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PENSION PLANS | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
PENSION PLANS | NOTE 13. PENSION PLANS We sponsor domestic and foreign defined benefit pension plans for eligible employees and retirees. Most of our domestic employees participate in defined contribution plans. However, a portion of our bargaining hourly employees continue to participate in our domestic qualified defined benefit pension plans under a flat-benefit formula. Our funding policy for the qualified defined benefit pension plans is consistent with the requirements of federal laws and regulations. Our foreign subsidiaries maintain pension and other benefit plans, which are consistent with local statutory practices. Our domestic qualified defined benefit pension plan provides that if, within three years following a change of control of Olin, any corporate action is taken or filing made in contemplation of, among other things, a plan termination or merger or other transfer of assets or liabilities of the plan, and such termination, merger or transfer thereafter takes place, plan benefits would automatically be increased for affected participants (and retired participants) to absorb any plan surplus (subject to applicable collective bargaining requirements). Based on our plan assumptions and estimates, we will not be required to make any cash contributions to the domestic qualified defined benefit pension plan at least through 2024. We have international qualified defined benefit pension plans to which we made cash contributions of $1.0 million, $1.3 million and $1.1 million in 2023, 2022 and 2021, respectively, and we anticipate less than $5 million of cash contributions to international qualified defined benefit pension plans in 2024. Pension Obligations and Funded Status Changes in the benefit obligation and plan assets were as follows:
| December 31, 2023 |  | December 31, 2022
| U.S. |  | Foreign |  | Total |  | U.S. |  | Foreign |  | Total
Change in Benefit Obligation | ($ in millions)
Benefit obligation - beginning of year | $ | 1,868.4 |  |  | $ | 251.1 |  |  | $ | 2,119.5 |  |  | $ | 2,506.0 |  |  | $ | 382.3 |  |  | $ | 2,888.3 |
Service cost | 0.3 |  |  | 5.4 |  |  | 5.7 |  |  | 0.5 |  |  | 7.9 |  |  | 8.4 |
Interest cost | 96.3 |  |  | 9.1 |  |  | 105.4 |  |  | 57.3 |  |  | 4.1 |  |  | 61.4 |
Actuarial loss (gain) | 47.1 |  |  | 14.9 |  |  | 62.0 |  |  | (556.1) |  |  | (113.7) |  |  | (669.8) |
Benefits paid | (141.0) |  |  | (5.9) |  |  | (146.9) |  |  | (139.3) |  |  | (6.1) |  |  | (145.4) |
Plan participant’s contributions | — |  |  | 0.2 |  |  | 0.2 |  |  | — |  |  | 0.3 |  |  | 0.3 |
Settlements | — |  |  | (7.5) |  |  | (7.5) |  |  | — |  |  | — |  |  | — |
Foreign currency translation adjustments | — |  |  | 9.8 |  |  | 9.8 |  |  | — |  |  | (23.7) |  |  | (23.7) |
Benefit obligation - end of year | $ | 1,871.1 |  |  | $ | 277.1 |  |  | $ | 2,148.2 |  |  | $ | 1,868.4 |  |  | $ | 251.1 |  |  | $ | 2,119.5 |
| December 31, 2023 |  | December 31, 2022
| U.S. |  | Foreign |  | Total |  | U.S. |  | Foreign |  | Total
Change in Plan Assets | ($ in millions)
Fair value of plan assets - beginning of year | $ | 1,824.9 |  |  | $ | 63.3 |  |  | $ | 1,888.2 |  |  | $ | 2,429.6 |  |  | $ | 76.1 |  |  | $ | 2,505.7 |
Actual return on plans’ assets | 173.1 |  |  | 4.0 |  |  | 177.1 |  |  | (465.6) |  |  | (7.6) |  |  | (473.2) |
Employer contributions | 0.2 |  |  | 1.0 |  |  | 1.2 |  |  | 0.2 |  |  | 1.4 |  |  | 1.6 |
Benefits paid | (141.0) |  |  | (2.8) |  |  | (143.8) |  |  | (139.3) |  |  | (3.1) |  |  | (142.4) |
Settlements | — |  |  | (7.1) |  |  | (7.1) |  |  | — |  |  | — |  |  | — |
Foreign currency translation adjustments | — |  |  | 2.4 |  |  | 2.4 |  |  | — |  |  | (3.5) |  |  | (3.5) |
Fair value of plan assets - end of year | $ | 1,857.2 |  |  | $ | 60.8 |  |  | $ | 1,918.0 |  |  | $ | 1,824.9 |  |  | $ | 63.3 |  |  | $ | 1,888.2 |
| December 31, 2023 |  | December 31, 2022
| U.S. |  | Foreign |  | Total |  | U.S. |  | Foreign |  | Total
Funded Status | ($ in millions)
Qualified plans | $ | (11.9) |  |  | $ | (214.6) |  |  | $ | (226.5) |  |  | $ | (41.4) |  |  | $ | (185.7) |  |  | $ | (227.1) |
Non-qualified plans | (2.0) |  |  | (1.7) |  |  | (3.7) |  |  | (2.1) |  |  | (2.1) |  |  | (4.2) |
