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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2023
Defined Benefit Plan [Abstract] |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Retirement and Other Postretirement Benefit Plans Retirement Plans - We have a legacy defined benefit pension plan covering certain employees and former employees, which closed to new participants in 2005. In addition, we have a supplemental executive retirement plan for the benefit of certain officers who participate in our defined benefit pension plan. Our supplemental executive retirement plan is closed to new participants. We fund our defined benefit pension plan at a level needed to maintain or exceed the minimum funding levels required by the Employee Retirement Income Security Act of 1974, as amended. Other Postretirement Benefit Plans - We sponsor legacy health and welfare plans that provide postretirement medical and life insurance benefits to employees hired prior to 2017 who retire with at least five years of full-time consecutive service. The postretirement medical plan for pre-Medicare participants is contributory, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance. The postretirement medical plan for Medicare-eligible participants is an account-based plan under which participants may elect to purchase private insurance policies under a private exchange and/or seek reimbursement of other eligible medical expenses. Magellan Acquisition - As a result of the Magellan Acquisition, we assumed the pension plan assets and obligations of Magellan. These obligations are composed of two defined benefit pension plans, including one for non-union employees and one for union employees. The pension plan for non-union employees closed to new participants upon the closing of the acquisition. The pension plan for union employees closed to new participants in January 2024. We fund these defined benefit pension plans at a level needed to maintain or exceed the minimum funding levels required by the Employee Retirement Income Security Act of 1974, as amended. We also assumed the postretirement benefit obligations of Magellan which covers certain employees of Magellan. All employees are eligible to make salary deferrals and receive company matching contributions under our 401(k) Plan, and employees that do not participate in our defined benefit pension plans are also eligible to receive quarterly and annual profit-sharing contributions under our 401(k) Plan. Obligations and Funded Status - The following table sets forth our retirement and other postretirement benefit plans benefit obligations and fair value of plan assets for the periods indicated:
|  | Retirement Benefits | Other Postretirement Benefits
|  | December 31, | December 31,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Change in benefit obligation |  | (Millions of dollars)
Benefit obligation, beginning of period |  | $ | 423 |  |  | $ | 567 |  |  | $ | 38 |  |  | $ | 51 |
Service cost |  | 7 |  |  | 7 |  |  | — |  |  | — |
Interest cost |  | 27 |  |  | 18 |  |  | 2 |  |  | 1 |
Plan participants’ contributions |  | — |  |  | — |  |  | 1 |  |  | 1 |
Actuarial (gain) loss |  | 38 |  |  | (149) |  |  | 3 |  |  | (11) |
Benefits paid |  | (33) |  |  | (20) |  |  | (4) |  |  | (4) |
Magellan Acquisition |  | 240 |  |  | — |  |  | 11 |  |  | — |
Benefit obligation, end of period (a) |  | 702 |  |  | 423 |  |  | 51 |  |  | 38 |
Change in plan assets |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of period |  | 322 |  |  | 413 |  |  | 17 |  |  | 24 |
Actual return on plan assets |  | 60 |  |  | (71) |  |  | 2 |  |  | (4) |
Plan participants’ contributions |  | — |  |  | — |  |  | 1 |  |  | 1 |
Benefits paid |  | (33) |  |  | (20) |  |  | (4) |  |  | (4) |
Magellan Acquisition |  | 205 |  |  | — |  |  | — |  |  | — |
Fair value of plan assets, end of period (b) |  | 554 |  |  | 322 |  |  | 16 |  |  | 17 |
Balance at December 31 |  | $ | (148) |  |  | $ | (101) |  |  | $ | (35) |  |  | $ | (21) |
Current liabilities |  | $ | (5) |  |  | $ | (5) |  |  | $ | — |  |  | $ | — |
Noncurrent liabilities |  | (143) |  |  | (96) |  |  | (35) |  |  | (21) |
Balance at December 31 |  | $ | (148) |  |  | $ | (101) |  |  | $ | (35) |  |  | $ | (21) |
(a) - The benefit obligation for Retirement Benefits at December 31, 2023 and 2022, include the supplemental executive retirement plan obligation. (b) - Fair value of plan assets for Retirement Benefits exclude the assets of our supplemental executive retirement plan, which totaled $89 million and $92 million at December 31, 2023 and 2022, respectively, and are included in other assets on the Consolidated Balance Sheets. These assets are maintained in a rabbi trust and are not treated as assets of the supplemental executive retirement plan. The accumulated benefit obligation for our retirement plans was $637 million and $409 million at December 31, 2023 and 2022, respectively. The actuarial loss impacting our benefit obligations for our retirement and other postretirement benefit plans is due primarily to changes in the discount rate assumptions discussed in the “Actuarial Assumptions” section below. The components of net periodic benefit cost and related assumptions, and amounts recognized in other comprehensive income related to our retirement and other postretirement benefit plans are not material. The balance in accumulated other comprehensive loss at December 31, 2023 and 2022, was $64 million and $48 million, respectively. This balance is expected to be amortized over the average remaining service period of employees participating in these plans. Actuarial Assumptions - The following table sets forth the weighted-average assumptions used to determine benefit obligations for retirement and other postretirement benefits for the periods indicated:
