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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Employee Benefit Plans
 
Note 23
Employee Benefit Plans
The company has defined benefit pension plans for many employees. The company typically prefunds defined benefit plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the United States, all qualified plans are subject to the Employee Retirement Income Security Act (ERISA) minimum funding standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding requirements under laws and regulations because contributions to these pension plans may be less economic and investment returns may be less attractive than the company’s other investment alternatives.
The company also sponsors other postretirement benefit (OPEB) plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and retirees share the costs. For the company’s main U.S. medical plan, the increase to the
pre-Medicare
company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company.
The company recognizes the overfunded or underfunded status of each of its defined benefit pension and OPEB plans as an asset or liability on the Consolidated Balance Sheet.
The funded status of the company’s pension and OPEB plans for 2023 and 2022 follows:
 
     Pension Benefits                      
    
2023
      2022            Other Benefits  
     
U.S.
     
Int’l.
      U.S.     Int’l.           
2023
      2022  
Change in Benefit Obligation
      
 
          
 
   
Benefit obligation at January 1
   
$
  9,713
 
   
$
3,354
 
    $ 12,966     $ 5,351       
$
1,938
 
    $ 2,489  
Service cost
   
 
342
 
   
 
58
 
      432       83             
 
33
 
      43  
Interest cost
   
 
448
 
   
 
193
 
      318       137       
 
97
 
      60  
Plan participants’ contributions
   
 
—
 
   
 
3
 
      —       3       
 
63
 
      62  
Plan amendments
   
 
—
 
   
 
28
 
      40       38       
 
—
 
      18  
Actuarial (gain) loss
   
 
603
 
   
 
17
 
      (2,753 )      (1,559 )      
 
103
 
      (509 ) 
Foreign currency exchange rate changes
   
 
—
 
   
 
180
 
      —       (423 )      
 
5
 
      (5 ) 
Benefits paid
   
 
(714
) 
   
 
(218
) 
      (1,290 )      (276 )      
 
(222
) 
      (220 ) 
Divestitures/Acquisitions
   
 
—
 
   
 
(14
) 
      —       —       
 
—
 
      —  
Curtailment
   
 
—
 
   
 
2
 
      —       —       
 
—
 
      —  
Special termination costs
      —        2        —       —          —        —  
Benefit obligation at December 31
   
 
10,392
 
   
 
  3,605
 
        9,713         3,354       
 
  2,017
 
        1,938  
Change in Plan Assets
                   
Fair value of plan assets at January 1
   
 
7,942
 
   
 
3,286
 
      9,919       4,950       
 
—
 
      —  
Actual return on plan assets
   
 
889
 
   
 
46
 
      (1,851 )      (1,096 )      
 
—
 
      —  
Foreign currency exchange rate changes
   
 
—
 
   
 
181
 
      —       (453 )      
 
—
 
      —  
Employer contributions
   
 
1,020
 
   
 
100
 
      1,164       158       
 
159
 
      158  
Plan participants’ contributions
   
 
—
 
   
 
3
 
      —       3       
 
63
 
      62  
Benefits paid
   
 
(714
) 
   
 
(218
) 
      (1,290 )      (276 )      
 
(222
) 
      (220 ) 
Fair value of plan assets at December 31
   
 
9,137
 
   
 
3,398
 
      7,942       3,286       
 
—
 
      —  
Funded status at December 31
   
$
(1,255
) 
   
$
(207
) 
    $ (1,771 )    $ (68 )   
 
 
 
   
$
(2,017
) 
    $ (1,938 ) 
 
 
Amounts recognized on the Consolidated Balance Sheet for the company’s pension and OPEB plans at December 31, 2023 and 2022, include:
 
     Pension Benefits                      
    
2023
      2022            Other Benefits  
     
U.S.
     
