Annual report pursuant to Section 13 and 15(d)

Retirement Benefit Plans

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Retirement Benefit Plans
12 Months Ended
Dec. 28, 2024
Retirement Benefits [Abstract]  
Retirement Benefit Plans [Text Block]
Note 17 : Retirement Benefit Plans
Defined Contribution Plans
We provide tax-qualified defined contribution plans for the benefit of eligible employees, former employees, and retirees in the US and certain other countries. The plans are designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis. For the benefit of eligible US employees, we also provide an unfunded non-tax-qualified supplemental deferred compensation plan for certain highly compensated employees, which had a balance of $3.3 billion as of December 28, 2024 ($2.9 billion as of December 30, 2023), recorded within other accrued liabilities on the Consolidated Balance Sheets.
We expensed $541 million in 2024, $272 million in 2023, and $489 million in 2022 for matching contributions based on the amount of employee contributions under the US qualified defined contribution and non-qualified deferred compensation plans. The matching contribution in the US qualified defined contribution plan was increased from January 1 through December 31, 2024 as compared to 2023 and 2022. The matching contribution in the US qualified defined contribution plan was reduced from March 1 through December 30, 2023 as compared to 2022.
US Retiree Medical Plan
Upon retirement, we provide certain benefits to eligible US employees who were hired prior to 2014 under the US Retiree Medical Plan. The benefits can be used to pay all or a portion of the cost to purchase eligible coverage in a medical plan.
As of December 28, 2024 and December 30, 2023, the projected benefit obligations were $493 million and $490 million, which used the discount rates of 5.7% and 5.3%. The December 28, 2024 and December 30, 2023 corresponding fair values of plan assets were $542 million and $548 million. As of December 28, 2024 and December 30, 2023, the US Retiree Medical Plan was in the net asset position.
The investment strategy for US Retiree Medical Plan assets is to invest primarily in liquid assets, due to the level of expected future benefit payments. The assets are invested in tax-aware global equity and fixed-income long credit portfolios. Both portfolios are actively managed by external managers. The tax-aware global equity portfolio is composed of a diversified mix of equities in developed countries. The tax-aware fixed-income long credit portfolio is composed of domestic securities. The allocation to each asset class will fluctuate with market conditions, such as volatility and liquidity concerns, and will typically be rebalanced when outside the target ranges, which are 50% equity and 50% fixed-income investments. As of December 28, 2024 and December 30, 2023, the majority of the US Retiree Medical Plan assets were invested in exchange-traded equity securities and were measured at fair value using Level 1 inputs. The remaining US Retiree Medical Plan assets were invested in fixed-income investments and were measured at fair value using Level 2 inputs.
As of December 28, 2024, the estimated benefit payments for this plan over the next 10 years are as follows:
(In Millions) 2025 2026 2027 2028 2029 2030-2034
Postretirement medical benefits $ 37  $ 45  $ 45  $ 44  $ 44  $ 209 
Pension Benefit Plans
We provide defined-benefit pension plans in certain countries, most significantly Ireland, the US, Germany, and Israel. The majority of the plans' benefits have been frozen.
Benefit Obligation and Plan Assets for Pension Benefit Plans
The vested benefit obligation for a defined-benefit pension plan is the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of separation or retirement.
Years Ended (In Millions)
Dec 28, 2024 Dec 30, 2023
Changes in projected benefit obligation:
Beginning projected benefit obligation $ 2,825  $ 2,705 
Service cost 33  36 
Interest cost 122  127 
Actuarial (gain) loss (40) 57 
Currency exchange rate changes (107) 38 
Plan settlements (143) (103)
Other (44) (35)
Ending projected benefit obligation1
2,646  2,825 
Changes in fair value of plan assets:
Beginning fair value of plan assets 2,212  2,130 
Actual return on plan assets 121  151 
Currency exchange rate changes (74) 34 
Plan settlements (143) (103)
Other 26  — 
Ending fair value of plan assets2
2,142  2,212 
Net unfunded status $ 504  $ 613 
Amounts recognized in the Consolidated Balance Sheets
Other long-term assets $ 135  $ 62 
Other long-term liabilities $ 639  $ 675 
Accumulated other comprehensive loss (income), before tax3
$ 337  $ 410 
Accumulated benefit obligation $ 2,509  $ 2,706 
1    The projected benefit obligation was approximately 30% in the US and 70% outside of the US as of December 28, 2024 and December 30, 2023.
2    The fair value of plan assets was approximately 40% in the US and 60% outside of the US as of December 28, 2024 and December 30, 2023.
3    The accumulated other comprehensive loss (income), before tax, was approximately 80% in the US and 20% outside of the US as of December 28, 2024 (approximately 70% in the US and 30% outside of the US as of December 30, 2023).
Changes in actuarial gains and losses in the projected benefit obligation are generally driven by discount rate movement. We use the corridor approach to amortize actuarial gains and losses. Under this approach, net actuarial gains or losses in excess of 10% of the larger of the projected benefit obligation or the fair value of plan assets are amortized on a straight-line basis over the average remaining service period of active plan participants.
