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Pensions and Post-Employment Benefits
 12 Months Ended
Dec. 31, 2021
Text block [abstract]  
Pensions and Post-Employment Benefits
20)
PENSIONS AND POST-EMPLOYMENT BENEFITS
Defined
 
contribution pension plans
The consolidated costs of defined contribution plans for the years ended December 31, 2021, 2020 and 2019 were $47, $48 and $50, respectively. CEMEX contributes periodically the amounts offered by the pension plan to the employee’s individual accounts, not retaining any remaining liability as of the financial statements’ date.

Defined benefit pension plans
Most of CEMEX’s defined benefit plans have been closed to new participants for several years. Actuarial results related to pension and other post-employment benefits are recognized in earnings and/or in “Other comprehensive income” for the period in which they are generated, as appropriate. For the years ended
 
December 31, 2021, 2020 and 2019, the effects of pension plans and other post-employment benefits are summarized as follows:

 
 
  
Pensions
 
 
Other benefits
 
  
Total
 
Net period cost (income):
  
2021
 
 
2020
 
 
2019
 
 
2021
 
 
2020
 
 
2019
 
  
2021
 
 
2020
 
 
2019
 
Recorded in operating costs and expenses
  
      
 
      
 
      
 
      
 
      
 
      
  
      
 
      
 
      
Service cost
  
$
9
 
 
 
10
 
 
 
10
 
 
 
3
 
 
 
2
 
 
 
2
 
  
 
12
 
 
 
12
 
 
 
12
 
Past service cost
  
 
—  
 
 
 
(2
) 
 
 
1
 
 
 
—  
 
 
 
1
 
 
 
—  
 
  
 
—  
 
 
 
(1
) 
 
 
1
 
Settlements and curtailments
  
 
(1
) 
 
 
—  
 
 
 
(3
) 
 
 
(1
) 
 
 
(1
) 
 
 
—  
 
  
 
(2
) 
 
 
(1
) 
 
 
(3
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
  
 
8
 
 
 
8
 
 
 
8
 
 
 
2
 
 
 
2
 
 
 
2
 
  
 
10
 
 
 
10
 
 
 
10
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Recorded in other financial expenses
  
      
 
      
 
      
 
      
 
      
 
      
  
      
 
      
 
      
Net interest cost
  
 
26
 
 
 
28
 
 
 
34
 
 
 
5
 
 
 
5
 
 
 
5
 
  
 
31
 
 
 
33
 
 
 
39
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
Recorded in other comprehensive income
  
      
 
      
 
      
 
      
 
      
 
      
  
      
 
      
 
      
Actuarial (gains) losses for the period
  
 
(257
) 
 
 
181
 
 
 
203
 
 
 
(6
) 
 
 
18
 
 
 
7
 
  
 
(263
) 
 
 
199
 
 
 
210
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
  
$
(223
) 
 
 
217
 
 
 
245
 
 
 
1
 
 
 
25
 
 
 
14
 
  
 
(222
) 
 
 
242
 
 
 
259
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
As
of December 31, 2021 and 2020, the reconciliation of the actuarial benefits’ obligations and pension plan assets, are presented as follows
:

 
  
Pensions
 
 
Other benefits
 
 
Total
 
 
  
2021
 
 
2020
 
 
2021
 
 
2020
 
 
2021
 
 
2020
 
Change in benefits obligation:
  
      
 
      
 
      
 
      
 
      
 
      
Projected benefit obligation at beginning of the period
  
$
2,928
 
 
 
2,651
 
 
 
105
 
 
 
87
 
 
 
3,033
 
 
 
2,738
 
Service cost
  
 
9
 
 
 
10
 
 
 
3
 
 
 
2
 
 
 
12
 
 
 
12
 
Interest cost
  
 
62
 
 
 
70
 
 
 
5
 
 
 
5
 
 
 
67
 
 
 
75
 
Actuarial (gains) losses
  
 
(134
) 
 
