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Long-term Employee Benefits
 12 Months Ended
Dec. 31, 2024
Retirement Benefits, Description [Abstract]  
Long-term Employee Benefits 27. Long-term Employee Benefits

 

Plans Covering Employees in the U.S.

 

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. In 2021, the Company enhanced its previous discretionary retirement savings contribution to provide eligible employees with a guaranteed annual contribution ranging from 1% to 3% for the first $0.1 of base salary based on age and years of service.

 

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 EID plans in those countries. Obligations under such plans are either funded by depositing funds with trustees, covered by insurance contracts, or unfunded.

 

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, 2024, 2023 and 2022.

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Service cost

 

$

(9

)

 

$

(9

)

 

$

(14

)

Interest cost

 

 

(14

)

 

 

(15

)

 

 

(7

)

Expected return on plan assets

 

 

22

 

 

 

20

 

 

 

18

 

Amortization of actuarial loss

 

 

(8

)

 

 

(9

)

 

 

(8

)

Amortization of prior service gain

 

 

2

 

 

 

3

 

 

 

2

 

Curtailment/settlement gain

 

 

1

 

 

 

1

 

 

 

—

 

Total net periodic pension cost

 

$

(6

)

 

$

(9

)

 

$

(9

)

 

 

 

 

 

 

 

 

 

 

Net gain (loss)

 

$

35

 

 

$

(4

)

 

$

(2

)

Prior service benefit

 

 

1

 

 

 

—

 

 

 

2

 

Amortization of actuarial loss

 

 

8

 

 

 

9

 

 

 

8

 

Amortization of prior service gain

 

 

(2

)

 

 

(3

)

 

 

(2

)

Recognition of curtailment/settlement gain

 

 

(1

)

 

 

(1

)

 

 

—

 

Curtailment gain

 

 

2

 

 

 

11

 

 

 

—

 

Effect of foreign exchange rates

 

 

4

 

 

 

(3

)

 

 

7

 

Benefit recognized in other comprehensive income

 

 

47

 

 

 

9

 

 

 

13

 

Total changes in plan assets and benefit obligations
recognized in other comprehensive income

 

$

41

 

 

$

—

 

 

$

4

 

 

During the third quarter of 2023, the Company announced the closure of its manufacturing site in Kuan Yin, Taiwan, which resulted in employment termination of substantially all of the employees based in Kuan Yin, beginning in the fourth quarter of 2023 and expected to be completed by the second quarter of 2024. The employee terminations related to the shutdown meets the definition of a plan curtailment event by eliminating the additional accrual of defined benefits for impacted employees. As a result of the curtailment, the Company remeasured its Taiwan projected pension obligation and recorded a $1 mark-to-market loss on remeasurement of the pension liability as a result of a decrease in discount rates since December 31, 2022, and recorded a reduction in the projected benefit obligation of $11 which was recognized in accumulated other comprehensive income. The $11 curtailment gain, together with the existing $9 of plan net losses in accumulated other comprehensive income, will be amortized to the consolidated statements of operations as the impacted employees are terminated from the plan. For each of the years ended December 31, 2024 and 2023, the Company amortized $1 of net curtailment gain to net periodic pension cost.

 

The following table sets forth the pre-tax amounts recognized in accumulated other comprehensive loss at years ended December 31, 2024, 2023 and 2022.

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

Net loss

 

$

73

 

 

$

123

 

 

$

132

 

Prior service credit

 

 

(5

)

 

 

(7

)

 

 

(9

)

Total amount recognized in accumulated other comprehensive loss

 

$

68

 

 

$

116

 

 

$

123

 

 

The following table sets forth summarized information on the Company’s pension plans at December 31, 2024 and 2023.

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

Change in benefit obligation:

 

 

 

 

 

 

Benefit obligation at beginning of year

 

$

437

 

 

$

407

 

Service cost

 

 

9

 

 

 

9

 

Interest cost

 

 

14

 

 

 

15

 

Plan participants’ contributions

 

 

2

 

 

 

2

 

Actuarial loss (gain)

 

 

(9

)

 

 

26

 

Benefits paid

 

 

(7

)

 

 

(9

)

Plan amendments

 

 

—

 

 

 

—

 

Curtailment

 

 

(2

)

 

 

(11

)

Settlements and transfers

 

 

(28

)

 

 

(17

)

Currency translation

 

 

(28

)

 

 

15

 

Benefit obligation at end of year

 

 

388

 

 

 

437

 

Change in plan assets:

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

 

464

 

 

 

422

 

Actual return on plan assets

 

 

47

 

 

 

41

 

Employer contributions

 

 

12

 

 

 

10

 

Plan participants’ contributions

 

 

2

 

 

 

2

 

Benefits paid

 

 

(7

)

 

 

(9

)

Settlements and transfers

 

 

(28

)

 

 

(17

)

Currency translation

 

 

(28

)

 

 

15

 

Fair value of plan assets at end of year

 

 

462

 

 

 

464

 

Total funded status at end of year

 

$

74

 

 

$

27

 

 

The following table sets forth the net amounts recognized in the Company’s consolidated balance sheets at December 31, 2024 and 2023.

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

Non-current assets

 

$

97

 

 

$

57

 

Current liabilities

 

 

(1

)

 

 

(1

)

Non-current liabilities

 

 

(22

)

 

 

(29

)

Total net amount recognized

 

$

74

 

 

$

27

 

 

The accumulated benefit obligation for all pension plans was $356 and $396 as of December 31, 2024 and 2023, respectively.

 

For the year ended December 31, 2024, the liability component of the Company’s global pension plans generated a net actuarial gain of $9, primarily driven by $11 of gains as a result of lower inflation assumptions and increases in discount rates in most countries. Those gains were partially offset by $2 of losses primarily due to the impact of a lower discount rate applied to the Company's Swiss plan.

