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Long-term Employee Benefits | 12 Months Ended
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Dec. 31, 2019
General Discussion Of Pension And Other Postretirement Benefits [Abstract] |
Long-term Employee Benefits | Note 27. Long-term Employee Benefits Plans Covering Employees in the U.S. On July 1, 2015, Chemours established a defined contribution plan, which covered all eligible U.S. employees. The purpose of the plan is to encourage employees to save for their future retirement needs. The plan is a tax-qualified contributory profit-sharing plan, with cash or deferred arrangement, and any eligible employee of Chemours may participate. Chemours matches 100% of the first 6% of the employee’s contribution election, and the plan’s matching contributions vest immediately upon contribution. Chemours may also provide an additional discretionary retirement savings contribution to eligible employees’ compensation. The amount of this contribution, if any, is at the sole discretion of the Company, and the discretionary contribution vests for employees with at least three years of service. From time to time, Chemours provides additional discretionary retirement savings contributions to eligible employees’ compensation. In lieu of a defined benefit plan, Chemours provides an enhanced 401(k) contribution for employees who previously participated in DuPont’s pension plan. The enhanced benefits consist of an additional contribution of 1% to 7% of the employee’s eligible compensation, depending upon the employee’s length of service with DuPont at the time of the Separation. The enhancement ended in 2019. Plans Covering Employees Outside the U.S. Pension coverage for employees of Chemours’ non-U.S. subsidiaries is provided, to the extent deemed appropriate, through separate plans established after the Separation and comparable to the DuPont plans in those countries. Obligations under such plans are either funded by depositing funds with trustees, covered by insurance contracts, or unfunded. In the fourth quarter of 2019, the Company, through its wholly-owned subsidiary Chemours Netherlands B.V., completed a settlement transaction related to a significant portion of its Netherlands pension plan. The Company transferred the future risk and administration associated with the $932 of its inactive participants’ vested pension benefits to a third-party asset management company in the Netherlands. The irrevocability of the transaction was contingent upon non-objection by the Dutch National Bank, which was received in October 2019. Following the receipt of non-objection, the responsibility for the associated pension obligation was transferred to the third-party asset management company in December 2019, thereby eliminating the Company’s exposure to the pension liabilities and formally effecting the settlement. At the time of settlement, a remeasurement of plan assets and projected benefit obligations was performed, resulting in a $158 decrease to net pension assets and increase to accumulated other comprehensive loss on the consolidated balance sheet. The cumulative loss associated with the inactive participants’ vested pension benefits was then immediately reclassified from accumulated other comprehensive loss and recognized in earnings, resulting in a charge of $380 recognized in other expense, net in the consolidated statements of operations. At December 31, 2019, the projected benefit obligations associated with the plan’s active employees remained on the Company’s consolidated balance sheet. The following table sets forth the Company’s net periodic pension income and amounts recognized in other comprehensive income (loss) for the years ended December 31, 2019, 2018, and 2017.
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Net periodic pension cost (income): |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 13 |  |  | $ | 14 |  |  | $ | 16 |
Interest cost |  |  | 17 |  |  |  | 16 |  |  |  | 16 |
Expected return on plan assets |  |  | (48 | ) |  |  | (58 | ) |  |  | (75 | )
Amortization of prior service gain |  |  | (2 | ) |  |  | (2 | ) |  |  | (2 | )
Amortization of actuarial loss |  |  | 18 |  |  |  | 12 |  |  |  | 22 |
Settlement loss |  |  | 383 |  |  |  | — |  |  |  | 1 |
Net periodic pension cost (income) |  |  | 381 |  |  |  | (18 | ) |  |  | (22 | )
Changes in plan assets and benefit obligations recognized in other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |
Net loss (gain) |  |  | 144 |  |  |  | 115 |  |  |  | (24 | )
Amortization of actuarial loss |  |  | (18 | ) |  |  | (16 | ) |  |  | (24 | )
Prior service gain |  |  | (5 | ) |  |  | — |  |  |  | — |
Amortization of prior service gain |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
Settlement loss |  |  | (383 | ) |  |  | — |  |  |  | — |
Effect of foreign exchange rates |  |  | (7 | ) |  |  | (8 | ) |  |  | 38 |
(Benefit) cost recognized in other comprehensive income |  |  | (267 | ) |  |  | 93 |  |  |  | (8 | )
Total net periodic pension income and cost (benefit) recognized in other comprehensive income |  | $ | 114 |  |  | $ | 75 |  |  | $ | (30 | )
The following table sets forth the pre-tax amounts recognized in accumulated other comprehensive loss for the years ended December 31, 2019, 2018, and 2017.