As of December 28, 2024, the accumulated benefit obligations were $763 million and $1.7 billion for the US plan and non-US plans, respectively. As of December 30, 2023, the accumulated benefit obligations were $849 million and $1.9 billion for the US plan and non-US plans, respectively. As of December 28, 2024 and December 30, 2023, only non-US plans had projected benefit obligations and accumulated benefit obligations in excess of plan assets.
(In Millions)
Dec 28, 2024 Dec 30, 2023
Plans with accumulated benefit obligation in excess of plan assets
Accumulated benefit obligation $ 850  $ 1,857 
Plan assets $ 348  $ 1,301 
Plans with projected benefit obligation in excess of plan assets
Projected benefit obligation $ 987  $ 1,976 
Plan assets $ 348  $ 1,301 
Assumptions for Pension Benefit Plans
Years Ended
Dec 28, 2024 Dec 30, 2023
Weighted average actuarial assumptions used to determine benefit obligations
Discount rate 4.6  % 4.5  %
Rate of compensation increase 3.4  % 3.3  %
Years Ended
2024 2023 2022
Weighted average actuarial assumptions used to determine costs
Discount rate 4.5  % 4.9  % 2.2  %
Expected long-term rate of return on plan assets 5.1  % 5.0  % 3.2  %
Rate of compensation increase 3.3  % 3.7  % 3.2  %
We establish the discount rate for each pension plan by analyzing current market long-term bond rates and matching the bond maturity with the average duration of the pension liabilities.
We establish the expected long-term rate of return on plan assets by developing a forward-looking, long-term return assumption for each pension fund asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class.
Funding
Our practice is to fund the various pension plans in amounts sufficient to meet the minimum requirements of applicable local laws and regulations. On a worldwide basis, our pension and retiree medical plans were 86% funded as of December 28, 2024. Funded status is not indicative of our ability to pay ongoing pension benefits or of our obligation to fund retirement trusts.
Net Periodic Benefit Cost
The net periodic benefit cost for pension and US retiree medical benefits was $69 million in 2024 ($107 million in 2023 and $139 million in 2022).
Pension Plan Assets
December 28, 2024
Fair Value Measured at Reporting Date Using
(In Millions)
Level 1
Level 2
Level 3
Total
Equity securities $ —  $ 344  $ —  $ 344 
Fixed income —  142  24  166 
Assets measured by fair value hierarchy $   $ 486  $ 24  $ 510 
Assets measured at net asset value 1,618 
Cash and cash equivalents 14 
Total pension plan assets at fair value $ 2,142 
December 30, 2023
Fair Value Measured at Reporting Date Using
(In Millions)
Level 1
Level 2
Level 3
Total
Equity securities $ —  $ 383  $ —  $ 383 
Fixed income —  139  25  164 
Assets measured by fair value hierarchy $   $ 522  $ 25  $ 547 
Assets measured at net asset value 1,648 
Cash and cash equivalents 17 
Total pension plan assets at fair value $ 2,212 
US Plan Assets
The investment strategy for US Pension Plan assets is to manage the funded status volatility, taking into consideration the investment horizon and expected volatility to help enable sufficient assets to be available to pay pension benefits as they come due. The allocation to each asset class will fluctuate with market conditions, such as volatility and liquidity concerns, and will typically be rebalanced when outside the target ranges, which are 91% fixed income and 9% equity investments. During 2024 and 2023, the US Pension Plan assets were invested in collective investment trust funds, which are measured at net asset value.
Non-US Plan Assets
The investments of the non-US plans are managed by insurance companies, pension funds, or third-party trustees, consistent with regulations or market practice of the country where the assets are invested. The investment manager makes investment decisions within the guidelines set by Intel or local regulations. Investments managed by qualified insurance companies or pension funds under standard contracts follow local regulations, and we are not actively involved in their investment strategies. For the assets that we have the discretion to set investment guidelines, the assets are invested in developed country equity investments and fixed-income investments, either through index funds or direct investment. In general, the investment strategy is designed to accumulate a diversified portfolio among markets, asset classes, or individual securities to reduce market risk and to help enable sufficient pension assets to be available to pay benefits as they come due. The equity investments in the non-US plan assets are invested in a diversified mix of equities of developed countries, including the US, and emerging markets throughout the world. We have control over the investment strategy related to the majority of the assets measured at net asset value, which are invested in hedge funds, bond index funds, and equity index funds. The target allocation of the non-US plan assets that we have control over was approximately 50% fixed income, 35% equity, and 15% hedge fund investments in 2024.
Estimated Future Benefit Payments for Pension Benefit Plans
As of December 28, 2024, estimated benefit payments over the next 10 years are as follows:
(In Millions)
2025 2026 2027 2028 2029 2030-2034
Pension benefits $ 145  $ 86  $ 95  $ 97  $ 106  $ 623