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RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
NOTE 15 - RETIREMENT AND POSTRETIREMENT BENEFIT PLANS

Occidental has various defined contribution and defined benefit plans for its salaried, domestic union and nonunion hourly and certain foreign national employees. In addition, Occidental also provides medical and other benefits for certain active, retired and disabled employees and their eligible dependents.
In conjunction with the Acquisition, Occidental acquired certain Anadarko contributory and non-contributory defined benefit pension plans, which include both qualified and supplemental plans and plans that provide health care and life insurance benefits for certain retired employees. The Anadarko pension and postretirement obligations were remeasured as of the Acquisition date. The remeasurement resulted in an increase to the benefit obligation of $193 million.
Effective as of June 30, 2020 the defined benefit pension plans and certain of the supplemental plans covering active Anadarko employees were frozen. This resulted in a decrease to the benefit obligation of approximately $278 million, including a curtailment gain of approximately $124 million and a corresponding offset to accumulated other comprehensive income of approximately $154 million.

DEFINED CONTRIBUTION PLANS
All domestic employees and certain foreign national employees are eligible to participate in one or more of the defined contribution retirement or savings plans that provide for periodic contributions by Occidental based on plan-specific criteria, such as base pay, level and employee contributions. Certain salaried employees participate in a supplemental retirement plan that restores benefits lost due to governmental limitations on qualified retirement benefits. The accrued liabilities for the supplemental retirement plan were $239 million and $261 million as of December 31, 2020, and 2019, respectively. Occidental expensed $192 million in 2020, $192 million in 2019 and $152 million in 2018 under the provisions of these defined contribution and supplemental retirement plans.

DEFINED BENEFIT PLANS
Participation in defined benefit plans is limited. Approximately 400 domestic and 300 foreign national employees, mainly union, nonunion hourly and certain employees that joined Occidental from acquired operations with grandfathered benefits, are currently accruing benefits under these plans.
Pension costs for Occidental’s defined benefit pension plans, determined by independent actuarial valuations, are generally funded by payments to trust funds, which are administered by independent trustees.

POSTRETIREMENT AND OTHER BENEFIT PLANS
Occidental provides medical and dental benefits and life insurance coverage for certain active, retired and disabled employees and their eligible dependents. Occidental generally funds the benefits as they are paid during the year. These
benefit costs, including the postretirement costs, were approximately $235 million in 2020, $220 million in 2019 and $182 million in 2018.

OBLIGATIONS AND FUNDED STATUS
The following tables show the amounts recognized in Occidental’s consolidated balance sheets at December 31, 2020 and 2019, related to its pension and postretirement benefit plans:

Pension BenefitsPostretirement Benefits
millions2020201920202019
Amounts recognized in the consolidated balance sheet:
Long-term receivables and other assets, net$167 $149 $— $— 
Accrued liabilities(9)(96)(74)(72)
Deferred credits and other liabilities — pension and postretirement obligations(578)(720)(1,185)(1,103)
 $(420)$(667)$(1,259)$(1,175)
Accumulated other comprehensive loss included the following after-tax balances:
Net (gain) loss$(3)$(20)$226 $184 
Prior service credit— — (60)(67)
 $(3)$(20)$166 $117 

The following tables show the funding status, obligations and plan asset fair values of Occidental related to its pension and postretirement benefit plans for the years ended December 31:

Pension BenefitsPostretirement Benefits
millions2020201920202019
Changes in the benefit obligation:
Benefit obligation — beginning of year$2,508 $499 $1,175 $808 
Service cost — benefits earned during the period37 47 39 24 
Interest cost on projected benefit obligation52 40 37 36 
Actuarial (gain) loss251 (41)73 45 
Curtailment (gain) loss(278)(136)2 10 
Special termination benefits23 49 — — 
Benefits paid(948)(99)(73)(51)
Sale of Colombia assets(24)— — — 
Additions due to the Acquisition— 2,136 — 301 
Other(8)13 6 2 
Benefit obligation — end of year$1,613 $2,508 $1,259 $1,175 
Changes in plan assets:
Fair value of plan assets — beginning of year$1,841 $539 $— $— 
Actual return on plan assets161 110 — — 
Employer contributions146 41 67 49 
Benefits paid(948)(99)(73)(51)
Additions due to the Acquisition— 1,233 — — 
Other(7)17 6 2 
Fair value of plan assets — end of year$1,193 $1,841 $— $— 
Unfunded status:$(420)$(667)$(1,259)$(1,175)
Changes in actuarial gains and losses in the projected benefit obligation are primarily driven by discount rate movement.
The following table sets forth details of the obligations and assets of Occidental’s defined benefit pension plans for the years December 31:

Accumulated Benefit
Obligation in Excess of
Plan Assets		Plan Assets in
Excess of Accumulated
Benefit Obligation
millions2020201920202019
Projected benefit obligation$1,226 $2,191 $387 $317 
Accumulated benefit obligation$1,221 $1,931 $379 $311 
Fair value of plan assets$670 $1,375 $523 $466 

COMPONENTS OF NET PERIODIC BENEFIT COST
The following table sets forth the components of net periodic benefit costs for the years ended December 31:

Pension BenefitsPostretirement Benefits
millions202020192018202020192018
Net periodic benefit costs:     
Service cost — benefits earned during the period$37 $47 $5 $39 $24 $23 
Interest cost on projected benefit obligation52 40 15 37 36 34 
Expected return on plan assets(73)(52)(25)— — — 
Recognized actuarial loss5 9 7 11 8 14 
Recognized prior service credit— — — (8)(8)— 
(Gain) loss due to curtailment(124)(91)— 2 6 — 
Gain due to settlement(19)— — — — — 
Special termination benefits22 49 — — — — 
Other costs and adjustments1 (2)1 — — (2)
Net periodic benefit cost$(99)$— $3 $81 $66 $69 

The service cost component of net periodic benefit cost is included in selling, general and administrative, oil and gas operating expense, chemical and midstream costs and exploration expense on Occidental’s Consolidated Statements of Operations. All other components of net periodic benefit cost are included in other operating and non-operating expense.