 
258
 
 
 
(6
) 
 
 
18
 
 
 
(140
) 
 
 
276
 
Additions through business combinations
  
 
—  
 
 
 
1
 
 
 
—  
 
 
 
—  
 
 
 
—  
 
 
 
1
 
Settlements and curtailments
  
 
(1
) 
 
 
—  
 
 
 
(1
) 
 
 
(1
) 
 
 
(2
) 
 
 
(1
) 
Plan amendments
  
 
—  
 
 
 
(2
) 
 
 
—  
 
 
 
1
 
 
 
—  
 
 
 
(1
) 
Benefits paid
  
 
(132
) 
 
 
(140
) 
 
 
(7
) 
 
 
(6
) 
 
 
(139
) 
 
 
(146
) 
Foreign currency translation
  
 
(47
) 
 
 
80
 
 
 
(1
) 
 
 
(1
) 
 
 
(48
) 
 
 
79
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Projected benefit obligation at end of the period
  
 
2,685
 
 
 
2,928
 
 
 
98
 
 
 
105
 
 
 
2,783
 
 
 
3,033
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in plan assets:
  
      
 
      
 
      
 
      
 
      
 
      
Fair value of plan assets at beginning of the period
  
 
1,693
 
 
 
1,599
 
 
 
1
 
 
 
1
 
 
 
1,694
 
 
 
1,600
 
Return on plan assets
  
 
36
 
 
 
42
 
 
 
—  
 
 
 
—  
 
 
 
36
 
 
 
42
 
Actuarial gains
  
 
123
 
 
 
77
 
 
 
—  
 
 
 
—  
 
 
 
123
 
 
 
77
 
Employer contributions
  
 
78
 
 
 
75
 
 
 
7
 
 
 
6
 
 
 
85
 
 
 
81
 
Benefits paid
  
 
(132
) 
 
 
(140
) 
 
 
(7
) 
 
 
(6
) 
 
 
(139
) 
 
 
(146
) 
Foreign currency translation
  
 
(15
) 
 
 
40
 
 
 
—  
 
 
 
—  
 
 
 
(15
) 
 
 
40
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets at end of the period
  
 
1,783
 
 
 
1,693
 
 
 
1
 
 
 
1
 
 
 
1,784
 
 
 
1,694
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net projected liability in the statement of financial position
  
$
902
 
 
 
1,235
 
 
 
97
 
 
 
104
 
 
 
999
 
 
 
1,339
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the years
2021
,
2020
and
2019
, actuarial (gains) losses for the period were generated by the following main factors as follows:

 
 
  
2021
 
 
2020
 
  
2019
 
Actuarial (gains) losses due to experience
    $ (87 )      1        5  
Actuarial (gains) losses due to demographic assumptions
      20       18        (11 ) 
Actuarial (gains) losses due financial assumptions
      (196 )      180        216  
      
 
    
 
 
     
 
 
  
     $ (263 )      199        210  
      
 
    
 
 
     
 
 
  
In
 
2021
, net actuarial gains due to financial assumptions were mainly driven by moderate increases in the discount rates applicable to the calculation of the benefits’ obligations in the United Kingdom, the United States, Germany and Mexico, as market interest rates increased in
2021
as compared to
2020
. In addition, there were significant reduction effects in the net projected liability related to adjustments due to experience in the United Kingdom, the United States and Germany for a combined amount of $
81
. Moreover, the net projected liability significantly decreased by actual returns in plan assets higher than estimated returns for a total of $
122
, of which $
86
refers to the United Kingdom, $
13
to the United States and $
23
to other countries, partially offset by actuarial losses due to demographic assumption of $
20
, of which $
12
refers to the United Kingdom.
 
