XML 43 R24.htm IDEA: XBRL DOCUMENT v3.22.4
Pension and Other Benefit Plans
 12 Months Ended
Dec. 31, 2022
Compensation And Retirement Disclosure [Abstract]  
Pension and Other Benefit Plans

16.  Pension and Other Postretirement Benefit Plans

Pension Plans

SLB sponsors several defined benefit pension plans that cover substantially all US employees hired prior to October 1, 2004. The benefits are based on years of service and compensation, on a career-average pay basis.

 

In addition to the US defined benefit pension plans, SLB sponsors several other international defined benefit pension plans. The most significant of these international plans are the International Staff Pension Plan and the UK pension plan (collectively, the “International plans”). The International Staff Pension Plan covers certain international employees hired prior to July 1, 2014 and is based on years of service and compensation on a career-average pay basis. The UK plan covers employees hired prior to April 1, 1999, and is based on years of service and compensation, on a final salary basis.

 

The weighted-average assumed discount rate, compensation increases and expected long-term rate of return on plan assets used to determine the net pension cost for the US and International plans were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

 

International

 

 

2022

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2020

 

Discount rate

 

3.00

%

 

 

2.60

%

 

 

3.30

%

 

 

2.83

%

 

 

2.38

%

 

 

3.27

%

Compensation increases

 

4.00

%

 

 

4.00

%

 

 

4.00

%

 

 

4.83

%

 

 

4.82

%

 

 

4.83

%

Return on plan assets

 

4.40

%

 

 

6.60

%

 

 

6.60

%

 

 

5.05

%

 

 

6.73

%

 

 

6.71

%

 

Net pension cost (credit) included the following components:

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

 

International

 

 

2022

 

 

2021

 

 

2020

 

 

2022

 

 

2021

 

 

2020

 

Service cost

$

37

 

 

$

44

 

 

$

55

 

 

$

101

 

 

$

117

 

 

$

140

 

Interest cost

 

137

 

 

 

127

 

 

 

148

 

 

 

298

 

 

 

267

 

 

 

301

 

Expected return on plan assets

 

(202

)

 

 

(254

)

 

 

(233

)

 

 

(530

)

 

 

(640

)

 

 

(591

)

Amortization of prior service cost

 

-

 

 

 

-

 

 

 

8

 

 

 

-

 

 

 

-

 

 

 

-

 

Amortization of net loss

 

5

 

 

 

44

 

 

 

41

 

 

 

80

 

 

 

227

 

 

 

159

 

 

$

(23

)

 

$

(39

)

 

$

19

 

 

$

(51

)

 

$

(29

)

 

$

9

 

 

The weighted-average assumed discount rate and compensation increases used to determine the projected benefit obligations for the US and International plans were as follows:

 

 

 

 

US

 

 

International

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Discount rate

 

5.50

%

 

 

3.00

%

 

 

5.41

%

 

 

2.83

%

Compensation increases

 

4.00

%

 

 

4.00

%

 

 

4.84

%

 

 

4.83

%

 

 

The changes in the projected benefit obligation, plan assets and funded status of the plans were as follows:

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

 

International

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Change in Projected Benefit Obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projected benefit obligation at beginning of year

$

4,668

 

 

$

4,940

 

 

$

10,618

 

 

$

11,140

 

Service cost

 

37

 

 

 

44

 

 

 

101

 

 

 

117

 

Interest cost

 

137

 

 

 

127

 

 

 

298

 

 

 

267

 

Contribution by plan participants

 

-

 

 

 

-

 

 

 

47

 

 

 

53

 

Actuarial gains

 

(1,152

)

 

 

(211

)

 

 

(3,140

)

 

 

(586

)

Currency effect

 

-

 

 

 

-

 

 

 

(148

)

 

 

(18

)

Benefits paid

 

(375

)

 

 

(232

)

 

 

(363

)

 

 

(355

)

Other

 

-

 

 

 

-

 

 

 

185

 

 

 

-

 

Projected benefit obligation at end of year

$

3,315

 

 

$

4,668

 

 

$

7,598

 

 

$

10,618

 

Change in Plan Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan assets at fair value at beginning of year

$

4,696

 

 

$

4,776

 

 

$

11,221

 

 

$

10,493

 

Actual return on plan assets

 

(933

)

 

 

145

 

 

 