|  | Retirement Benefits | Other Postretirement Benefits
|  | December 31, | December 31,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Discount rate |  | 5.40% |  | 5.75% |  | 5.50% |  | 5.75%
Compensation increase rate |  | 3.65% |  | 3.60% |  | NA |  | NA
Interest credit rating (a) |  | 4.03% |  | NA |  | NA |  | NA
(a) - This actuarial assumption is only applicable to the pension plans assumed with the Magellan Acquisition. We determine our discount rates annually utilizing portfolios of high-quality bonds matched to the estimated benefit cash flows of our retirement and other postretirement benefit plans. Bonds selected to be included in the portfolios are only those rated by S&P or Moody’s as an AA or Aa2 rating or better and exclude callable bonds, bonds with less than a minimum issue size, yield outliers and other filtering criteria to remove unsuitable bonds. Plan Assets - Our investment strategy is to invest plan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goal of this strategy is to maximize investment returns while managing risk in order to meet the plan’s current and projected financial obligations. The investment allocation for our legacy ONEOK defined benefit pension plan follows a glide path approach of liability-driven investing that shifts a higher portfolio weighting to fixed income as the plan’s funded status increases. A majority of the legacy Magellan pension assets are allocated to fixed income securities and invested to match the duration of the plans’ short, intermediate and long-term liabilities, with the remaining amount allocated to equity securities. Our pension plans utilize a diversified mix of investments that may include domestic and international equities, short, intermediate and long term corporate and government obligations, real estate and hedge funds. The combined target allocation for the assets of our pension plans as of December 31, 2023, is as follows:
Domestic and international equities |  | 32 | %
Long duration fixed income |  | 56 | %
Return-seeking credit |  | 4 | %
Hedge funds |  | 5 | %
Real estate funds |  | 3 | %
Total |  | 100 | %
As part of our risk management for the plans, minimums and maximums have been set for each of the asset classes listed above. The fair value of the plan assets for our other postretirement benefit plans as of December 31, 2023 are not material. The following tables set forth the plan assets by fair value category as of the measurement date for our defined benefit pension plans:
|  | Pension Benefits
|  | December 31, 2023
Asset Category |  | Level 1 |  | Level 2 |  | Level 3 |  | Subtotal |  | Measured at NAV (d) |  | Total
|  | (Millions of dollars)
Investments: |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 65 |  |  | $ | — |  |  | $ | — |  |  | $ | 65 |  |  | $ | — |  |  | $ | 65 |
Cash and money market funds |  | 9 |  |  | — |  |  | — |  |  | 9 |  |  | — |  |  | 9 |
Government obligations |  | 45 |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | 45 |
Corporate obligations |  | 100 |  |  | — |  |  | — |  |  | 100 |  |  | — |  |  | 100 |
Common/collective trusts |  |  |  |  |  |  |  |  |  |  |  |
Equity securities (a) |  | — |  |  | — |  |  | — |  |  | — |  |  | 109 |  |  | 109 |
Real estate funds |  | — |  |  | — |  |  | — |  |  | — |  |  | 17 |  |  | 17 |
Government obligations |  | — |  |  | — |  |  | — |  |  | — |  |  | 60 |  |  | 60 |
Corporate obligations (b) |  | — |  |  | — |  |  | — |  |  | — |  |  | 114 |  |  | 114 |
Short-term investments |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |
Other investments (c) |  | — |  |  | — |  |  | — |  |  | — |  |  | 29 |  |  | 29 |
Fair value of plan assets |  | $ | 219 |  |  | $ | — |  |  | $ | — |  |  | $ | 219 |  |  | $ | 335 |  |  | $ | 554 |
(a) - This category represents securities of the respective market sector from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category represents alternative investments in limited partnerships, which can be redeemed with a 30-day notice with no further restrictions. There are no unfunded capital commitments. These limited partnerships invest through multi-strategy programs in broadly diversified portfolios of private investment funds, hedge funds and/or separate accounts to seek equity-like returns with low market correlation, reduced volatility and limited risk. (d) - Plan asset investments measured at fair value using the net asset value per share.