ADDITIONAL INFORMATION
The following table sets forth the weighted-average assumptions used to determine Occidental’s benefit obligation and net periodic benefit cost for domestic plans for the years ended December 31:

 Pension BenefitsPostretirement Benefits
2020201920202019
Benefit Obligation Assumptions:    
Discount rate2.19 %3.09 %3.05 %3.26 %
Rate of increase in compensation levels5.07 %5.32 %— — 
Net Periodic Benefit Cost Assumptions:
Discount rate3.04 %3.22 %3.26 %3.41 %
Rate of increase in compensation levels5.34 %5.35 %— — 
Assumed long-term rate of return on assets6.02 %6.03 %— — 

For domestic pension plans and postretirement benefit plans, Occidental based the discount rate on a AA-AAA Universe yield curve in 2020 and 2019. The assumed long-term rate of return on assets is estimated with regard to current market
factors but within the context of historical returns for the asset mix that exists at year end. Assumed rates of compensation increases for active participants in certain plans and vary by age group.
In 2020, Occidental adopted the Society of Actuaries Pri-2012 Private Retirement Plans Mortality Tables with MP-2020 Mortality Improvement Scale, which updated the mortality assumptions that private defined-benefit plans in the United States use in the actuarial valuations that determine a plan sponsor’s pension obligations. The new mortality assumption reflects additional data that the Social Security Administration has released since the previous mortality tables and improvement scales were released. The changes in the mortality improvement scale results in a decrease of $8 million and $12 million in the pension and postretirement benefit obligation, respectively, at December 31, 2020.
The postretirement benefit obligation was determined by application of the terms of medical and dental benefits and life insurance coverage, including the effect of established maximums on covered costs, together with relevant actuarial assumptions and health care cost trend rates. Health care cost trend rates for Medicare advantaged prescription drug (MAPD) plans of 9.6% starting in 2021, then grading down to 4.5% in 2028 and beyond. Health care cost trend rates used for non-MAPD plans are 6.5% to 7.0% in 2020, then grading down to 4.5% in 2028 and beyond.
The actuarial assumptions used could change in the near-term as a result of changes in expected future trends and other factors that, depending on the nature of the changes, could cause increases or decreases in the plan assets and liabilities.

FAIR VALUE OF PENSION PLAN ASSETS
Qualified defined benefit plan assets are monitored by Occidental’s Pension and Retirement Trust and Investment Committee in its role as a fiduciary. The Investment Committee selects and employs various external professional investment management firms to manage specific investments across the spectrum of asset classes. The Investment Committee employs a liability driven investment approach that uses a diversified blend of investments (equity securities, fixed-income securities, and alternative investments) along a glide path to optimize the long-term return of plan assets relative to plan liabilities, at a prudent level of risk. Equity investments are diversified across U.S. and non-U.S. stocks, as well as differing styles and market capitalizations. Investment performance is measured and monitored on an ongoing basis through quarterly investment portfolio and manager guideline compliance reviews, annual liability measurements and periodic studies.
The fair values of Occidental’s pension plan assets by asset category were as follows:

millionsLevel 1Level 2Level 3Total
December 31, 2020
Asset Class:    
Cash and cash equivalents$38 $— $— $38 
Government securities65 — — 65 
Corporate bonds (a)
— 39 — 39 
Equity securities (b)
138 — — 138 
Other— 55 — 55 
Investments measured at fair value$241 $94 $— $335 
Investments measured at net asset value (c)
— — — 861 
Total pension plan assets (d)
$241 $94 $— $1,196 
December 31, 2019
Asset Class:
Cash and cash equivalents$42 $— $— $42 
Government securities63 — — 63 
Corporate bonds (a)
— 94 — 94 
Equity securities (b)
311 — — 311 
Other— 81 — 81 
Investments measured at fair value$416 $175 $— $591 
Investments measured at net asset value (c)
— — — 1,253 
Total pension plan assets (d)
$416 $175 $— $1,844 
(a)This category represents investment grade bonds of U.S. and non-U.S. issuers from diverse industries.
(b)This category represents direct investments in mutual funds and common and preferred stocks from diverse U.S. and non-U.S. industries.
(c)Certain investments measured at fair value using the net asset value per share (or its equivalent) have not been categorized in the fair value hierarchy. Amounts presented in this table are intended to reconcile the fair value hierarchy to the pension plan assets.
(d)Amounts exclude net payables of approximately $3 million as of December 31, 2020 and 2019.

Occidental expects to contribute at least approximately $170 million in cash to its defined benefit pensions plans during 2021.

Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows for the years ended December 31:

millionsPension
Benefits		Postretirement Benefits
2021$251 $75 
202296 73 
202393 71 
202495 69 
202590 67 
2026 - 2030399 312