(2,834

)

 

 

1,040

 

Currency effect

 

-

 

 

 

-

 

 

 

(188

)

 

 

(28

)

Company contributions

 

8

 

 

 

7

 

 

 

18

 

 

 

18

 

Contributions by plan participants

 

-

 

 

 

-

 

 

 

47

 

 

 

53

 

Benefits paid

 

(375

)

 

 

(232

)

 

 

(363

)

 

 

(355

)

Other

 

-

 

 

 

-

 

 

 

225

 

 

 

-

 

Plan assets at fair value at end of year

$

3,396

 

 

$

4,696

 

 

$

8,126

 

 

$

11,221

 

Asset

$

81

 

 

$

28

 

 

$

528

 

 

$

603

 

Amounts Recognized in Balance Sheet:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Postretirement Benefits

$

(151

)

 

$

(212

)

 

$

(14

)

 

$

(19

)

Other Assets

 

232

 

 

 

240

 

 

 

542

 

 

 

622

 

 

$

81

 

 

$

28

 

 

$

528

 

 

$

603

 

Amounts Recognized in Accumulated Other Comprehensive Loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actuarial losses

$

255

 

 

$

276

 

 

$

1,366

 

 

$

1,174

 

Accumulated benefit obligation

$

3,221

 

 

$

4,484

 

 

$

7,454

 

 

$

10,370

 

 

The asset represents the difference between the plan assets and the projected benefit obligation (“PBO”). The PBO represents the actuarial present value of benefits based on employee service and compensation and includes an assumption about future compensation levels. The accumulated benefit obligation represents the actuarial present value of benefits based on employee service and compensation but does not include an assumption about future compensation levels.

 

Actuarial gains arising during each of 2022 and 2021 were primarily attributable to increases in the discount rate used to determine the PBO.

The weighted-average allocation of plan assets as of December 31, 2022 and 2021 and the target allocations by asset category as of December 31, 2022 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

 

 

International

 

 

 

Target

 

 

 

2022

 

 

 

2021

 

 

 

Target

 

 

 

2022

 

 

 

2021

 

 

Cash and cash equivalents

0 - 3

 

%

 

 

2

 

%

 

 

2

 

%

 

0 - 5

 

%

 

 

2

 

%

 

 

3

 

%

Equity securities

0 - 5

 

 

 

 

-

 

 

 

 

5

 

 

 

10 - 20

 

 

 

 

10

 

 

 

 

23

 

 

Debt securities

80 - 90

 

 

 

 

83

 

 

 

 

84

 

 

 

50 - 60

 

 

 

 

56

 

 

 

 

53

 

 

Private equity and real estate

5 - 12

 

 

 

 

11

 

 

 

 

8

 

 

 

15 - 22

 

 

 

 

19

 

 

 

 

13

 

 

Private debt

2 - 8

 

 

 

 

4

 

 

 

 

1

 

 

 

9 - 15

 

 

 

 

13

 

 

 

 

8

 

 

 

 

100

 

%

 

 

100

 

%

 

 

100

 

%

 

 

100

 

%

 

 

100

 

%

 

 

100

 

%

 

Asset performance is monitored frequently with an overall expectation that plan assets will meet or exceed the weighted index of its target asset allocation and component benchmark over rolling five-year periods.

 

 

The expected rate of return on assets assumptions reflect the long-term average rate of return expected to be earned on plan assets. The assumptions have been determined based on expectations regarding future rates of return for the portfolio considering the asset allocation and related historical rates of return. The appropriateness of the assumptions is reviewed annually.

 

The fair value of SLB’s pension plan assets at December 31, 2022 and 2021, by asset category, is presented below and was determined based on valuation techniques categorized as follows:

 

•

Level One: The use of quoted prices in active markets for identical instruments.

 

•

Level Two: The use of quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active or other inputs that are observable in the market or can be corroborated by observable market data.

 

•

Level Three: The use of significant unobservable inputs that typically require the use of management’s estimates of assumptions that market participants would use in pricing.