Int’l.
      U.S.      Int’l.           
2023
      2022  
Deferred charges and other assets
   
$
    31
 
   
$
    703
 
    $     26      $    759             
$
     —
 
    $     —  
Accrued liabilities
   
 
(145
) 
   
 
(73
) 
      (210 )       (62 )      
 
(154
) 
      (152 ) 
Noncurrent employee benefit plans
   
 
(1,141
) 
   
 
(837
) 
      (1,587 )       (765 )      
 
(1,863
) 
      (1,786 ) 
Net amount recognized at December 31
   
$
(1,255
) 
   
$
(207
) 
    $ (1,771 )     $ (68 )   
 
 
 
   
$
(2,017
) 
    $ (1,938 ) 
For the year ended December 31, 2023, the increase in benefit obligations was primarily due to actuarial losses caused by lower discount rates used to value the obligations. For the year ended December 31, 2022, the decrease in benefit obligations was primarily due to actuarial gains caused by higher discount rates used to value the obligations and benefit payments paid to retirees in 2022.
Amounts recognized on a
before-tax
basis in “Accumulated other comprehensive loss” for the company’s pension and OPEB plans were $3,792 and $3,446 at the end of 2023 and 2022, respectively. These amounts consisted of:
 
     Pension Benefits                      
    
2023
      2022            Other Benefits  
     
U.S.
     
Int’l.
      U.S.      Int’l.           
   2023
         2022  
Net actuarial loss
   
$
3,161
 
   
$
823
 
    $ 3,147      $ 659       
$
(266
) 
    $ (392 ) 
Prior service (credit) costs
   
 
    37
 
   
 
    126
 
          40            107       
 
(89
) 
      (115 ) 
Total recognized at December 31
   
$
3,198
 
   
$
949
 
    $ 3,187      $ 766    
 
 
 
   
$
(355
) 
    $ (507 ) 
The accumulated benefit obligations for all U.S. and international pension plans were $9,284 and $3,378, respectively, at December 31, 2023, and $8,595 and $3,084, respectively, at December 31, 2022.
Information for U.S. and international pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2023 and 2022, was:
 
     Pension Benefits  
    
2023
      2022  
     
U.S.
     
Int’l.
      U.S.      Int’l.  
Projected benefit obligations
   
$
1,203
 
   
$
913
 
    $ 1,322      $ 828  
Accumulated benefit obligations
   
 
     1,108
 
   
 
     773
 
           1,135               671  
Fair value of plan assets
   
 
—
 
   
 
4
 
      —        3  
The components of net periodic benefit cost and amounts recognized in the Consolidated Statement of Comprehensive Income for 2023, 2022 and 2021 are shown in the table below:
 
 
     Pension Benefits                            
    
2023
      2022     2021            Other Benefits   
     
U.S.
    
Int’l.
      U.S.     Int’l.     U.S.     Int’l.           
2023
      2022     2021   
Net Periodic Benefit Cost
     
 
              
 
     
Service cost
   
$
342
 
  
$
58
 
    $ 432     $ 83     $ 450     $ 123       
$
33
 
    $ 43     $ 43   
Interest cost
   
 
448
 
  
 
193
 
      318       137       235       137       
 
97
 
      60       53   
Expected return on plan assets
   
 
(557
) 
  
 
(204
) 
      (624 )      (176 )      (596 )      (171 )      
 
—
 
      —       —   
Amortization of prior service costs (credits)
   
 
4
 
  
 
8
 
      2       6       2       8       
 
(25
) 
      (27 )      (27)  
Recognized actuarial losses
   
 
199
 
  
 
8
 
      218       15       309       46       
 
(19
) 
      13       16   
Settlement losses
   
 
56
 
  
 
—
 
      363       (6 )      672       7       
 
—
 
      —       —   
Curtailment losses (gains)
   
 
—
 
  
 
2
 
      —       (5 )      —       (1 )      
 
—
 
      —       —   
Special termination benefits
   
 
—
 
  
 
2
 
      —       —       —       —       
 
—
 
      —       —   
Acquisition/Divestiture losses (gains)
   
 
—
 
  
 