Total funded status | $ | (13.9) |  |  | $ | (216.3) |  |  | $ | (230.2) |  |  | $ | (43.5) |  |  | $ | (187.8) |  |  | $ | (231.3) |
We recorded a $11.9 million after-tax charge ($16.4 million pretax) to shareholders’ equity as of December 31, 2023, for our pension plans. This charge primarily reflected a 30-basis point decrease in the domestic pension plans’ discount rate and a 50-basis point decrease in the international defined benefit pension plans’ discount rate, partially offset by a favorable performance on plan assets during 2023. In 2022, we recorded a $37.2 million after-tax benefit ($59.9 million pretax) to shareholders’ equity as of December 31, 2022, for our pension plans. This benefit primarily reflected a 260-basis point increase in the domestic pension plans’ discount rate and a 230-basis point increase in the international defined benefit pension plans’ discount rate, partially offset by unfavorable performance on plan assets during 2022. The $62.0 million actuarial loss for 2023 was primarily due to a 30-basis point decrease in the domestic pension plans’ discount rate and a 50-basis point decrease in the international defined benefit pension plans’ discount rate. The $669.8 million actuarial gain for 2022 was primarily due to a 260-basis point increase in the domestic pension plans’ discount rate and a 230-basis point increase in the international defined benefit pension plans’ discount rate. Amounts recognized in the consolidated balance sheets consisted of:
| December 31, 2023 |  | December 31, 2022
| U.S. |  | Foreign |  | Total |  | U.S. |  | Foreign |  | Total
| ($ in millions)
Prepaid benefit cost in noncurrent assets | $ | — |  |  | $ | 1.8 |  |  | $ | 1.8 |  |  | $ | — |  |  | $ | 3.9 |  |  | $ | 3.9 |
Accrued benefit in current liabilities | (0.6) |  |  | (5.6) |  |  | (6.2) |  |  | (0.5) |  |  | (0.2) |  |  | (0.7) |
Accrued benefit in noncurrent liabilities | (13.3) |  |  | (212.5) |  |  | (225.8) |  |  | (43.0) |  |  | (191.5) |  |  | (234.5) |
Accumulated other comprehensive loss | 558.3 |  |  | (5.4) |  |  | 552.9 |  |  | 558.1 |  |  | (21.4) |  |  | 536.7 |
Net balance sheet impact | $ | 544.4 |  |  | $ | (221.7) |  |  | $ | 322.7 |  |  | $ | 514.6 |  |  | $ | (209.2) |  |  | $ | 305.4 |
At December 31, 2023 and 2022, the benefit obligation of non-qualified pension plans was $3.7 million and $4.2 million, respectively, and was included in the above pension benefit obligation. There were no plan assets for these non-qualified pension plans. At December 31, 2023, future benefit payments for qualified and non-qualified plans were as follows:
| Non-qualified Plans |  | Qualified Plans
Expected Benefit Payments | ($ in millions)
2024 | $ | 0.6 |  |  | $ | 152.2 |
2025 | 0.4 |  |  | 143.6 |
2026 | 0.4 |  |  | 137.8 |
2027 | 0.3 |  |  | 132.3 |
2028 | 0.2 |  |  | 126.0 |
| December 31,
| 2023 |  | 2022
| ($ in millions)
Projected benefit obligation | $ | 2,148.2 |  |  | $ | 2,119.5 |
Accumulated benefit obligation | 2,131.7 |  |  | 2,107.5 |
Fair value of plans’ assets | 1,918.0 |  |  | 1,888.2 |
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Components of Net Periodic Benefit Income | ($ in millions)
Service cost | $ | 5.7 |  |  | $ | 8.4 |  |  | $ | 11.4 |
Interest cost | 105.4 |  |  | 61.4 |  |  | 51.3 |
Expected return on plans’ assets | (131.4) |  |  | (136.7) |  |  | (142.3) |
Amortization of prior service cost | (0.4) |  |  | (0.7) |  |  | (0.6) |
Recognized actuarial loss | — |  |  | 34.6 |  |  | 52.7 |
Net periodic benefit income | $ | (20.7) |  |  | $ | (33.0) |  |  | $ | (27.5) |
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Included in Pretax Other Comprehensive Income (Loss) | ($ in millions)
Liability adjustment | $ | 16.4 |  |  | $ | (59.9) |  |  | $ | (245.9) |
Amortization of prior service costs and actuarial losses | 0.4 |  |  | (33.9) |  |  | (52.1) |
The service cost component of net periodic benefit (income) cost related to the employees of the operating segments are allocated to the operating segments based on their respective estimated census data. Pension Plan Assumptions Certain actuarial assumptions, such as discount rate and long-term rate of return on plan assets, have a significant effect on the amounts reported for net periodic benefit cost and accrued benefit obligation amounts. We use a measurement date of December 31 for our pension plans.