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US Plan Assets

 

 

2022

 

 

2021

 

 

 

 

 

 

Level

 

 

Level

 

 

Level

 

 

 

 

 

 

Level

 

 

Level

 

 

Level

 

 

Total

 

 

One

 

 

Two

 

 

Three

 

 

Total

 

 

One

 

 

Two

 

 

Three

 

Asset Category:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

$

81

 

 

$

77

 

 

$

4

 

 

$

-

 

 

$

68

 

 

$

61

 

 

$

7

 

 

$

-

 

Equity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

3

 

 

 

-

 

 

 

3

 

 

 

-

 

 

 

212

 

 

 

196

 

 

 

16

 

 

 

-

 

International

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

49

 

 

 

48

 

 

 

1

 

 

 

-

 

Debt Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

1,775

 

 

 

-

 

 

 

1,775

 

 

 

-

 

 

 

2,583

 

 

 

-

 

 

 

2,583

 

 

 

-

 

Government and related debt securities

 

1,014

 

 

 

157

 

 

 

857

 

 

 

-

 

 

 

1,353

 

 

 

199

 

 

 

1,154

 

 

 

-

 

Mortgage and asset-based securities

 

29

 

 

 

-

 

 

 

29

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Alternative Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

 

291

 

 

 

-

 

 

 

-

 

 

 

291

 

 

 

293

 

 

 

-

 

 

 

-

 

 

 

293

 

Private debt

 

124

 

 

 

-

 

 

 

-

 

 

 

124

 

 

 

39

 

 

 

-

 

 

 

-

 

 

 

39

 

Real estate

 

79

 

 

 

-

 

 

 

-

 

 

 

79

 

 

 

99

 

 

 

-

 

 

 

-

 

 

 

99

 

Total

$

3,396

 

 

$

234

 

 

$

2,668

 

 

$

494

 

 

$

4,696

 

 

$

504

 

 

$

3,761

 

 

$

431

 

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Plan Assets

 

 

2022

 

 

2021

 

 

 

 

 

 

Level

 

 

Level

 

 

Level

 

 

 

 

 

 

Level

 

 

Level

 

 

Level

 

 

Total

 

 

One

 

 

Two

 

 

Three

 

 

Total

 

 

One

 

 

Two

 

 

Three

 

Asset Category:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

$

170

 

 

$

163

 

 

$

7

 

 

$

-

 

 

$

362

 

 

$

353

 

 

$

9

 

 

$

-

 

Equity Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

US

 

580

 

 

 

497

 

 

 

83

 

 

 

-

 

 

 

1,909

 

 

 

1,600

 

 

 

309

 

 

 

-

 

International

 

273

 

 

 

273

 

 

 

-

 

 

 

-

 

 

 

717

 

 

 

717

 

 

 

-

 

 

 

-

 

Debt Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds

 

2,224

 

 

 

-

 

 

 

2,224

 

 

 

-

 

 

 

2,859

 

 

 

-

 

 

 

2,859

 

 

 

-

 

Government and related debt securities

 

2,283

 

 

 

336

 

 

 

1,947

 

 

 

-

 

 

 

2,390

 

 

 

221

 

 

 

2,169

 

 

 

-

 

Mortgage and asset-based securities

 

13

 

 

 

-

 

 

 

13

 

 

 

-

 

 

 

644

 

 

 

-

 

 

 

644

 

 

 

-

 

Alternative Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Private equity

 

1,362

 

 

 

-

 

 

 

-

 

 

 

1,362

 

 

 

1,284

 

 

 

-

 

 

 

-

 

 

 

1,284

 

Private debt

 

1,041

 

 

 

-

 

 

 

-

 

 

 

1,041

 

 

 

869

 

 

 

-

 

 

 

-

 

 

 

869

 

Real estate

 

180

 

 

 

-

 

 

 

-

 

 

 

180

 

 

 

187

 

 

 

-

 

 

 

-

 

 

 

187

 

Total

$

8,126

 

 

$

1,269

 

 

$

4,274

 

 

$

2,583

 

 

$

11,221

 

 

$

2,891

 

 

$

5,990

 

 

$

2,340

 

 

 

SLB’s funding policy is to annually contribute amounts that are based upon a number of factors including the funded status of the plans, amounts that are deductible for income tax purposes, legal funding requirements and available cash flow. SLB does not expect to make any material contributions to its postretirement benefit plans in 2023.

Postretirement Benefits Other Than Pensions

SLB provides healthcare benefits to certain former US employees who have retired.