|  | Pension Benefits
|  | December 31, 2022
Asset Category |  | Level 1 |  | Level 2 |  | Level 3 |  | Subtotal |  | Measured at NAV (d) |  | Total
|  | (Millions of dollars)
Investments: |  |  |  |  |  |  |  |  |  |  |  |
Common/collective trusts |  |  |  |  |  |  |  |  |  |  |  |
Equity securities (a) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 100 |  |  | $ | 100 |
Real estate funds |  | — |  |  | — |  |  | — |  |  | — |  |  | 26 |  |  | 26 |
Government obligations |  | — |  |  | — |  |  | — |  |  | — |  |  | 57 |  |  | 57 |
Corporate obligations (b) |  | — |  |  | — |  |  | — |  |  | — |  |  | 102 |  |  | 102 |
Short-term investments |  | — |  |  | — |  |  | — |  |  | — |  |  | 6 |  |  | 6 |
Other investments (c) |  | — |  |  | — |  |  | — |  |  | — |  |  | 31 |  |  | 31 |
Fair value of plan assets |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 322 |  |  | $ | 322 |
(a) - This category represents securities of the respective market sector from diverse industries. (b) - This category represents bonds from diverse industries. (c) - This category represents alternative investments in limited partnerships, which can be redeemed with a 30-day notice with no further restrictions. There are no unfunded capital commitments. These limited partnerships invest through multi-strategy programs in broadly diversified portfolios of private investment funds, hedge funds and/or separate accounts to seek equity-like returns with low market correlation, reduced volatility and limited risk. (d) - Plan asset investments measured at fair value using the net asset value per share. Contributions - During 2023, we made no contributions to our defined benefit pension and other postretirement benefit plans. We contributed $5 million to our legacy defined benefit pension in January 2024, and we do not expect to make any contributions to our other postretirement benefit plans in 2024. Pension and Other Postretirement Benefit Payments - Benefit payments for our defined benefit pensions and other postretirement benefit plans for the period ending December 31, 2023, were $33 million and $4 million, respectively. The following table sets forth the defined benefit pension and other postretirement benefits payments expected to be paid in 2024 through 2033:
|  | Pension Benefits |  | Other Postretirement Benefits
Benefits to be paid in: |  | (Millions of dollars)
2024 |  | $ | 39 |  |  | $ | 5 |
2025 |  | $ | 43 |  |  | $ | 5 |
2026 |  | $ | 45 |  |  | $ | 5 |
2027 |  | $ | 47 |  |  | $ | 4 |
2028 |  | $ | 47 |  |  | $ | 4 |
2029 through 2033 |  | $ | 267 |  |  | $ | 18 |
The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at December 31, 2023, and include estimated future employee service. Other Employee Benefit Plans 401(k) Plan - We have a 401(k) Plan covering all employees, and employee contributions are discretionary. We match 100% of employee 401(k) Plan contributions up to 6% of each participant’s eligible compensation each payroll period, subject to certain limits. We also make profit-sharing contributions under our 401(k) Plan for employees who do not participate in our defined benefit pension plans. We generally make a quarterly profit-sharing contribution equal to 1% of each profit-sharing participant’s eligible compensation during the quarter and an annual discretionary profit-sharing contribution equal to a percentage of each profit-sharing participant’s eligible compensation. Our contributions made to the plan, including profit-sharing contributions, were $44 million, $35 million and $33 million in 2023, 2022 and 2021, respectively. The legacy Magellan 401(k) Plan was terminated as a result of the Magellan Acquisition, and legacy Magellan employees were given the option to roll their 401(k) balances into the existing ONEOK 401(k) Plan or to their individual retirement accounts. Nonqualified Deferred Compensation Plan - The 2020 Nonqualified Deferred Compensation Plan and its predecessor nonqualified deferred compensation plans (collectively, the NQDC Plan) provide a select group of management and highly compensated employees, as approved by our chief executive officer, with the option to defer portions of their compensation and receive notional employer contributions that generally are not available due to limitations on employer and employee contributions to qualified defined contribution plans under federal tax laws. Our investments which are included in other assets on the Consolidated Balance Sheets related to the NQDC Plan are not material. These investments are maintained in a rabbi trust. Our contributions to the plan were not material.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//710/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//712/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//715/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent + Details
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