| U.S. Pension Benefits |  | Foreign Pension Benefits
Weighted-average Assumptions | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Discount rate—periodic benefit cost | 5.50 | % | (1) | 2.90 | % |  | 2.40 | % |  | 3.70 | % |  | 1.40 | % |  | 0.80 | %
Expected return on plans’ assets | 6.75 | % |  | 6.75 | % |  | 7.25 | % |  | 4.40 | % |  | 3.80 | % |  | 4.20 | %
Rate of compensation increase | 3.00 | % |  | 3.00 | % |  | 3.00 | % |  | 3.40 | % |  | 3.00 | % |  | 3.00 | %
Discount rate—benefit obligation | 5.20 | % |  | 5.50 | % |  | 2.90 | % |  | 3.20 | % |  | 3.70 | % |  | 1.40 | %
(1) The discount rate—periodic benefit cost for our domestic qualified pension plan is comprised of the discount rate used to determine interest costs of 5.3% and the discount rate used to determine service costs of 5.5%. The discount rate is based on a hypothetical yield curve represented by a series of annualized individual zero-coupon bond spot rates for maturities ranging from one-half to thirty years. The bonds used in the yield curve must have a rating of AA or better per Standard & Poor’s, be non-callable, and have at least $250 million par outstanding. The yield curve is then applied to the projected benefit payments from the plan. Based on these bonds and the projected benefit payment streams, the single rate that produces the same yield as the matching bond portfolio is used as the discount rate. The long-term expected rate of return on plan assets represents an estimate of the long-term rate of returns on the investment portfolio consisting of equities, fixed income and alternative investments. We use long-term historical actual return information, the allocation mix of investments that comprise plan assets and forecast estimates of long-term investment returns, including inflation rates, by reference to external sources. The historical rates of return on plan assets have been 6.7% for the last 5 years, 6.7% for the last 10 years and 7.8% for the last 15 years. The following rates of return by asset class were considered in setting the long-term rate of return assumption:
Asset Class | Rate of Return
U.S. equities | 7% |  | to |  | 11%
Non-U.S. equities | 8% |  | to |  | 12%
Fixed income/cash | 3% |  | to |  | 7%
Alternative investments | 5% |  | to |  | 15%
Plan Assets Our pension plan asset allocations at December 31, 2023 and 2022 by asset class were as follows:
| Percentage of Plan Assets
Asset Class | 2023 |  | 2022
U.S. equities | 3 | % |  | 4 | %
Non-U.S. equities | 4 | % |  | 11 | %
Fixed income/cash | 50 | % |  | 38 | %
Alternative investments | 43 | % |  | 47 | %
The Alternative Investments asset class includes hedge funds, real estate and private equity investments. The Alternative Investments class is intended to help diversify risk and increase returns by utilizing a broader group of assets. A master trust was established by our pension plan to accumulate funds required to meet benefit payments of our plan and is administered solely in the interest of our plan’s participants and their beneficiaries. The master trust’s investment horizon is long term. Its assets are managed by professional investment managers or invested in professionally managed investment vehicles. Our pension plan maintains a portfolio of assets designed to achieve an appropriate risk adjusted return. The portfolio of assets is also structured to manage risk by diversifying assets across asset classes whose return patterns are not highly correlated, investing in passively and actively managed strategies and in value and growth styles, and by periodic rebalancing of asset classes, strategies and investment styles to objectively set targets. As of December 31, 2023, the following target allocation and ranges have been set for each asset class:
Asset Class | Target Allocation |  | Target Range
U.S. equities(1) | 15 | % |  | 5-25
Non-U.S. equities(1) | 10 | % |  | 0-30
Fixed income/cash(1) | 75 | % |  | 30-95
Alternative investments | — | % |  | 0-30
(1) The target allocation for these asset classes includes alternative investments, primarily hedge funds, based on the underlying investments in each hedge fund. Determining which hierarchical level an asset or liability falls within requires significant judgment. The following table summarizes our domestic and foreign defined benefit pension plans assets measured at fair value as of December 31, 2023:
Asset Class | Investments Measured at Net Asset Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Equity Securities | ($ in millions)
U.S. equities | $ | 12.2 |  |  | $ | 36.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 48.8 |
Non-U.S. equities | 85.4 |  |  | 0.1 |  |  | 0.5 |  |  | — |  |  | 86.0 |
Fixed Income/Cash |  |  |  |  |  |  |  |  |
