Employee Postretirement Benefits

12 Months Ended

Dec. 31, 2022

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Employee Postretirement Benefits

Employee Postretirement Benefits

Substantially all regular employees in the U.S. and the United Kingdom are covered by defined contribution retirement plans and certain U.S. and United Kingdom employees previously earned benefits covered by defined benefit pension plans that currently provide no future service benefit (the "Principal Plans"). Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. The funding policy for our qualified defined benefit pension plans is to contribute assets at least equal in amount to regulatory minimum requirements. Nonqualified U.S. plans providing pension benefits in excess of limitations imposed by the U.S. income tax code are not funded.

Substantially all U.S. retirees and employees have access to our unfunded health care and life insurance benefit plans. The annual increase in the consolidated weighted-average health care cost trend rate is expected to be 5.7 percent in 2023 and to decline to 4.5 percent in 2030 and thereafter. Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans.

As a result of restructuring actions related to the 2018 Global Restructuring Program, aggregate pension settlement charges of $91, and $49 during 2021 and 2020, respectively, and curtailment gains of $2 during 2021 were recognized in Nonoperating

expense, primarily related to the defined benefit pension plans in the U.S, Switzerland and the United Kingdom (see Note 2 for further information about the 2018 Global Restructuring Program).  

Summarized financial information about postretirement plans, excluding defined contribution retirement plans, is presented below:

	Pension Benefits				Other Benefits
	Year Ended December 31
	2022		2021		2022		2021
Change in Benefit Obligation
Benefit obligation at beginning of year	$	3,811	$	4,341	$	669	$	709
Service cost	16		21		7		8
Interest cost	89		80		21		19
Actuarial (gain) loss(a)	(1,000)		(105)		(113)		(8)
Currency and other	(197)		(54)		2		(3)
Benefit payments from plans	(173)		(138)		—		—
Direct benefit payments	(8)		(8)		(53)		(54)
Settlements and curtailments	(97)		(326)		—		(2)
Benefit obligation at end of year	2,441		3,811		533		669
Change in Plan Assets
Fair value of plan assets at beginning of year	3,744		4,193		—		—
Actual return on plan assets	(987)		52		—		—
Employer contributions	30		10		—		—
Currency and other	(199)		(45)		—		—
Benefit payments	(173)		(138)		—		—
Settlements	(94)		(328)		—		—
Fair value of plan assets at end of year	2,321		3,744		—		—
Funded Status	$	(120)	$	(67)	$	(533)	$	(669)

(a) The actuarial net gains in 2022 and in 2021 were primarily due to discount rate increases.

Substantially all of the funded status of pension and other benefits is recognized in the consolidated balance sheet in Noncurrent Employee Benefits, with the remainder recognized in Accrued expenses and other current liabilities and Other Assets. 

Information for the Principal Plans and All Other Pension Plans

	Principal Plans				All Other Pension Plans				Total
	Year Ended December 31
	2022		2021		2022		2021		2022		2021
Projected benefit obligation (“PBO”)	$	2,089	$	3,339	$	352	$	472	$	2,441	$	3,811
Accumulated benefit obligation (“ABO”)	2,089		3,339		305		408		2,394		3,747
Fair value of plan assets	2,018		3,389		303		355		2,321		3,744

Approximately one-half of the PBO and fair value of plan assets for the Principal Plans relate to the U.S. qualified and nonqualified pension plans.

Information for Pension Plans with an ABO in Excess of Plan Assets

	December 31
	2022		2021
ABO	$	1,251	$	1,788
Fair value of plan assets	1,089		1,616

Information for Pension Plans with a PBO in Excess of Plan Assets

	December 31
	2022		2021
PBO	$	1,261	$	1,835
Fair value of plan assets	1,091		1,648

Components of Net Periodic Benefit Cost

	Pension Benefits						Other Benefits
	Year Ended December 31
	2022		2021		2020		2022		2021		2020
Service cost	$	16	$	21	$	22	$	7	$	8	$	8
Interest cost	89		80		95		21		19		23
Expected return on plan assets(a)	(123)		(132)		(134)		—		—		—
Recognized net actuarial loss	34		37		42		1		1		1
Settlements and curtailments	52		89		49		—		—		—
Other	1		(5)		(4)		(1)		(2)		(2)
Net periodic benefit cost	$	69	$	90	$	70	$	28	$	26	$	30

(a)The expected return on plan assets is determined by multiplying the fair value of plan assets at the remeasurement date, typically the prior year-end adjusted for estimated current year cash benefit payments and contributions, by the expected long-term rate of return.

The components of net periodic benefit cost other than the service cost component are included in the line item Nonoperating expense in our consolidated income statement.

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31

	Pension Benefits								Other Benefits
	Projected 2023		2022		2021		2020		2022		2021		2020
Discount rate	5.18	%	2.71	%	1.98	%	2.44	%	3.15	%	2.69	%	3.51	%
Expected long-term return on plan assets	5.74	%	3.80	%	3.41	%	3.66	%	—		—		—
Rate of compensation increase	3.49	%	3.23	%	3.07	%	3.08	%	—		—		—

Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31

	Pension Benefits				Other Benefits
	2022		2021		2022		2021
Discount rate	5.18	%	2.36	%	5.92	%	3.15	%
Rate of compensation increase	3.49	%	3.23	%	—		—

Investment Strategies for the Principal Plans

Strategic asset allocation decisions are made considering several risk factors, including plan participants' retirement benefit security, the estimated payments of the associated liabilities, the plan funded status, and Kimberly-Clark's financial condition. The resulting strategic asset allocation is a diversified blend of equity and fixed income investments. Equity investments are typically diversified across geographies and market capitalization. Fixed income investments are diversified across multiple sectors including government issues and corporate debt instruments with a portfolio duration that is consistent with the estimated payment of the associated liability. Actual asset allocation is regularly reviewed and periodically rebalanced to the strategic allocation when considered appropriate. Our 2023 target plan asset allocation for the Principal Plans is approximately 85 percent fixed income securities and 15 percent equity securities.

