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Employee Benefits | 9 Months Ended
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Sep. 30, 2023
Retirement Benefits [Abstract] |
Employee Benefits | 3. Employee Benefits Deferred Compensation Plan Assets of our deferred compensation plan are included in Other assets, classified within Level 1 of the fair value hierarchy and are measured and recorded at fair value based on their quoted market prices. The fair value of these assets at September 30, 2023 and December 31, 2022 was $10.6 million and $9.8 million, respectively. The assets in the trust are held in various investment funds at certain registered investment companies and are accounted for as equity investments with changes in fair value recorded within Other (expense) income, net (see Note 9). Offsetting liabilities relating to the deferred compensation plan are included in Other accrued liabilities and Long-term liabilities. Short-Term Incentive Plans (“STI Plans”) As of September 30, 2023, we had a liability of $9.4 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments under the 2023 STI Plan. Postretirement Benefit Plans The following table presents the total expense (benefit) related to all postretirement benefit plans (in millions of dollars):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Defined contribution plans 1 |  | $ | 4.3 |  |  | $ | 3.9 |  |  | $ | 14.4 |  |  | $ | 13.6 |
Deferred compensation plan 2 |  |  | — |  |  |  | (0.1 | ) |  |  | 0.6 |  |  |  | (0.9 | )
Multiemployer pension plans 1 |  |  | 1.4 |  |  |  | 1.3 |  |  |  | 4.2 |  |  |  | 3.9 |
Net periodic postretirement benefit cost relating to defined benefit plans 2,3 |  |  | 3.3 |  |  |  | 3.1 |  |  |  | 9.7 |  |  |  | 9.6 |
Total |  | $ | 9.0 |  |  | $ | 8.2 |  |  | $ | 28.9 |  |  | $ | 26.2 |
1 Substantially all of the expense related to employee benefits are in Cost of products sold, excluding depreciation and amortization (“Cost of products sold” or “COGS”) with the remaining balance in Selling, general, administrative, research and development (“SG&A and R&D”) within our Statements of Consolidated Income (Loss). 2 Deferred compensation plan expense and the current service cost component of Net periodic postretirement benefit cost relating to the voluntary employees’ beneficiary association that provides benefits for certain eligible retirees and their surviving spouses and eligible dependents (“Salaried VEBA”) are included within our Statements of Consolidated Income (Loss) in SG&A and R&D for all periods presented. All other components of Net periodic postretirement benefit cost relating to Salaried VEBA are included within Other (expense) income, net, on our Statements of Consolidated Income (Loss). 3 The current service cost component of Net periodic postretirement benefit cost relating to the pension plans and the healthcare and life insurance postretirement benefit plan (“OPEB”) are included within our Statements of Consolidated Income (Loss) in COGS for all periods presented. All other components of Net periodic postretirement benefit cost relating to the pension plans and the OPEB are included within Other (expense) income, net, on our Statements of Consolidated Income (Loss). Warrick Pension Amendment. During the quarter ended June 30, 2023, we reached a new four-year collective bargaining agreement with the United Steelworkers Local 104. In connection with the agreement, we amended the Kaiser Aluminum Warrick pension plan (“Warrick Pension Plan”) to increase certain pension benefits for covered plan participants, which resulted in an interim remeasurement of the Warrick Pension Plan as of April 30, 2023. The remeasurement increased our projected benefit obligation by $7.2 million, primarily driven by: (i) a $6.6 million increase in pre-tax prior service cost, which we recorded in Accumulated other comprehensive income (“AOCI”) and amortize on a straight-line basis over approximately 10 years and (ii) an actuarial loss of $0.6 million due to a decrease in the discount rate. The discount rate assumption used to determine the benefit obligation in the April 30, 2023 remeasurement was 4.99% compared to 5.26% at December 31, 2022. There was no change in the April 30, 2023 remeasurement to expected long-term rate of return on plan assets assumption or expected contributions compared to December 31, 2022. Components of Net Periodic Postretirement Benefit Cost. Our results of operations included the following impacts associated with the defined benefit plans: (i) a charge for service rendered by employees; (ii) a charge for accretion of interest; (iii) a benefit for the expected return on plan assets; (iv) amortization of prior service costs associated with plan amendments; and (v) amortization of net actuarial differences. The following table presents the components of Net periodic postretirement benefit cost relating to the defined benefit plans (in millions of dollars):
|  | Pension Plans |  |  | OPEB |  |  | Salaried VEBA |
|  | Quarter Ended |  |  | Quarter Ended |  |  | Quarter Ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Service cost |  | $ | 1.0 |  |  | $ | 1.5 |  |  | $ | 0.3 |  |  | $ | 0.4 |  |  | $ | — |  |  | $ | — |
Interest cost |  |  | 0.3 |  |  |  | 0.1 |  |  |  | 0.8 |  |  |  | 0.5 |  |  |  | 0.7 |  |  |  | 0.5 |
Expected return on plan assets |  |  | (0.3 | ) |  |  | (0.3 | ) |  |  | — |  |  |  | — |  |  |  | (0.6 | ) |  |  | (0.8 | )
Amortization of prior service cost 1 |  |  | 0.2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1.2 |  |  |  | 1.2 |
Amortization of net actuarial gain |  |  | — |  |  |  | — |  |  |  | (0.3 | ) |  |  | — |  |  |  | — |  |  |  | — |
Total net periodic postretirement benefit cost |  | $ | 1.2 |  |  | $ | 1.3 |  |  | $ | 0.8 |  |  | $ | 0.9 |  |  | $ | 1.3 |  |  | $ | 0.9 |
|  | Pension Plans |  |  | OPEB |  |  | Salaried VEBA |
|  | Nine Months Ended September 30, |  |  | Nine Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Service cost |  | $ | 2.8 |  |  | $ | 4.3 |  |  | $ | 0.8 |  |  | $ | 1.2 |  |  | $ | — |  |  | $ | — |
Interest cost |  |  | 0.9 |  |  |  | 0.4 |  |  |  | 2.5 |  |  |  | 1.6 |  |  |  | 2.1 |  |  |  | 1.4 |
Expected return on plan assets |  |  | (0.8 | ) |  |  | (0.7 | ) |  |  | — |  |  |  | — |  |  |  | (1.7 | ) |  |  | (2.3 | )
Amortization of prior service cost 1 |  |  | 0.3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3.7 |  |  |  | 3.7 |
Amortization of net actuarial gain |  |  | — |  |  |  | — |  |  |  | (0.9 | ) |  |  | — |  |  |  | — |  |  |  | — |
Total net periodic postretirement benefit cost |  | $ | 3.2 |  |  | $ | 4.0 |  |  | $ | 2.4 |  |  | $ | 2.8 |  |  | $ | 4.1 |  |  | $ | 2.8 |
1 We amortize prior service cost on a straight-line basis over the average remaining years of service of the active plan participants.

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