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Net loss |  | $ | 151 |  |  | $ | 419 |  |  | $ | 329 |
Prior service credit |  |  | (14 | ) |  |  | (10 | ) |  |  | (11 | )
Total amount recognized in accumulated other comprehensive loss |  | $ | 137 |  |  | $ | 409 |  |  | $ | 318 |
The following table sets forth summarized information on the Company’s pension plans at December 31, 2019 and 2018.
|  | December 31, |
|  | 2019 |  |  | 2018 |
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 1,168 |  |  | $ | 1,177 |
Service cost |  |  | 13 |  |  |  | 14 |
Interest cost |  |  | 17 |  |  |  | 16 |
Plan participants’ contributions |  |  | 2 |  |  |  | 2 |
Actuarial loss |  |  | 313 |  |  |  | 45 |
Benefits paid |  |  | (37 | ) |  |  | (46 | )
Plan amendments |  |  | (5 | ) |  |  | — |
Settlements and transfers |  |  | (945 | ) |  |  | 2 |
Currency translation |  |  | (19 | ) |  |  | (42 | )
Benefit obligation at end of year |  |  | 507 |  |  |  | 1,168 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  |  | 1,268 |  |  |  | 1,363 |
Actual return (loss) on plan assets |  |  | 217 |  |  |  | (17 | )
Employer contributions |  |  | 19 |  |  |  | 15 |
Plan participants’ contributions |  |  | 2 |  |  |  | 2 |
Benefits paid |  |  | (37 | ) |  |  | (46 | )
Settlements and transfers |  |  | (945 | ) |  |  | 2 |
Currency translation |  |  | (24 | ) |  |  | (51 | )
Fair value of plan assets at end of year |  |  | 500 |  |  |  | 1,268 |
Total funded status at end of year |  | $ | (7 | ) |  | $ | 100 |
The following table sets forth the net amounts recognized in the Company’s consolidated balance sheets at December 31, 2019 and 2018.
|  | December 31, |
|  | 2019 |  |  | 2018 |
Non-current assets |  | $ | 59 |  |  | $ | 174 |
Current liabilities |  |  | (2 | ) |  |  | (1 | )
Non-current liabilities |  |  | (64 | ) |  |  | (73 | )
Total net amount recognized |  | $ | (7 | ) |  | $ | 100 |
The accumulated benefit obligation for all pension plans was $445 and $1,106 as of December 31, 2019 and 2018, respectively. The following tables set forth information related to the Company’s pension plans with projected and accumulated benefit obligations in excess of the fair value of plan assets at December 31, 2019 and 2018.
|  | December 31, |
Pension plans with projected benefit obligation in excess of plan assets |  | 2019 |  |  | 2018 |
Projected benefit obligation |  | $ | 178 |  |  | $ | 177 |
Accumulated benefit obligation |  |  | 150 |  |  |  | 149 |
Fair value of plan assets |  |  | 111 |  |  |  | 103 |
|  | December 31, |
Pension plans with accumulated benefit obligation in excess of plan assets |  | 2019 |  |  | 2018 |
Projected benefit obligation |  | $ | 178 |  |  | $ | 177 |
Accumulated benefit obligation |  |  | 150 |  |  |  | 149 |
Fair value of plan assets |  |  | 111 |  |  |  | 103 |
Assumptions The Company generally utilizes discount rates that are developed by matching the expected cash flows of each benefit plan to various yield curves constructed from a portfolio of high-quality, fixed income instruments provided by the plans’ actuaries as of the measurement date. The expected rate of return on plan assets reflects economic assumptions applicable to each country. The following tables set forth the assumptions that have been used to determine the Company’s benefit obligations and net benefit cost at December 31, 2019 and 2018.
|  | December 31, |
Weighted-average assumptions used to determine benefit obligations |  | 2019 |  |  | 2018 |
Discount rate |  |  | 1.4 | % |  |  | 2.0 | %
Rate of compensation increase (1) |  |  | 2.6 | % |  |  | 2.5 | %
| (1) | The rate of compensation increase represents the single annual effective salary increase that an average plan participant would receive during the participant’s entire career at Chemours.
|  | December 31, |
Weighted-average assumptions used to determine net benefit cost |  | 2019 |  |  | 2018 |
Discount rate |  |  | 2.0 | % |  |  | 1.9 | %
Rate of compensation increase (1) |  |  | 2.5 | % |  |  | 2.5 | %
Expected return on plan assets |  |  | 4.1 | % |  |  | 4.1 | %
| (1) | The rate of compensation increase represents the single annual effective salary increase that an average plan participant would receive during the participant’s entire career at Chemours.