Cash | — |  |  | 227.7 |  |  | — |  |  | — |  |  | 227.7 |
Government treasuries | — |  |  | — |  |  | 244.9 |  |  | — |  |  | 244.9 |
Corporate debt instruments | 286.3 |  |  | — |  |  | 0.5 |  |  | — |  |  | 286.8 |
Asset-backed securities | 192.7 |  |  | — |  |  | 14.8 |  |  | — |  |  | 207.5 |
Alternative Investments |  |  |  |  |  |  |  |  |
Hedge fund of funds | 599.5 |  |  | — |  |  | — |  |  | — |  |  | 599.5 |
Real estate funds | 20.1 |  |  | — |  |  | — |  |  | — |  |  | 20.1 |
Private equity funds | 196.7 |  |  | — |  |  | — |  |  | — |  |  | 196.7 |
Total assets | $ | 1,392.9 |  |  | $ | 264.4 |  |  | $ | 260.7 |  |  | $ | — |  |  | $ | 1,918.0 |
The following table summarizes our domestic and foreign defined benefit pension plans assets measured at fair value as of December 31, 2022:
Asset Class | Investments Measured at Net Asset Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Equity Securities | ($ in millions)
U.S. equities | $ | 19.2 |  |  | $ | 54.4 |  |  | $ | — |  |  | $ | — |  |  | $ | 73.6 |
Non-U.S. equities | 206.4 |  |  | 0.2 |  |  | 0.1 |  |  | — |  |  | 206.7 |
Fixed Income/Cash |  |  |  |  |  |  |  |  |
Cash | — |  |  | 102.2 |  |  | — |  |  | — |  |  | 102.2 |
Government treasuries | — |  |  | — |  |  | 171.2 |  |  | — |  |  | 171.2 |
Corporate debt instruments | 345.2 |  |  | — |  |  | 0.5 |  |  | — |  |  | 345.7 |
Asset-backed securities | 90.1 |  |  | — |  |  | 19.0 |  |  | — |  |  | 109.1 |
Alternative Investments |  |  |  |  |  |  |  |  |
Hedge fund of funds | 685.1 |  |  | — |  |  | — |  |  | — |  |  | 685.1 |
Real estate funds | 25.2 |  |  | — |  |  | — |  |  | — |  |  | 25.2 |
Private equity funds | 169.4 |  |  | — |  |  | — |  |  | — |  |  | 169.4 |
Total assets | $ | 1,540.6 |  |  | $ | 156.8 |  |  | $ | 190.8 |  |  | $ | — |  |  | $ | 1,888.2 |
U.S. equities—This class included actively and passively managed equity investments in common stock and commingled funds comprised primarily of large-capitalization stocks with value, core and growth strategies. Non-U.S. equities—This class included actively managed equity investments in commingled funds comprised primarily of international large-capitalization stocks from both developed and emerging markets. Fixed income and cash—This class included commingled funds comprised of debt instruments issued by the U.S. and Canadian Treasuries, U.S. Agencies, corporate debt instruments, asset- and mortgage-backed securities and cash. Hedge fund of funds—This class included a hedge fund which invests in the following types of hedge funds: Event driven hedge funds—This class included hedge funds that invest in securities to capture excess returns that are driven by market or specific company events including activist investment philosophies and the arbitrage of equity and private and public debt securities. Market neutral hedge funds—This class included investments in U.S. and international equities and fixed income securities while maintaining a market neutral position in those markets. Other hedge funds—This class primarily included long-short equity strategies and a global macro fund which invested in fixed income, equity, currency, commodity and related derivative markets. Real estate funds—This class included several funds that invest primarily in U.S. commercial real estate. Private equity funds—This class included several private equity funds that invest primarily in infrastructure and U.S. power generation and transmission assets. U.S. equities and non-U.S. equities are primarily valued at the net asset value provided by the independent administrator or custodian of the commingled fund. The net asset value is based on the value of the underlying equities, which are traded on an active market. U.S. equities are also valued at the closing price reported in an active market on which the individual securities are traded. A portion of our fixed income investments are valued at the net asset value provided by the independent administrator or custodian of the fund. The net asset value is based on the underlying assets, which are valued using inputs such as the closing price reported, if traded on an active market, values derived from comparable securities of issuers with similar credit ratings, or under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for risks that may not be observable such as certain credit and liquidity risks. Alternative investments are valued at the net asset value as determined by the independent administrator or custodian of the fund. The net asset value is based on the underlying investments, which are valued using inputs such as quoted market prices of identical instruments, discounted future cash flows, independent appraisals and market-based comparable data.

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