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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2024
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 $20.6 million, $18.9 million and $18.7 million for the years ended December 31, 2024, 2023 and 2022, 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, 2024 for the plans was determined using a discount rate of 0.90% and rate of compensation increase of 2.25%. The 2024 net periodic benefit cost for the plans was determined using discount rates of 1.30%, rates of compensation increase of 2.25% and long term expected return on plan assets of 5.50%. 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%. 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,
| 2024 |  | 2023
Benefit obligation, beginning of year | $ | 169,667 |  |  | $ | 113,705 |
Employer service cost | 12,121 |  |  | 7,711 |
Interest cost | 2,010 |  |  | 2,280 |
Plan participants' contributions | 5,067 |  |  | 4,534 |
Actuarial loss | 17,443 |  |  | 26,682 |
Transfer of benefits net of payments from fund | 1,382 |  |  | 1,866 |
Expenses paid from assets | (101) |  |  | (118) |
Translation (gain) loss | (12,102) |  |  | 13,007 |
Benefit obligation, end of year | 195,487 |  |  | 169,667 |
Fair value of plan assets, beginning of year | 128,482 |  |  | 102,023 |
Actual return on plan assets | 13,562 |  |  | 140 |
Employer contributions | 10,278 |  |  | 9,955 |
Plan participants' contributions | 5,067 |  |  | 4,534 |
Transfer of benefits net of payments from fund | 1,382 |  |  | 1,866 |
Expenses paid from assets | (101) |  |  | (118) |
Translation (loss) gain | (9,034) |  |  | 10,082 |
Fair value of plan assets, end of year | 149,636 |  |  | 128,482 |
Unfunded liability, end of year | $ | 45,851 |  |  | $ | 41,185 |
The unfunded liability is reported in other liabilities on the consolidated balance sheets as of December 31, 2024 and 2023. The accumulated benefit obligation is $182.4 million and $157.9 million as of December 31, 2024 and 2023, respectively. The net periodic benefit cost was as follows (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Service cost | $ | 12,121 |  |  | $ | 7,711 |  |  | $ | 9,855 |
Interest cost | 2,010 |  |  | 2,280 |  |  | 251 |
Expected return on plan assets | (6,764) |  |  | (5,688) |  |  | (4,184) |
Amortization of prior service cost | 801 |  |  | 771 |  |  | 773 |
Amortization of actuarial losses | 673 |  |  | — |  |  | 356 |
Net periodic benefit cost | $ | 8,841 |  |  | $ | 5,074 |  |  | $ | 7,051 |
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 (loss) income were as follows, net of tax (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Pension liability (asset), beginning of year | $ | 30,924 |  |  | $ | (1,699) |  |  | $ | 23,677 |
Net prior service costs | (1,474) |  |  | (771) |  |  | (773) |
Net loss (gain) | $ | 10,473 |  |  | $ | 33,394 |  |  | $ | (24,603) |
Pension liability (asset), end of year | $ | 39,923 |  |  | $ | 30,924 |  |  | $ | (1,699) |
We expect to contribute a total of $10.1 million to the pension plans in 2025. The following payments are expected to be paid from the fund (in thousands):
2025 | $ | 6,956 |
2026 | 7,249 |
2027 | 8,139 |
2028 | 8,617 |
2029 | 11,123 |
2030-2034 | 56,544 |
Total | $ | 98,628 |

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