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PENSIONS
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Pensions
25.PENSIONS
Defined contribution scheme

We operate a defined contribution scheme. The pension cost for the period represents contributions payable by us to the scheme. The charge to net income for the years ended December 31, 2022, 2021 and 2020 was $1.7 million, $2.2 million and $2.1 million, respectively.

Defined benefit schemes

We have two defined benefit pension plans both of which are closed to new entrants but still cover certain of our employees. Benefits are based on the employees' years of service and compensation. Net periodic pension plan costs are determined using the Projected Unit Credit Cost method. Our plans are funded by us in conformity with the funding requirements of the applicable government regulations. Plan assets consist of both fixed income and equity funds managed by professional fund managers.

We use December 31 as the measurement date for our pension plans.

The components of net periodic benefit costs are as follows:
Year ended December 31,
(in thousands of $)202220212020
Service cost(75)(120)(155)
Interest cost(1,087)(879)(1,271)
Expected return on plan assets254 214 318 
Recognized actuarial loss(774)(1,131)(848)
Net periodic benefit cost(1,682)(1,916)(1,956)
The components of net periodic benefit costs are recognized in the consolidated statement of operations within "administrative expenses" and "vessel operating expenses" amounting to $0.1 million, (2021: $0.2 million) and $1.6 million (2021: $1.7 million), respectively.

The estimated net loss for the defined benefit pension plans that was amortized from accumulated other comprehensive income into net periodic pension benefit cost during the year ended December 31, 2022 is $0.8 million (2021: $1.1 million).

The change in projected benefit obligation and plan assets and reconciliation of funded status for the year ended December 31, 2022 and 2021 are as follows:
(in thousands of $)20222021
Reconciliation of benefit obligation: 
Benefit obligation at January 147,215 54,122 
Service cost75 120 
Interest cost1,087 879 
Actuarial gain (1)
(10,106)(4,081)
Foreign currency exchange rate changes(1,227)(120)
Benefit payments(2,966)(3,705)
Benefit obligation at December 3134,078 47,215 
(1) Actuarial gain is sensitive to changes in key actuarial assumptions specifically discount rates, mortality rates and assumed future salary increases.

The accumulated benefit obligation at December 31, 2022 and 2021 was $33.9 million and $46.7 million, respectively.
(in thousands of $)20222021
Reconciliation of fair value of plan assets: 
Fair value of plan assets at January 115,858 16,864 
Actual return on plan assets(4,392)(46)
Employer contributions2,900 2,900 
Foreign currency exchange rate changes(1,591)(155)
Benefit payments(2,966)(3,705)
Fair value of plan assets at December 319,809 15,858 

The amounts recognized in accumulated other comprehensive income, as of December 31, 2022 and 2021, is $4.4 million and $10.9 million, respectively.

The actuarial loss recognized in other comprehensive income/(loss) is net of tax of $0.3 million, $0.7 million, and $0.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Employer contributions and benefits paid under the pension plans include $2.9 million paid from employer assets for the years ended December 31, 2022 and 2021.

(1) Our defined benefit pension plan is comprised of two schemes as follows:
 December 31, 2022
December 31, 2021
 
(in thousands of $)
UK SchemeMarine SchemeTotalUK SchemeMarine SchemeTotal
Fair value of benefit obligation(7,073)(27,005)(34,078)(11,608)(35,607)(47,215)
Fair value of plan assets8,801 1,008 9,809 15,077 781 15,858 
Funded (unfunded) status at end of year1,728 (25,997)(24,269)3,469 (34,826)(31,357)
The fair value of our plan assets, by category, as of December 31, 2022 and 2021 are as follows:
(in thousands of $)20222021
Equity securities8,801 15,077 
Cash1,008 781 
 9,809 15,858 

The asset allocation for our Marine scheme at December 31, 2022 and 2021, by asset category are as follows:
Marine scheme2022 (%)2021 (%)
Cash100 100 
Total100 100 

The asset allocation for our UK scheme at December 31, 2022 and 2021, by asset category are as follows:
UK scheme2022 (%)2021 (%)
Equity100 100 
Total100 100 

Our investment strategy is to balance risk and reward through the selection of professional investment managers and investing in pooled funds.

We are expected to make the following contributions to the schemes during the year ended December 31, 2023, as follows:
(in thousands of $)UK schemeMarine scheme
Employer contributions— 2,900 

We are expected to make the following pension disbursements as follows:
(in thousands of $)UK schemeMarine scheme
2023340 2,600 
2024370 2,500 
2025470 2,400 
2026390 2,300 
2027400 2,200 
2028 - 20322,140 9,500 

The weighted average assumptions used to determine the benefit obligation for our defined benefit pension plans for the years ended December 31 are as follows:
 20222021
Discount rate4.94 %2.43 %
Rate of compensation increase2.61 %2.70 %

The weighted average assumptions used to determine the net periodic benefit cost for our defined benefit pension plans for the years ended December 31 are as follows:
 20222021
Discount rate4.93 %2.44 %
Expected return on plan assets1.81 %1.31 %
Rate of compensation increase2.49 %2.75 %
The overall expected long-term rate of return on assets assumption used to determine the net periodic benefit cost for our plans for the years ended December 31, 2022 and 2021 is based on the weighted average of various returns on assets using the asset allocation as of the beginning of 2022 and 2021. For equities and other asset classes, we have applied an equity risk premium over ten-year governmental bonds.