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Retirement Benefit Plans | 12 Months Ended
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Dec. 31, 2022
Retirement Benefits [Abstract] |
Retirement Benefit Plans [Text Block] |
Note 17 : | Retirement Benefit Plans
Defined Contribution Plans We provide tax-qualified defined contribution plans for the benefit of eligible employees, former employees, and retirees in the US and certain other countries. The plans are designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis. For the benefit of eligible US employees, we also provide an unfunded non-tax-qualified supplemental deferred compensation plan for certain highly compensated employees. We expensed $489 million in 2022, $444 million in 2021 and $398 million in 2020 for matching contributions based on the amount of employee contributions under the US qualified defined contribution and non-qualified deferred compensation plans. US Retiree Medical Plan Upon retirement, we provide certain benefits to eligible US employees who were hired prior to 2014 under the US Retiree Medical Plan. The benefits can be used to pay all or a portion of the cost to purchase eligible coverage in a medical plan. As of December 31, 2022 and December 25, 2021, the projected benefit obligation was $527 million and $682 million, which used the discount rates of 5.6% and 2.8%. The December 31, 2022 and December 25, 2021 corresponding fair value of plan assets was $501 million and $669 million. The investment strategy for US Retiree Medical Plan assets is to invest primarily in liquid assets, due to the level of expected future benefit payments. The assets are invested in tax-aware global equity and fixed-income long credit portfolios. Both portfolios are actively managed by external managers. The tax-aware global equity portfolio is composed of a diversified mix of equities in developed countries. The tax-aware fixed-income long credit portfolio is composed of domestic securities. The allocation to each asset class will fluctuate with market conditions, such as volatility and liquidity concerns, and will typically be rebalanced when outside the target ranges, which are 55% equity and 45% fixed-income investments. As of December 31, 2022, the majority of the US Retiree Medical Plan assets were invested in exchange-traded equity securities and were measured at fair value using Level 1 inputs. The remaining US Retiree Medical Plan assets were invested in fixed-income investments and were measured at fair value using Level 2 inputs. As of December 31, 2022, the estimated benefit payments for this plan over the next 10 years are as follows:
(In Millions) |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028-2032
Postretirement medical benefits |  | $ | 40 |  |  | $ | 41 |  |  | $ | 41 |  |  | $ | 43 |  |  | $ | 44 |  |  | $ | 222 |
Pension Benefit Plans We provide defined-benefit pension plans in certain countries, most significantly the US, Ireland, Israel, and Germany. The majority of the plans' benefits have been frozen. Benefit Obligation and Plan Assets for Pension Benefit Plans The vested benefit obligation for a defined-benefit pension plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of separation or retirement.
(In Millions) |  | Dec 31, 2022 |  | Dec 25, 2021
Changes in projected benefit obligation: |  |  |  |
Beginning projected benefit obligation |  | $ | 4,456 |  |  | $ | 4,929 |
Service cost |  | 58 |  |  | 54 |
Interest cost |  | 91 |  |  | 91 |
Actuarial (gain) loss |  | (1,500) |  |  | (284) |
Currency exchange rate changes |  | (233) |  |  | (150) |
Plan settlements |  | (96) |  |  | (126) |
Other |  | (71) |  |  | (58) |
Ending projected benefit obligation 1 |  | 2,705 |  |  | 4,456 |
Changes in fair value of plan assets: |  |  |  |
Beginning fair value of plan assets |  | 2,817 |  |  | 2,878 |
Actual return on plan assets |  | (478) |  |  | 145 |
Currency exchange rate changes |  | (102) |  |  | (63) |
Plan settlements |  | (96) |  |  | (126) |
Other |  | (11) |  |  | (17) |
Ending fair value of plan assets 2 |  | 2,130 |  |  | 2,817 |
Net unfunded status |  | $ | 575 |  |  | $ | 1,639 |
Amounts recognized in the Consolidated Balance Sheets |  |  |  |
Other long-term assets |  | $ | 74 |  |  | $ | — |
Other long-term liabilities |  | $ | 649 |  |  | $ | 1,639 |
Accumulated other comprehensive loss (income), before tax 3 |  | $ | 406 |  |  | $ | 1,445 |
Accumulated benefit obligation |  | $ | 2,507 |  |  | $ | 4,086 |
1 The projected benefit obligation was approximately 30% in the US and 70% outside of the US as of December 31, 2022 and December 25, 2021. 2 The fair value of plan assets was approximately 40% in the US and 60% outside of the US as of December 31, 2022 and approximately 50% in the US and 50% outside of the US as of December 25, 2021. 3 The accumulated other comprehensive loss (income), before tax, was approximately 90% in the US and 10% outside of the US as of December 31, 2022 and approximately 30% in the US and 70% outside of the US as of December 25, 2021. Changes in actuarial gains and losses in the projected benefit obligation are generally driven by discount rate movement. We use the corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of 10% of the larger of the projected benefit obligation or the fair value of plan assets are amortized on a straight-line basis. As of December 31, 2022, the accumulated benefit obligations were $0.9 billion and $1.6 billion for the US plan and non-US plans, respectively. In 2022, the US and Ireland plans were in the net asset position and the other non-US plans had projected benefit obligations in excess of plan assets. In 2022, the US, Ireland and Israel plans had assets in excess of accumulated benefit obligations, whereas the remaining non-US plans had accumulated benefit obligations in excess of plan assets. As of December 25, 2021, the accumulated benefit obligations were $1.4 billion and $2.6 billion for the US plan and non-US plans, respectively, and all plans had accumulated benefit obligations and projected benefit obligations in excess of plan assets.
