discount rate to 2.50% from 3.56% for our U.S. pension plans and to 0.86% from 1.33% for our foreign pension plans to reflect market conditions as of the December 31, 2020 measurement date. This was partially offset by a higher return on pension plan assets in 2020 than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 13.15% versus an expected return of 6.52%.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:


Level 1			Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2			Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3			Unobservable inputs for the asset or liability

We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Investments for which market quotations are readily available are valued at the closing price on the last business day of the year. Listed securities for which no sale was reported on such date are valued at the mean between the last reported bid and asked price. Securities traded in the over-the-counter market are valued at the closing price on the last business day of the year or at bid price. The net asset value of shares or units is based on the quoted market value of the underlying assets. The market value of corporate bonds is based on institutional trading lots and is most often reflective of bid price. Government securities are valued at the mean between bid and ask prices. Holdings in private equity securities are typically valued using the net asset valuations provided by the underlying private investment companies.

The following tables set forth the assets of our pension and postretirement plans that were accounted for at fair value on a recurring basis as of December 31, 2022 and 2021 (in thousands):


	December 31, 2022		Quoted Prices in Active Markets for Identical Items (Level 1)		Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)
Pension Assets:
Domestic Equity(a)	$	98,080	$	97,984	$	96	$	—
International Equity(b)	88,002		79,815		8,187		—
Fixed Income(c)	269,352		235,184		34,168		—

Absolute Return Measured at Net Asset Value(d)	68,725		—		—		—
Cash	3,898		3,898		—		—
Total Pension Assets	$	528,057	$	416,881	$	42,451	$	—


	December 31, 2021		Quoted Prices in Active Markets for Identical Items (Level 1)		Quoted Prices in Active Markets for Similar Items (Level 2)		Unobservable Inputs (Level 3)
Pension Assets:
Domestic Equity(a)	$	129,946	$	129,139	$	807	$	—
International Equity(b)	128,353		103,554		24,799		—
Fixed Income(c)	345,635		290,177		55,458		—

Absolute Return Measured at Net Asset Value(d)	96,313		—		—		—

Total Pension Assets	$	700,247	$	522,870	$	81,064	$	—

(d)Consists primarily of funds with holdings in private investment companies. See additional information about the Absolute Return investments below. Holdings in private investment companies are measured at fair value using the net asset value per share as a practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts of $68.7 million and $96.3 million as of December 31, 2022 and 2021, respectively, are included in this table to permit reconciliation to the reconciliation of plan assets table above.

The Company’s pension plan assets in the U.S. and U.K. represent approximately 96% of the total pension plan assets. The investment objective of these pension plan assets is to achieve solid returns while preserving capital to meet current plan cash flow requirements. Assets should participate in rising markets, with defensive action in declining markets expected to an even greater degree. Depending on market conditions, the broad asset class targets may range up or down by approximately 10%. These asset classes include but are not limited to hedge fund of funds, bonds and other fixed income vehicles, high yield fixed income securities, equities and distressed debt. At December 31, 2022 and 2021, equity securities held by our pension and OPEB plans did not include direct ownership of Albemarle common stock.

Our Absolute Return investments consist primarily of our investments in hedge fund of funds. These are holdings in private investment companies with fair values that are based on significant unobservable inputs including assumptions where there is little, if any, market activity for the investment. Investment managers or fund managers associated with these investments provide valuations of the investments on a monthly basis utilizing the net asset valuation approach for determining fair values. These valuations are reviewed by the Company for reasonableness based on applicable sector, benchmark and company performance to validate the appropriateness of the net asset values as a fair value measurement. Where available, audited financial statements are obtained and reviewed for the investments as support for the manager’s investment valuation. In general, the investment objective of these funds is high risk-adjusted returns with an emphasis on preservation of capital. The investment strategies of each of the funds vary; however, the objective of our Absolute Return investments is complementary to the overall investment objective of our U.S. pension plan assets.

We made contributions to our defined benefit pension and OPEB plans of $16.1 million, $30.3 million and $16.4 million during the years ended December 31, 2022, 2021 and 2020, respectively. We expect contributions to our domestic nonqualified and foreign qualified and nonqualified pension plans to approximate $14.6 million in 2023. Also, we expect to pay approximately $3.2 million in premiums to our U.S. postretirement benefit plan in 2023. However, we may choose to make additional voluntary pension contributions in excess of these amounts.