In
 
2020
, net actuarial losses due to financial assumptions were mainly driven by a general decrease in the discount rates applicable to the calculation of the benefits’ obligations mainly in the United Kingdom, the United States, and Mexico, as market interest rates decrease globally in
2020
as compared to
2019
, partially offset by actual returns in plan assets higher than estimated in the United Kingdom and the United States. In addition, the United Kingdom Government confirmed on November 
25
,
2020
, with effect from February
2030
onwards, Retail Prices Index (“RPI”) will be aligned with Consumer Prices Index (“CPI”). The RPI is used to set pension increase assumptions for the United Kingdom pension plans. As a result of this change, in
2020
, CEMEX had an increase in its United Kingdom pension liabilities of $
54
. In
2019
, such net actuarial losses were also mainly driven by a general decrease in the discount rates applicable to the calculation of the benefits’ obligations mainly in the United Kingdom, the United States, Germany and Mexico, as market interest rates decrease globally in
2019
as compared to
2018
, partially offset by actual returns in plan assets higher than estimated in the United Kingdom and the United States.
As of December 31, 2021 and 2020, based on the hierarchy of fair values, plan assets are detailed as follows:

 
  
2021
 
  
2020
 
 
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
Cash
    $ 33        —          —          33      $ 44        —          —          44  
Investments in corporate bonds
      1        432        —          433        1        474        —          475  
Investments in government bonds
      85        393        —          478        86        371        —          457  
      
 
     
 
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
     
 
 
  
Total fixed-income securities
      119        825        —          944        131        845        —          976  
      
 
     
 
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
     
 
 
  
Investment in marketable securities
      380        109        —          489        341        89        —          430  
Other investments and private funds
      163        88        100        351        146        55        87        288  
      
 
     
 
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
     
 
 
  
Total variable-income securities
      543        197        100        840        487        144        87        718  
      
 
     
 
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
     
 
 
  
Total plan assets
    $ 662        1,022        100        1,784      $ 618        989        87        1,694  
      
 
     
 
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
     
 
 
  
 
The most significant assumptions used in the determination of the benefit obligation were as follows:
 
 
 
2021
 
 
2020
 
 
 
Mexico
 
 
United
States
 
 
United
Kingdom
 
 
Range of rates in
other countries
 
 
Mexico
 
 
United
States
 
 
United
Kingdom
 
 
Rates ranges in
other countries
 
Discount rates
     9.25 %     2.90 %      1.90 %      0.4% – 9.3%       7.80 %      2.60 %      1.50 %      0.2% – 9.0%  
Rate of return on plan assets
     9.25 %      2.90 %      1.90 %      0.4% – 9.3%       7.80 %      2.60 %      1.50 %      0.2% – 9.0%  
Rate of salary increases
     4.50 %      —         3.35 %      2.3% – 7.3%       4.50 %      —         3.00 %      2.3% – 6.8%  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As
 
of December 31, 2021, estimated payments for pensions and other post-employment benefits over the next 10 years were as follows:
 
  
Estimated
payments
 
2022
    $ 155  
2023
      139  
2024
      140  
2025
      142  
2026
–
2031
      850  
      
 
  
As of December 31, 2021 and
2020
, the aggregate projected benefit obligation (“PBO”) for pension plans and other post-employment benefits and the plan assets by country were as follows:

 
 
 
  
2021
 
  
2020
 
 
  
PBO
 
  
Assets
 
  
Deficit
 
  
PBO
 
  
Assets
 
  
Deficit
 
Mexico
    $ 200        38        162      $ 216        29        187  
United States
      270        226        44        305        222        83  
United Kingdom
1
      1,794        1,273        521        1,925        1,214        711  
Germany
      180        7        173        219        8        211  
Other countries
      339        240        99        368        221        147  
      
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
  
     $ 2,783        1,784        999      $ 3,033        1,694        1,339  
      
 
     
 
 
     
 
 
       
 
     
 
 
     
 
 
  