 

The actuarial assumptions used to determine the accumulated postretirement benefit obligation and net periodic benefit cost for the US postretirement medical plan were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit Obligations

 

 

Net Periodic Benefit

 

 

At December 31,

 

 

Cost for the Year

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2020

 

Discount rate

 

5.50

%

 

 

3.00

%

 

 

3.00

%

 

 

2.60

%

 

 

3.30

%

Return on plan assets

-

 

 

-

 

 

 

2.94

%

 

 

6.21

%

 

 

6.21

%

Current medical cost trend rate

 

7.50

%

 

 

6.75

%

 

 

6.75

%

 

 

7.00

%

 

 

7.25

%

Ultimate medical cost trend rate

 

4.50

%

 

 

4.50

%

 

 

4.50

%

 

 

4.50

%

 

 

4.50

%

Year that the rate reaches the ultimate trend rate

2035

 

 

2031

 

 

2031

 

 

2031

 

 

2031

 

 

The net periodic benefit credit for the US postretirement medical plan included the following components:

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

2020

 

Service cost

$

23

 

 

$

28

 

 

$

31

 

Interest cost

 

33

 

 

 

32

 

 

 

36

 

Expected return on plan assets

 

(38

)

 

 

(73

)

 

 

(70

)

Amortization of prior service credit

 

(23

)

 

 

(23

)

 

 

(25

)

Amortization of net loss

 

(10

)

 

 

-

 

 

 

-

 

Curtailment gain

 

-

 

 

 

-

 

 

 

(69

)

 

$

(15

)

 

$

(36

)

 

$

(97

)

 

Due to the actions taken by SLB to reduce its global workforce during 2020, SLB experienced a significant reduction in the expected aggregate years of future service of its employees in its US postretirement medical plan. Accordingly, SLB recorded a curtailment gain of $69 million during the second quarter of 2020 relating to this plan. The curtailment gain includes recognition of the decrease in the benefit obligation as well as a portion of the previously unrecognized prior service credit, reflecting the reduction in expected years of future service.  As a result of the curtailment, SLB performed a remeasurement of the plan, which had an immaterial impact.  This gain was classified in Impairments & other in the Consolidated Statement of Income (Loss).  See Note 3 – Charges and Credits.

 

The changes in the accumulated postretirement benefit obligation, plan assets and funded status were as follows:

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

Change in Accumulated Postretirement Benefit Obligation:

 

 

 

 

 

 

 

Benefit obligation at beginning of year

$

1,146

 

 

$

1,234

 

Service cost

 

23

 

 

 

28

 

Interest cost

 

33

 

 

 

32

 

Contribution by plan participants

 

9

 

 

 

10

 

Actuarial gains

 

(338

)

 

 

(95

)

Benefits paid

 

(65

)

 

 

(63

)

Benefit obligation at end of year

$

808

 

 

$

1,146

 

Change in Plan Assets:

 

 

 

 

 

 

 

Plan assets at fair value at beginning of year

$

1,318

 

 

$

1,356

 

Actual return on plan assets

 

(323

)

 

 

15

 

Contributions by plan participants

 

8

 

 

 

10

 

Benefits paid

 

(65

)

 

 

(63

)

Plan assets at fair value at end of year

$

938

 

 

$

1,318

 

Asset

$

130

 

 

$

172

 

Amounts Recognized in Accumulated Other Comprehensive Loss:

 

 

 

 

 

 

 

Actuarial gains

$

199

 

 

$

225

 

Prior service credit

 

59

 

 

 

81

 

 

$

258

 

 

$

306

 

 

The asset balance relating to this plan was included in Other Assets in the Consolidated Balance Sheet.

 

The assets of the US postretirement medical plan are invested 87% in debt securities and 13% in equity securities at December 31, 2022. The fair value of these assets was primarily determined based on Level Two valuation techniques.

Other Information

The expected benefits to be paid under the US and International pension plans as well as the postretirement medical plan are as follows:

 

(Stated in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Plans

 

 

Postretirement

 

 

US

 

 

International

 

 

Medical Plan

 

2023

$

226

 

 

$

390

 

 

$

51

 

2024

$

227

 

 

$

399

 

 

$

51

 

2025

$

228

 

 

$

412

 

 

$

52

 

2026

$

230

 

 

$

425

 

 

$

52

 

2027

$

231

 

 

$

432

 

 

$

54

 

2028-2032

$

1,168

 

 

$

2,376

 

 

$

296