(2
) 
      —       —       —       —       
 
—
 
      —       —   
Total net periodic benefit cost
   
 
492
 
  
 
65
 
        709         54         1,072         149       
 
   86
 
         89          85   
Changes Recognized in Comprehensive Income
     
 
              
 
     
Net actuarial (gain) loss during period
   
 
270
 
  
 
172
 
      (279 )      (257 )      (725 )      (408 )      
 
108
 
      (514 )      (111)  
Amortization of actuarial loss
   
 
(255
) 
  
 
(8
) 
      (581 )      (5 )      (981 )      (73 )      
 
19
 
      (13 )      (15)  
Prior service (credits) costs during period
   
 
—
 
  
 
28
 
      40       38       —       —       
 
1
 
      18       —   
Amortization of prior service (costs) credits
   
 
(4
) 
  
 
(8
) 
      (2 )      (6 )      (2 )      (11 )      
 
25
 
      27       27   
Total changes recognized in other
comprehensive income
   
 
11
 
  
 
184
 
      (822 )      (230 )      (1,708 )      (492 )      
 
153
 
      (482 )      (99)  
Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
   
$
503
 
  
$
249
 
    $ (113 )    $ (176 )    $ (636 )    $ (343 )   
 
 
 
   
$
239
 
    $ (393 )    $ (14)  
Assumptions
 The following weighted-average assumptions were used to determine benefit obligations and net periodic benefit costs for years ended December 31:
 
    Pension Benefits                             
   
2023
     2022     2021                    Other Benefits  
    
U.S.
     
Int’l.
     U.S.     Int’l.     U.S.     Int’l.           
2023
      2022      2021  
Assumptions used to determine benefit obligations:
     
 
             
 
      
Discount rate
  
 
5.0 %
 
   
 
5.5 %
 
     5.2 %       5.8 %       2.8 %       2.8 %       
 
5.1 %
 
      5.3 %        2.9 %  
Rate of compensation increase
  
 
4.5 %
 
   
 
3.9 %
 
     4.5 %       4.2 %       4.5 %       4.1 %       
 
N/A
 
      N/A        N/A  
Assumptions used to determine net periodic benefit cost:
     
 
             
 
      
Discount rate for service cost
  
 
5.2 %
 
   
 
5.8 %
 
     3.6 %       2.8 %       3.0 %       2.4 %       
 
5.4 %
 
      3.1 %        3.0 %  
Discount rate for interest cost
  
 
5.0 %
 
   
 
5.8 %
 
     2.8 %       2.8 %       1.9 %       2.4 %       
 
5.2 %
 
      2.4 %        2.1 %  
Expected return on plan assets
  
 
7.0 %
 
   
 
6.1 %
 
     6.6 %       3.9 %       6.5 %       3.5 %       
 
N/A
 
      N/A        N/A  
Rate of compensation increase
  
 
4.5 %
 
   
 
4.2 %
 
     4.5 %       4.1 %       4.5 %       4.0 %    
 
 
 
   
 
N/A
 
      N/A        N/A  
Expected Return on Plan Assets
The company’s estimated long-term rates of return on pension assets are driven primarily by actual historical asset-class returns, an assessment of expected future performance, advice from external actuarial firms and the incorporation of specific asset-class risk factors. Asset allocations are periodically updated using pension plan asset/liability studies, and the company’s estimated long-term rates of return are consistent with these studies. For 2023, the company used an expected long-term rate of return of 7.0 percent for U.S. pension plan assets, which account for 71 percent of the company’s pension plan assets at the beginning of the year.
The market-related value of assets of the main U.S. pension plan used in the determination of pension expense was based on the market values in the three months preceding the
year-end
measurement date. Management considers the
three-month
time period long enough to minimize the effects of distortions from
day-to-day
market volatility and still be contemporaneous to the end of the year. For other plans, market value of assets as of
year-end
is used in calculating the pension expense.
Discount Rate
The discount rate assumptions used to determine the U.S. and international pension and OPEB plan obligations and expense reflect the rate at which benefits could be effectively settled, and are equal to the equivalent single rate resulting from yield curve analysis. This analysis considered the projected benefit payments specific to the company’s plans and the yields on high-quality bonds. The projected cash flows were discounted to the valuation date using the yield curve for the main U.S. pension and OPEB plans. The effective discount rates derived from this analysis were 5.0 percent, 5.2 percent, and 2.8 percent for 2023, 2022, and 2021, respectively, for both the main U.S. pension and OPEB plans.
 
