XML 37 R24.htm IDEA: XBRL DOCUMENT v3.24.0.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Employee Benefit Plans
Note 15. Employee Benefit Plans
Defined Contribution Plans
We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan. Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations. Defined contribution expense was $18.9 million, $18.7 million and $16.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Defined Benefit Pension Plans
We have defined benefit pension plans for our employees in Europe which provide benefits to employees upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair value hierarchy.
The pension plans assumptions reflect the expected investment return and discount rate on plan assets and disability rate probabilities. The benefit obligation at December 31, 2023 for the plans was determined using a discount rate of 1.30% and rate of compensation increase of 2.25%. The 2023 net periodic benefit cost for the plans was determined using discount rates of 2.20%, rates of compensation increase of 2.25% and long term expected return on plan assets of 5.80%. The benefit obligation at December 31, 2022 for the plans was determined using a discount rate of 2.20% and rate of compensation increase of 2.25%. The 2022 net periodic benefit cost for the plans was determined using discount rates of 0.20%, rates of compensation increase of 2.00% and long term expected return on plan assets of 4.50%.
Summarized information regarding changes in the obligations and plan assets, the funded status and the amounts recorded were as follows (in thousands):
Year Ended December 31,
20232022
Benefit obligation, beginning of year$113,705 $131,966 
Employer service cost7,711 9,855 
Interest cost2,280 251 
Plan participants' contributions4,534 3,649 
Actuarial loss (gain)26,682 (33,783)
Transfer of benefits net of payments from fund1,866 3,295 
Expenses paid from assets(118)(87)
Translation loss (gain)13,007 (1,441)
Benefit obligation, end of year169,667 113,705 
Fair value of plan assets, beginning of year102,023 93,995 
Actual return on plan assets140 (5,257)
Employer contributions9,955 7,617 
Plan participants' contributions4,534 3,649 
Transfer of benefits net of payments from fund1,866 3,295 
Expenses paid from assets(118)(87)
Translation gain (loss)10,082 (1,189)
Fair value of plan assets, end of year128,482 102,023 
Unfunded liability, end of year$41,185 $11,682 
The unfunded liability is reported in other liabilities on the consolidated balance sheets as of December 31, 2023 and 2022. The accumulated benefit obligation is $157.9 million and $105.1 million as of December 31, 2023 and 2022, respectively.
The net periodic benefit cost was as follows (in thousands):
Year Ended December 31,
202320222021
Service cost$7,711 $9,855 $7,977 
Interest cost2,280 251 92 
Expected return on plan assets(5,688)(4,184)(60)
Amortization of prior service cost771 773 217 
Amortization of actuarial losses— 356 1,154 
Net periodic benefit cost$5,074 $7,051 $9,380 
The components of net periodic benefit cost other than the service cost component are included in interest income and other, net on the consolidated statements of operations.
Other changes in the plans assets and the benefit obligation that is recognized in accumulated other comprehensive income (loss) were as follows, net of tax (in thousands):
Year Ended December 31,
202320222021
Pension (asset) liability, beginning of year$(1,699)$23,677 $23,831 
Plan amendment— — 6,017 
Net prior service costs(771)(773)(217)
Net loss (gain)33,394 (24,603)(5,954)
Pension liability (asset), end of year$30,924 $(1,699)$23,677 
We expect to contribute a total of $10.0 million to the pension plans in 2024. The following payments are expected to be paid from the fund (in thousands):
2024$6,632 
20257,586 
20267,103 
20277,964 
20288,463 
2029-203356,005 
Total$93,753