The current forecast of benefit payments, which reflects expected future service, amounts to (in millions):


	U.S. Pension Plans		Foreign Pension Plans		Other Postretirement Benefits
2023	$	43.2	$	14.5	$	3.2
2024	$	43.5	$	12.5	$	3.2
2025	$	43.6	$	12.9	$	3.1
2026	$	43.3	$	12.0	$	3.1
2027	$	42.8	$	12.6	$	3.0
2026-2030	$	201.4	$	68.3	$	14.0

We have a supplemental executive retirement plan (“SERP”), which provides unfunded supplemental retirement benefits to certain management or highly compensated employees. The SERP provides for incremental pension benefits to offset the limitations imposed on qualified plan benefits by federal income tax regulations. (Credits) costs relating to our SERP were ($1.2) million, ($0.2) million and $3.8 million for the years ended December 31, 2022, 2021 and 2020, respectively. The projected benefit obligation for the SERP recognized in the consolidated balance sheets at December 31, 2022 and 2021 was $6.5 million and $8.7 million, respectively. The benefit expenses and obligations of this SERP are included in the tables above. Benefits of $0.9 million are expected to be paid to SERP retirees in 2023. On October 1, 2012, our Board of Directors approved amendments to the SERP, such that effective December 31, 2014, no additional benefits shall accrue under this plan and participants’ accrued benefits shall be frozen as of that date to reflect the same changes as were made under the U.S. qualified defined benefit plan.

On March 31, 2004, a new defined contribution pension plan benefit was adopted under the qualified defined contribution plan for U.S. non-represented employees hired after March 31, 2004. On October 1, 2012 our Board of Directors approved certain plan amendments, such that effective January 1, 2013, the defined contribution pension plan benefit is expanded to include non-represented employees hired prior to March 31, 2004, and revised the contribution for all participants to be based on 5% of eligible employee compensation. The employer portion of contributions to our U.S. defined contribution pension plan amounted to $12.1 million, $16.7 million, and $6.9 million in 2022, 2021 and 2020, respectively. Contributions in 2021 included amounts deferred from 2020 as a result of the Company’s plan to maintain financial flexibility during the COVID-19 pandemic.

Certain of our employees participate in our defined contribution 401(k) employee savings plan, which is generally available to all U.S. full-time salaried and non-union hourly employees and to employees who are covered by a collective bargaining agreement that provides for such participation. This U.S. defined contribution plan is funded with contributions made by the participants and us. Our contributions to the 401(k) plan amounted to $12.7 million, $17.4 million and $7.5 million in 2022, 2021 and 2020, respectively. Contributions in 2021 included amounts deferred from 2020 as a result of the Company’s plan to maintain financial flexibility during the COVID-19 pandemic.

Prior to 2022, certain current and former employees participated in a multiemployer plan in Germany, the Pensionskasse Dynamit Nobel Versicherungsverein auf Gegenseitigkeit, Troisdorf (“DN Pensionskasse”) that provided monthly payments in the case of disability, death or retirement. On January 1, 2022, the Company terminated its membership with the DN Pensionskasse and as a result did not make any contributions during the year.

In prior years, the majority of the Company’s contributions to the DN Pensionskasse were tied to employees’ contributions, which are generally calculated as a percentage of base compensation, up to a certain statutory ceiling. Our normal contributions to this plan were $1.5 million in both the years ended December 31, 2021 and 2020, respectively.

Effective July 1, 2016, the DN Pensionskasse was subject to a financial improvement plan which expired on December 31, 2022, with the final contribution in the second quarter of 2023. This financial improvement plan called for increased capital reserves to avoid future underfunding risk. During the years ended December 31, 2022, 2021 and 2020, the Company made contributions for its employees covered under this plan of $2.8 million, $1.3 million and $3.1 million, respectively, recorded in Selling, general and administrative expenses, as a result of this financial improvement plan. The value of the additional funding required under the financial improvement plan each year is determined upon the completion of the annual financial statements and are payable in the second quarter of the following year. A portion of the additional funding necessary for the year will be based on an estimate prepared on September 30 of each year and payable in the fourth quarter of that same year.