The Company’s pension plan assets, in aggregate, generated a gain in accumulated other comprehensive income of $26 as actual returns from equity and bond performance were greater than those projected at the beginning of the year and used to record pension expense.

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, 2024 and 2023.

 

 

 

December 31,

 

Pension plans with projected benefit obligation in excess of plan assets

 

2024

 

 

2023

 

Projected benefit obligation

 

$

75

 

 

$

110

 

Accumulated benefit obligation

 

 

69

 

 

 

102

 

Fair value of plan assets

 

 

52

 

 

 

80

 

 

 

 

December 31,

 

Pension plans with accumulated benefit obligation in excess of plan assets

 

2024

 

 

2023

 

Projected benefit obligation

 

$

75

 

 

$

86

 

Accumulated benefit obligation

 

 

69

 

 

 

79

 

Fair value of plan assets

 

 

52

 

 

 

57

 

 

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, 2024 and 2023.

 

 

 

December 31,

 

Weighted-average assumptions used to determine benefit obligations

 

2024

 

 

2023

 

Discount rate

 

 

3.3

%

 

 

3.3

%

Rate of compensation increase (1)

 

 

3.2

%

 

 

3.4

%

Interest crediting rate (2)

 

 

1.8

%

 

 

2.3

%
(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.
(2)
The interest crediting rate, which is applicable only for account balance type plans, represents the single effective annual account balance increase that an average participant would receive during the participant’s entire career at Chemours.

 

 

December 31,

 

Weighted-average assumptions used to determine net benefit cost

 

2024

 

 

2023

 

Discount rate

 

 

3.3

%

 

 

3.6

%

Rate of compensation increase (1)

 

 

3.4

%

 

 

3.5

%

Expected return on plan assets

 

 

4.9

%

 

 

4.6

%
(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, 2024 and 2023.

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

Cash and cash equivalents

 

 

2

%

 

 

6

%

U.S. and non-U.S. equity securities

 

 

38

%

 

 

36

%

Fixed income securities

 

 

60

%

 

 

58

%

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, 2024 and 2023.

 

 

 

Fair Value Measurements at December 31, 2024

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

Asset category:

 

 

 

 

 

 

 

 

 

Debt - government issued

 

$

69

 

 

$

5

 

 

$

64

 

Debt - corporate issued

 

 

116

 

 

 

4

 

 

 

112

 

U.S. and non-U.S. equities

 

 

175

 

 

 

18

 

 

 

157

 

Derivatives - asset position

 

 

60

 

 

 

—

 

 

 

60

 

Cash and cash equivalents

 

 

9

 

 

 

9

 

 

 

—

 

Other

 

 

2

 

 

 

—

 

 

 

2

 

Total pension assets at fair value

 

 

431

 

 

$

36

 

 

$

395

 

Pooled mortgage funds (1)

 

 

31

 

 

 

 

 

 

 

Total pension assets

 

$

462

 

 

 

 

 

 

 
(1)
Pooled mortgage funds consist of funds that invest in residential mortgages. These funds generally allow for monthly redemption with 30 days' notice. Timing for redemption could be delayed based on the priority of the Company's request and the availability of funds. Interests in these funds are valued using the net asset value ("NAV") per share practical expedient and are not classified in the fair value hierarchy. Pooled real estate funds consist of funds that invest in real estate. These funds generally allow for redemption upon twelve months' notice. Interests in these funds are valued using the net asset value ("NAV") per share practical expedient and are not classified in the fair value hierarchy.

 

 

 

Fair Value Measurements at December 31, 2023

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

Asset category:

 

 

 

 

 

 

 

 

 

Debt - government issued

 

$

63

 

 

$

15

 

 

$

48

 

Debt - corporate issued

 

 

116

 

 

 

23

 

 

 

93

 

U.S. and non-U.S. equities

 

 

168

 

 

 

39

 

 

 

129

 

Derivatives - asset position

 

 

66

 

 

 

—

 

 

 

66

 

Cash and cash equivalents

 

 

28

 

 

 

28

 

 

 

—

 

Other

 

 

2

 

 

 

—

 

 

 

2

 

Total pension assets at fair value

 

 

443

 

 

$

105

 

 

$

338

 

Pooled mortgage funds (1)

 

 

21

 

 

 

 

 

 

 

Total pension assets

 

$

464

 

 

 

 

 

 

 
(1)
Pooled mortgage funds consist of funds that invest in residential mortgages. These funds generally allow for monthly redemption with 30 days' notice. Timing for redemption could be delayed based on the priority of the Company's request and the availability of funds. Interests in these funds are valued using the NAV per share practical expedient and are not classified in the fair value hierarchy.

 

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. With the exception of pooled mortgage funds and pooled real estate funds, pooled funds are valued at the per-unit NAV as determined by the fund manager based on the value of the underlying traded securities.

 

Cash Flows – Defined Benefit Plans

 

Employer Contributions

 

For the years ended December 31, 2024, 2023 and 2022, Chemours contributed $12, $10, and $10, respectively, to its defined benefit plans.

Chemours expects to contribute $6 to its pension plans in 2025. The Company’s future contributions to its defined benefit pension plans are dependent on market-based discount rates.

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.

 

2025

 

$

11

 

2026

 

 

11

 

2027

 

 

12

 

2028

 

 

13

 

2029

 

 

17

 

2030 to 2034

 

 

95

 

 

Cash Flows – Defined Contribution Plan

 

Employer Contributions

 

For the years ended December 31, 2024, 2023 and 2022, Chemours contributed $29, $30, and $31, respectively, to its defined contribution plan.