 
Other Benefit Assumptions
For the measurement of accumulated postretirement benefit obligation at December 31, 2023, for the main U.S. OPEB plan, the assumed health care cost-trend rates start with 8.4 percent in 2024 and gradually decline to 4.5 percent for 2033 and beyond. For this measurement at December 31, 2022, the assumed health care cost-trend rates started with 6.6 percent in 2023 and gradually declined to 4.5 percent for 2032 and beyond.
Plan Assets and Investment Strategy
The fair value measurements of the company’s pension plans for 2023 and 2022 are as follows:
 
    U.S.                  Int’l.  
     Total     Level 1     Level 2     Level 3     NAV                    Total     Level 1     Level 2     Level 3     NAV  
At December 31, 2022
             
 
            
Equities
             
 
            
U.S.
1
   $ 1,358     $ 1,358     $ —     $ —     $ —     
 
     $ 164     $ 164     $ —     $ —     $ —  
International
     946       946       —       —       —     
 
       120       120       —       —       —  
Collective Trusts/Mutual Funds
2
     1,695       4       —       —       1,691     
 
       87       6       —       —       81  
Fixed Income
             
 
            
Government
     110       —       110       —       —     
 
       185       127       58       —       —  
Corporate
     680       —       680       —       —     
 
       343       15       328       —       —  
Bank Loans
     45       —       45       —       —     
 
       —       —       —       —       —  
Mortgage/Asset Backed
     1       —       1       —       —     
 
       4       —       4       —       —  
Collective Trusts/Mutual Funds
2
     1,616       —       —       —       1,616     
 
       1,750       —       —       —       1,750  
Mixed Funds
3
     —       —       —       —       —     
 
       87       14       73       —       —  
Real Estate
4
     1,184       —       —       —       1,184     
 
       198       —       —       38       160  
Alternative Investments
     —       —       —       —       —     
 
       —       —       —       —       —  
Cash and Cash Equivalents
     200       25       —       —       175     
 
       80       69       2       —       9  
Other
5
     107       37       15       54       1     
 
 
 
  
 
 
 
     268       —       18       85       165  
Total at December 31, 2022
   $   7,942     $   2,370     $  851     $  54     $   4,667     
 
 
 
  
 
 
 
   $   3,286     $  515     $  483     $  123     $   2,165  
At December 31, 2023
             
 
            
Equities
             
 
            
U.S.
1
  
$
1,691
 
  
$
1,689
 
  
$
1
 
  
$
1
 
  
$
—
 
   
 
    
$
188
 
  
$
188
 
  
$
—
 
  
$
—
 
  
$
—
 
International
  
 
1,128
 
  
 
1,128
 
  
 
—
 
  
 
—
 
  
 
—
 
   
 
    
 
124
 
  
 
124
 
  
 
—
 
  
 
—
 
  
 
—
 
Collective Trusts/Mutual Funds
2
  
 
1,269
 
  
 
4
 
  
 
—
 
  
 
—
 
  
 
1,265
 
   
 
    
 
95
 
  
 
6
 
  
 
—
 
  
 
—
 
  
 
89
 
Fixed Income
             
 
            
Government
  
 
82
 
  
 
—
 
  
 
82
 
  
 
—
 
  
 
—
 
   
 
    
 
172
 
  
 
101
 
  
 
71
 
  
 
—
 
  
 
—
 
Corporate
  
 
964
 
  
 
—
 
  
 
964
 
  
 
—
 
  
 
—
 
   
 