Plan Assets Each pension plan’s assets are invested through either an insurance vehicle, a master trust fund, or a stand-alone pension fund. The strategic asset allocation for each plan is selected by management, together with the pension board, where appropriate, reflecting the results of comprehensive asset and liability modeling. For assets under its control, Chemours establishes strategic asset allocation percentage targets and appropriate benchmarks for significant asset classes with the aim of achieving a prudent balance between return and risk. Strategic asset allocations in countries are selected in accordance with the laws and practices of those countries. The following table sets forth the weighted-average allocation for the Company’s pension plan assets at December 31, 2019 and 2018.
|  | December 31, |
|  | 2019 |  |  | 2018 |
Cash and cash equivalents |  |  | 8 | % |  |  | 5 | %
U.S. and non-U.S. equity securities |  |  | 52 | % |  |  | 45 | %
Fixed income securities |  |  | 40 | % |  |  | 50 | %
Total weighted-average allocation |  |  | 100 | % |  |  | 100 | %
Fixed income securities include corporate-issued, government-issued, and asset-backed securities. Corporate debt investments encompass a range of credit risk and industry diversification. Fair value calculations may not be indicative of net realizable value or reflective of future fair values. Furthermore, although Chemours believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following tables set forth the fair values of the Company’s pension assets by level within the fair value hierarchy at December 31, 2019 and 2018.
|  | Fair Value Measurements at December 31, 2019 |
|  | Total |  |  | Level 1 |  |  | Level 2 |
Asset category: |  |  |  |  |  |  |  |  |  |  |  |
Debt - government issued |  | $ | 150 |  |  | $ | 9 |  |  | $ | 141 |
Debt - corporate issued |  |  | 51 |  |  |  | 47 |  |  |  | 4 |
U.S. and non-U.S. equities |  |  | 102 |  |  |  | 101 |  |  |  | 1 |
Mututal funds |  |  | 135 |  |  |  | — |  |  |  | 135 |
Derivatives - asset position |  |  | 28 |  |  |  | — |  |  |  | 28 |
Derivatives - liability position |  |  | — |  |  |  | — |  |  |  | — |
Cash and cash equivalents |  |  | 41 |  |  |  | 41 |  |  |  | — |
Other |  |  | 2 |  |  |  | 2 |  |  |  | — |
Total pension assets before pension receivables |  |  | 509 |  |  | $ | 200 |  |  | $ | 309 |
Pension trust payables, net (1) |  |  | (9 | ) |  |  |  |  |  |  |  |
Total pension assets |  | $ | 500 |  |  |  |  |  |  |  |  |
| (1) | Payables are primarily for investments purchased and received but not yet paid.
|  | Fair Value Measurements at December 31, 2018 |
|  | Total |  |  | Level 1 |  |  | Level 2 |
Asset category: |  |  |  |  |  |  |  |  |  |  |  |
Debt - government issued |  | $ | 487 |  |  | $ | 3 |  |  | $ | 484 |
Debt - corporate issued |  |  | 130 |  |  |  | 33 |  |  |  | 97 |
U.S. and non-U.S. equities |  |  | 264 |  |  |  | 263 |  |  |  | 1 |
Mututal funds |  |  | 296 |  |  |  | — |  |  |  | 296 |
Derivatives - asset position |  |  | 9 |  |  |  | — |  |  |  | 9 |
Derivatives - liability position |  |  | (5 | ) |  |  | — |  |  |  | (5 | )
Cash and cash equivalents |  |  | 67 |  |  |  | 67 |  |  |  | — |
Other |  |  | 12 |  |  |  | 8 |  |  |  | 4 |
Total pension assets before pension receivables |  |  | 1,260 |  |  | $ | 374 |  |  | $ | 886 |
Pension trust receivables, net (1) |  |  | 8 |  |  |  |  |  |  |  |  |
Total pension assets |  | $ | 1,268 |  |  |  |  |  |  |  |  |
| (1) | Receivables are primarily for investment income earned but not yet received.
For pension plan assets classified as Level 1 instruments within the fair value hierarchy, total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. For pension plan assets classified as Level 2 instruments within the fair value hierarchy, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from well-established, recognized vendors of market data and subjected to tolerance and/or quality checks. For derivative assets and liabilities, standard industry models are used to calculate the fair value of the various financial instruments based on significant observable market inputs, such as foreign exchange rates, commodity prices, swap rates, interest rates, and implied volatilities obtained from various market sources. Cash Flows – Defined Benefit Plans Employer Contributions For the years ended December 31, 2019, 2018, and 2017, Chemours contributed $19, $15, and $38, respectively, to its defined benefit plans. Of the contributions made in 2017, $10 relates to the settlement of the U.S. Pension Restoration Plan (“U.S. PRP”), which was a supplemental pension plan for certain U.S. employees. The liability associated with the U.S. PRP was transferred to Chemours from DuPont at the Separation Date, at which point the plan ceased accepting new participants. In October 2017, the Company made a cash payment of $10 to settle the remaining liability attributable to the remaining participants in the U.S. PRP. Chemours expects to contribute $18 to its pension plans in 2020. Future Benefit Payments The following table sets forth the benefit payments that are expected to be paid by the plans over the next five years and the five years thereafter as of December 31, 2019.
|  | Year Ended |
|  | December 31, |
2020 |  | $ | 13 |
2021 |  |  | 9 |
2022 |  |  | 10 |
2023 |  |  | 13 |
2024 |  |  | 15 |
2025 to 2029 |  |  | 87 |
Cash Flows – Defined Contribution Plan Employer Contributions For the years ended December 31, 2019, 2018, and 2017, Chemours contributed $34, $51, and $45, respectively, to its defined contribution plan.

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