|  | Dec 31, 2022 | Dec 25, 2021
Plan with accumulated benefit obligation in excess of plan assets |  |  |
Accumulated benefit obligation |  | $ | 559 |  | $ | 4,086 |
Plan assets |  | $ | 97 |  | $ | 2,817 |
Plan with projected benefit obligation in excess of plan assets |  |  |
Projected benefit obligation |  | $ | 1,048 |  | $ | 4,456 |
Plan assets |  | $ | 399 |  | $ | 2,817 |
Assumptions for Pension Benefit Plans
|  | Dec 31, 2022 |  | Dec 25, 2021
Weighted average actuarial assumptions used to determine benefit obligations |  |  |  |
Discount rate |  | 4.9 | % |  | 2.2 | %
Rate of compensation increase |  | 3.7 | % |  | 3.2 | %
|  | 2022 |  | 2021 |  | 2020
Weighted average actuarial assumptions used to determine costs |  |  |  |  |  |
Discount rate |  | 2.2 | % |  | 1.9 | % |  | 2.3 | %
Expected long-term rate of return on plan assets |  | 3.2 | % |  | 2.7 | % |  | 3.3 | %
Rate of compensation increase |  | 3.2 | % |  | 3.2 | % |  | 3.2 | %
We establish the discount rate for each pension plan by analyzing current market long-term bond rates and matching the bond maturity with the average duration of the pension liabilities. We establish the long-term expected rate of return by developing a forward-looking, long-term return assumption for each pension fund asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class. Funding Our practice is to fund the various pension plans in amounts sufficient to meet the minimum requirements of applicable local laws and regulations. Funding for the US Retiree Medical Plan is discretionary under applicable laws and regulations. Additional funding may be provided for the pension and retiree medical plans as deemed appropriate. On a worldwide basis, our pension and retiree medical plans were 81% funded as of December 31, 2022. The US Pension Plan, which accounts for 28% of the worldwide pension and retiree medical benefit obligations, was 102% funded. Funded status is not indicative of our ability to pay ongoing pension benefits or of our obligation to fund retirement trusts. Required pension funding for US retirement plans is determined in accordance with ERISA, which sets required minimum contributions. Cumulative company funding to the US Pension Plan currently exceeds the minimum ERISA funding requirements. Net Periodic Benefit Cost The net periodic benefit cost for pension and US retiree medical benefits was $139 million in 2022 ($162 million in 2021 and $164 million in 2020). Pension Plan Assets
|  | December 31, 2022 |  | Dec 25, 2021
|  | Fair Value Measured at Reporting Date Using |  |  |  |
(In Millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Total
Equity securities |  | $ | — |  |  | $ | 297 |  |  | $ | — |  |  | $ | 297 |  |  | $ | 342 |
Fixed income |  | — |  |  | 106 |  |  | 24 |  |  | 130 |  |  | 142 |
Assets measured by fair value hierarchy |  | $ | — |  |  | $ | 403 |  |  | $ | 24 |  |  | $ | 427 |  |  | $ | 484 |
Assets measured at net asset value |  |  |  |  |  |  |  | 1,683 |  |  | 2,311 |
Cash and cash equivalents |  |  |  |  |  |  |  | 20 |  |  | 22 |
Total pension plan assets at fair value |  |  |  |  |  |  |  | $ | 2,130 |  |  | $ | 2,817 |
US Plan Assets The investment strategy for US Pension Plan assets is to manage the funded status volatility, taking into consideration the investment horizon and expected volatility to help enable sufficient assets to be available to pay pension benefits as they come due. The allocation to each asset class will fluctuate with market conditions, such as volatility and liquidity concerns, and will typically be rebalanced when outside the target ranges, which are 90% fixed income and 10% equity investments. During 2022, the US Pension Plan assets were invested in collective investment trust funds, which are measured at net asset value. Non-US Plan Assets The investments of the non-US plans are managed by insurance companies, pension funds, or third-party trustees, consistent with regulations or market practice of the country where the assets are invested. The investment manager makes investment decisions within the guidelines set by Intel or local regulations. Investments managed by qualified insurance companies or pension funds under standard contracts follow local regulations, and we are not actively involved in their investment strategies. For the assets that we have the discretion to set investment guidelines, the assets are invested in developed country equity investments and fixed-income investments, either through index funds or direct investment. In general, the investment strategy is designed to accumulate a diversified portfolio among markets, asset classes, or individual securities to reduce market risk and to help enable sufficient pension assets to be available to pay benefits as they come due. The equity investments in the non-US plan assets are invested in a diversified mix of equities of developed countries, including the US, and emerging markets throughout the world. We have control over the investment strategy related to the majority of the assets measured at net asset value, which are invested in hedge funds, bond index funds and equity index funds. The target allocation of the non-US plan assets that we have control over was approximately 45% fixed income, 35% equity, and 20% hedge fund investments in 2022. Estimated Future Benefit Payments for Pension Benefit Plans As of December 31, 2022, estimated benefit payments over the next 10 years are as follows:
(In Millions) |  | 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028-2032
Pension benefits |  | $ | 125 |  |  | $ | 113 |  |  | $ | 118 |  |  | $ | 126 |  |  | $ | 129 |  |  | $ | 700 |

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