    
 
431
 
  
 
4
 
  
 
427
 
  
 
—
 
  
 
—
 
Bank Loans
  
 
5
 
  
 
—
 
  
 
5
 
  
 
—
 
  
 
—
 
   
 
    
 
—
 
  
 
—
 
  
 
—
 
  
 
—
 
  
 
—
 
Mortgage/Asset Backed
  
 
1
 
  
 
—
 
  
 
1
 
  
 
—
 
  
 
—
 
   
 
    
 
5
 
  
 
—
 
  
 
5
 
  
 
—
 
  
 
—
 
Collective Trusts/Mutual Funds
2
  
 
2,293
 
  
 
—
 
  
 
—
 
  
 
—
 
  
 
2,293
 
   
 
    
 
1,819
 
  
 
—
 
  
 
—
 
  
 
—
 
  
 
1,819
 
Mixed Funds
3
  
 
—
 
  
 
—
 
  
 
—
 
  
 
—
 
  
 
—
 
   
 
    
 
85
 
  
 
8
 
  
 
77
 
  
 
—
 
  
 
—
 
Real Estate
4
  
 
1,087
 
  
 
—
 
  
 
—
 
  
 
—
 
  
 
1,087
 
   
 
    
 
147
 
  
 
—
 
  
 
24
 
  
 
—
 
  
 
123
 
Alternative Investments
  
 
—
 
  
 
—
 
  
 
—
 
  
 
—
 
  
 
—
 
   
 
    
 
9
 
  
 
—
 
  
 
9
 
  
 
—
 
  
 
—
 
Cash and Cash Equivalents
  
 
548
 
  
 
12
 
  
 
—
 
  
 
—
 
  
 
536
 
   
 
    
 
81
 
  
 
74
 
  
 
1
 
  
 
—
 
  
 
6
 
Other
5
  
 
69
 
  
 
(2
) 
  
 
14
 
  
 
56
 
  
 
1
 
   
 
 
 
  
 
 
 
  
 
242
 
  
 
—
 
  
 
11
 
  
 
81
 
  
 
150
 
Total at December 31, 2023
  
$
9,137
 
  
$
2,831
 
  
$
1,067
 
  
$
57
 
  
$
5,182
 
   
 
 
 
  
 
 
 
  
$
3,398
 
  
$
505
 
  
$
625
 
  
$
81
 
  
$
2,187
 
1
There were no investments in the company’s common stock at December 31, 2023 or December 31, 2022.
2
Collective Trusts/Mutual Funds for U.S. plans are entirely index funds; for International plans, they are mostly unit trust and index funds.
3
Mixed funds are composed of funds that invest in both equity and fixed-income instruments in order to diversify and lower risk.
4
The
year-end
valuations of the U.S. real estate assets are based on third-party appraisals that occur at least once a year for each property in the portfolio.
5
The “Other” asset class includes net payables for securities purchased but not yet settled (Level 1); dividends and interest- and
tax-related
receivables (Level 2); insurance contracts (Level 3); and investments in private-equity limited partnerships (NAV).
 
 
The effects of fair value measurements using significant unobservable inputs on changes in Level 3 plan assets are outlined below:
 
     Equity                       
      U.S.      International      Real Estate      Other      Total  
Total at December 31, 2021
    $     —      $      1      $      42      $     161      $    204  
Actual Return on Plan Assets:
               
Assets held at the reporting date
      —        (1 )       —        (18 )       (19 ) 
Assets sold during the period
      —        —        (4 )       —        (4 ) 
Purchases, Sales and Settlements
      —        —        —        (4 )       (4 ) 
Transfers in and/or out of Level 3
      —        —        —        —        —  
Total at December 31, 2022
    $ —      $ —      $ 38      $ 139      $ 177  
Actual Return on Plan Assets:
               
Assets held at the reporting date
   
 
1
 
   
 
—
 
   
 
5
 
   
 
—
 
   
 
6
 
Assets sold during the period
   
 
—
 
   
 