 
1
Applicable regulation in the United Kingdom requires to maintain plan assets at a level similar to that of the obligations. Beginning in 2012, the pension fund started to receive annual dividends from a limited partnership (the “Partnership”), whose assets, transferred by CEMEX UK of an approximate value of $553, are leased back to CEMEX UK. The Partnership is owned, controlled and consolidated by CEMEX UK. The annual dividends received by the pension funds in 2021, 2020 and 2019, which increase at a 5% rate per year, were £22.3 ($30), £21.3 ($29) and £20.3 ($27), respectively. In 2037, on expiry of the arrangement, the Partnership will be terminated and under the terms of the agreement, the remaining assets will be distributed to CEMEX UK. Distributions from the Partnership to the pension fund are considered as employer contributions to plan assets in the period in which they occur.
In
 
some countries, CEMEX has established health care benefits for retired personnel limited to a certain number of years after retirement. As of December 31, 2021 and
2020
, the projected benefits obligation related to these benefits was $
69
and $
78
, respectively, included within other benefits liability. The medical inflation rates used to determine the projected benefits obligation of these benefits in 2021 and 2020 for Mexico were
7
% and
8
% respectively, for Puerto Rico
3.8
% and
6.4
%, respectively, for the United Kingdom were
6.9
% in both years and for TCL was a rate range between
5.0
% and
10.5
%, for both years.
Significant events of settlements or curtailments related to employees’ pension benefits and other post-employment benefits during the reported periods
In
 
2021, as an effect of a sale of assets in France (note 5.2), there was a curtailment gain of $1 in its pension plan recognized in the statement of operations for the period. In addition, one of the participating companies in other
 
postretirement benefits of TCL ceased operations in February 2021, resulting in a curtailment gain in other postretirement benefits of $
1
reflected in the statement of operations for the period.
During 2020, in connection with the divestiture of Kosmos’ assets in the United States (note 5.1), CEMEX recognized a curtailment gain of $1 related to its medical plan. Moreover, in France, CEMEX changed certain formulas of the pension benefits resulting in a past service gain of $2. In addition, in Mexico, CEMEX changed some postretirement benefits resulting in an expense for past services of $1 in 2020. These effects were recognized in the income statement for the year.
During 2019, CEMEX in France closed two legal entities resulting in a curtailment gain of $3, which was recognized in the income statement for the period.
Sensitivity analysis of pension and other post-employment benefits
For the year ended December 31, 2021, CEMEX performed sensitivity analyses on the most significant assumptions that affect the PBO, considering reasonable independent changes of plus or minus 50 basis points in each of these assumptions. The increase (decrease) that would have resulted in the PBO of pensions and other post-employment benefits as of December 31, 2021 are shown below:

 
 
  
Pensions
 
 
Other benefits
 
 
Total
 
Assumptions:
  
+50 bps
 
 
-50 bps
 
 
+50 bps
 
 
-50 bps
 
 
+50 bps
 
 
-50 bps
 
Discount Rate Sensitivity
    $ (178 )      200       (5 )      5       (183 )      205  
Salary Increase Rate Sensitivity
      6       (5 )      1       (1 )      7       (6 ) 
Pension Increase Rate Sensitivity
      124       (121 )      —         —         124       (121 ) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multiemployer defined benefit pension plans
In addition to the Company’s sponsored plans, certain union employees in the United States and the United Kingdom are covered under multiemployer defined benefit plans administered by their unions. The Company’s funding arrangements, rate of contributions and funding requirements were made in accordance with the contractual multiemployer agreements. The combined amounts contributed to the multiemployer plans were $58 in 2021, $56 in 2020 and $64 in 2019. The Company expects to contribute $59 to the multiemployer plans in
2022.

In
 
addition to the funding described in the preceding paragraph, CEMEX negotiated with a union managing a multiemployer plan in the United States the change of the plan from defined benefit to defined contribution beginning on September 29,
2019
. This change generated a
one-time
settlement obligation of $
24
recognized in the income statement in 2019 as part of “Other expenses, net,” against an accrued liability. Payments are expected to be made over the next
20
years though lump sum payment is allowable.