The expected long-term rate of return is generally evaluated on an annual basis. In setting this assumption, we consider a number of factors including projected future returns by asset class relative to the current asset allocation. The weighted-average expected long-term rate of return on pension fund assets used to calculate pension expense for the Principal Plans was 3.55 percent in 2022, 3.51 percent in 2021 and 3.76 percent in 2020, and will be 6.05 percent in 2023.

Set forth below are the pension plan assets of the Principal Plans measured at fair value, by level in the fair-value hierarchy. More than 65 percent of the assets are held in pooled funds and are measured using a net asset value (or its equivalent). Accordingly, such assets do not meet the Level 1, Level 2, or Level 3 criteria of the fair value hierarchy.

	Fair Value Measurements at December 31, 2022
	Total Plan Assets		Assets at Quoted Prices in Active Markets for Identical Assets (Level 1)		Assets at Significant Observable Inputs (Level 2)		Assets at Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents
Held directly	$	69	$	69	$	—	$	—
Held through mutual and pooled funds measured at net asset value	76		—		—		—
Fixed Income
Held directly
U.S. government and municipals	115		115		—		—
U.S. corporate debt	193		—		193		—
International bonds	33		—		33		—
Held through mutual and pooled funds measured at net asset value
U.S. government and municipals	71		—		—		—
U.S. corporate debt	419		—		—		—
International bonds	549		—		—		—
Equity
Held directly
U.S. equity	21		21		—		—
International equity	15		15		—		—
Held through mutual and pooled funds measured at net asset value
Non-U.S. equity	15		—		—		—
Global equity	221		—		—		—
Insurance Contracts	222		—		—		222
Other	(1)		(1)		—		—
Total Plan Assets	$	2,018	$	219	$	226	$	222

Futures contracts are used when appropriate to manage duration targets.  As of December 31, 2022 and 2021, the U.S. plan held directly Treasury futures contracts with a total notional value of approximately $362 and $377, respectively, and an

insignificant fair value. As of December 31, 2022 and 2021, the United Kingdom plan held through a pooled fund future contracts with a total notional value of approximately $524 and $403, and an insignificant fair value.

During 2022 and 2021, the plan assets did not include a significant amount of Kimberly-Clark common stock.

	Fair Value Measurements at December 31, 2021
	Total Plan Assets		Assets at Quoted Prices in Active Markets for Identical Assets (Level 1)		Assets at Significant Observable Inputs (Level 2)		Assets at Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents
Held directly	$	50	$	50	$	—	$	—
Held through mutual and pooled funds measured at net asset value	26		—		—		—
Fixed Income
Held directly
U.S. government and municipals	166		158		8		—
U.S. corporate debt	293		7		286		—
International bonds	43		—		43		—
Held through mutual and pooled funds measured at net asset value
U.S. government and municipals	149		—		—		—
U.S. corporate debt	646		—		—		—
International bonds	1,144		—		—		—
Equity
Held directly
U.S. equity	17		17		—		—
International equity	32		32		—		—
Held through mutual and pooled funds measured at net asset value
Non-U.S. equity	46		—		—		—
Global equity	423		—		—		—
Insurance Contracts	355		—		—		355
Other	(1)		1		—		—
Total Plan Assets	$	3,389	$	265	$	337	$	355

Inputs and valuation techniques used to measure the fair value of plan assets vary according to the type of security being valued. Substantially all of the equity securities held directly by the plans are actively traded and fair values are determined based on quoted market prices. Fair values of U.S. government securities are determined based on trading activity in the marketplace.

Fair values of U.S. corporate debt, U.S. municipals and international bonds are typically determined by reference to the values of similar securities traded in the marketplace and current interest rate levels. Multiple pricing services are typically employed to assist in determining these valuations.

Fair values of equity securities and fixed income securities held through units of pooled funds are based on net asset value of the units of the pooled fund determined by the fund manager. Pooled funds are similar in nature to retail mutual funds, but are typically more efficient for institutional investors. The fair value of pooled funds is determined by the value of the underlying assets held by the fund and the units outstanding.

Equity securities held directly by the pension trusts and those held through units in pooled funds are monitored as to issuer and industry. Except for U.S. Treasuries, concentrations of fixed income securities are similarly monitored for concentrations by issuer and industry. As of December 31, 2022, there were no significant concentrations of equity or debt securities in any single issuer or industry.

No level 3 transfers (in or out) were made in 2022 or 2021. Fair values of insurance contracts are based on an evaluation of various factors, including purchase price.

We expect to contribute approximately $25 to our defined benefit pension plans in 2023. Over the next ten years, we expect that the following gross benefit payments will occur:

	Pension Benefits		Other Benefits
2023	$	179	$	57
2024	190		58
2025	188		57
2026	189		56
2027	192		53
2028-2032	929		233

Defined Contribution Pension Plans

Our 401(k) profit sharing plan and supplemental plan provide for a matching contribution of a U.S. employee's contributions and accruals, subject to predetermined limits, as well as a discretionary profit sharing contribution, in which contributions will be based on our profit performance. We also have defined contribution pension plans for certain employees outside the U.S. Costs charged to expense for our defined contribution pension plans were $132 in 2022, $116 in 2021, and $141 in 2020. Approximately 30 percent of these costs were for plans outside the U.S.