—
 
   
 
—
 
   
 
(2
) 
   
 
(2
) 
Purchases, Sales and Settlements
   
 
—
 
   
 
—
 
   
 
—
 
   
 
—
 
   
 
—
 
Transfers in and/or out of Level 3
   
 
—
 
   
 
—
 
   
 
(43
) 
   
 
—
 
   
 
(43
) 
Total at December 31, 2023
   
$
1
 
   
$
—
 
   
$
—
 
   
$
137
 
   
$
138
 
The primary investment objectives of the pension plans are to achieve the highest rate of total return within prudent levels of risk and liquidity, to diversify and mitigate potential downside risk associated with the investments, and to provide adequate liquidity for benefit payments and portfolio management.
The company’s U.S. and U.K. pension plans comprise 95 percent of the total pension assets. Both the U.S. and U.K. plans have an Investment Committee that regularly meets during the year to review the asset holdings and their returns. To assess the plans’ investment performance, long-term asset allocation policy benchmarks have been established.
For the primary U.S. pension plan, the company’s Investment Committee has established the following approved asset allocation ranges: Equities 35–65 percent, Fixed Income 25–45 percent, Real Estate 5–25 percent, Alternative Investments 0–5 percent and Cash 0–15 percent. For the U.K. pension plan, the U.K. Board of Trustees has established the following asset allocation guidelines: Equities 5–15 percent, Fixed Income 63–93 percent, Real Estate 5–15 percent, and Cash 0–7 percent. The other significant international pension plans also have established maximum and minimum asset allocation ranges that vary by plan. Actual asset allocation within approved ranges is based on a variety of factors, including market conditions and liquidity constraints. To mitigate concentration and other risks, assets are invested across multiple asset classes with active investment managers and passive index funds.
The company does not prefund its OPEB obligations.
Cash Contributions and Benefit Payments
In 2023, the company contributed $1,020 and $100 to its U.S. and international pension plans, respectively. In 2024, the company expects contributions to be approximately $750 to its U.S. plans and $100 to its international pension plans. Actual contribution amounts are dependent upon investment returns, changes in pension obligations, regulatory environments, tax law changes and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.
The company anticipates paying OPEB benefits of approximately $150 in 2024; $159 was paid in 2023.
The following benefit payments, which include estimated future service, are expected to be paid by the company in the next 10 years:
 
     Pension Benefits            Other  
      U.S.      Int’l.            Benefits  
2024
    $     886      $     216        $     154  
2025
      912        210          151  
2026
      904        222          149  
2027
      901        228          147  
2028
      877        240          146  
2029-2033
      4,248        1,266    
 
 
 
      716  
Employee Savings Investment Plan
Eligible employees of Chevron and certain of its subsidiaries participate in the Chevron Employee Savings Investment Plan (ESIP). Compensation expense for the ESIP totaled $320, $283 and $252 in 2023, 2022 and 2021, respectively.
 
 
Benefit Plan Trusts
Prior to its acquisition by Chevron, Texaco established a benefit plan trust for funding obligations under some of its benefit plans. At
year-end
2023, the trust contained 14.2 million shares of Chevron treasury stock. The trust will sell the shares or use the dividends from the shares to pay benefits only to the extent that the company does not pay such benefits. The company intends to continue to pay its obligations under the benefit plans. The trustee will vote the shares held in the trust as instructed by the trust’s beneficiaries. The shares held in the trust are not considered outstanding for
earnings-per-share
purposes until distributed or sold by the trust in payment of benefit obligations.
Employee Incentive Plans
The Chevron Incentive Plan is an annual cash bonus plan for eligible employees that links awards to corporate and individual performance in the prior year. Charges to expense for cash bonuses were $809, $1,169 and $1,165
in 2023, 2022 and 2021, respectively. Chevron also has the LTIP for officers and other regular salaried employees of the company and its subsidiaries who hold positions of significant responsibility. Awards under the LTIP consist of stock options and other share-based compensation that are described in
.