Page 177 - Martin Marietta - 2024 Proxy Statement

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Management’s selection of the expected long‐term rate of return on pension fund assets is based on the current asset class mix
of the Company's pension plan assets, current capital market conditions and a stochastic forecast offuture conditions. Based on
the currently projected returns on these assets and related expenses, the Company selected an expected return on assets of 6.75%,
the same as the prior‐year rate.
The following table presents the expected return on pension assets as compared with the actual return on pension assets:

(in millions) Expected Return on Pension Assets Actual Return on Pension Assets
2023 $71.4 $123.1
2022 $77.3 ($171.4)

The difference between the expected return and the actual return on pension assets is included in actuarial gains and losses, which
are amortized into annual pension expense as previously described.
At December 31, 2023 and 2022, the Company estimated the remaining lives of participants in the pension plans using the Society
of Actuaries’ Pri‐2012 Base Mortality Table. The no‐collar table was used for salaried participants and the blue‐collar table was
used for hourly participants, both adjusted to reflect the historical experience of the Company’s participants and a geospatial
mortality analysis. The Company selected the MP‐2020 scale for mortality improvement at December 31, 2023 and 2022.
Assumptions are selected on December 31 to calculate the succeeding year’s expense. The assumptions selected at December 31,
2023 are as follows:
Discount rate 5.58%
Rate of increase in future compensation levels 4.50%
Expected long‐term rate of return on assets 6.75%
Average remaining service period for participants 9 years
Mortality Tables:
Base Table Pri‐2012
Mortality Improvement Scale MP‐2020

Using these assumptions, the Company's pension benefit obligation as of December 31, 2023 was $969.2 million and 2024 pension
expense is expected to be approximately $21.0 million based on current demographics and structure of the plans.Changes in the
underlying assumptions would have the following estimated impact on the obligation and expected expense:
 A 25‐basis‐point change in the discount rate would have changed the December 31, 2023 pension benefit obligation
by approximately $29.4 million.
 A 25‐basis‐point change in the discount rate would change the 2024 expected expense by approximately $1.2 million.
 A 25‐basis‐point change in the expected long‐term rate of return on assets would change the 2024 expected expense
by approximately $2.9 million.
The Company made pension plan and SERP contributions of $31.8 million in 2023 and $352.1 million during the five‐year period
ended December 31, 2023. In total, the Company’s pension plans are overfunded (fair value of plan assets exceeds the projected
benefit obligation) by $207.6 million at December 31, 2023. The Company’s projected benefit obligation was $969.2 million at
December 31, 2023, an increase of $111.6 million, or 13%, versus the prior year, driven by the lower discount rate compared with
the prior year. The Company expects to make pension plan and SERP contributions of $32.7 million in 2024, of which $25.0 million
is voluntary.

2023 Annual Report ♦ Page 75