Company: NC
Filing Date: 2025-04-07
Form Type: ARS
Source: 0000789933-25-000013
Chunk: 179

Company: NACCO INDUSTRIES INC
Filing Date: 2025-04-07
Form: ARS
Chunk 179
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MENTS NACCO INDUSTRIES, INC. AND SUBSIDIARIES (Tabular Amounts in Thousands, Except Per Share, Percentage Data and Oil and Gas Disclosures) F-32

Future pension benefit payments expected to be paid from assets of the pension plans are: 2025 $ 2,750 2026 2,631 2027 2,575 2028 2,514 2029 2,435 2030 - 2034 10,860 $ 23,765 The expected long-term rate of return on defined benefit plan assets reflects management's expectations of long-term rates of return on funds invested to provide for benefits included in the projected benefit obligations. In establishing the expected long- term rate of return assumption for plan assets, we consider the historical rates of return over a period of time that is consistent with the long-term nature of the underlying obligations of these plans as well as a forward-looking rate of return. The historical and forward-looking rates of return for each of the asset classes used to determine our estimated rate of return assumption were based upon the rates of return earned or expected to be earned by investments in the equivalent benchmark market indices for each of the asset classes. Expected returns for pension plans are based on a calculated market-related value for pension plan assets. Under this methodology, asset gains and losses resulting from actual returns that differ from our expected returns are recognized in the market-related value of assets ratably over three years. The pension plans maintain investment policies that, among other things, establish a portfolio asset allocation methodology with percentage allocation bands for individual asset classes. The investment policies provide that investments are reallocated between asset classes as balances exceed or fall below the appropriate allocation bands. The following is the actual allocation percentage and target allocation percentage for the pension plan assets at December 31: 2024 Actual Allocation 2023 Actual Allocation Target Allocation Range Fixed income securities 99.2 % 99.1 % 90.0% - 100.0% Money market funds 0.8 % 0.6 % 0.0% - 10.0% Cash equivalents — % 0.3 % 0.0% The asset allocation reflects the move into fixed income securities to mitigate volatility prior to the termination of the Combined Plan, currently expected to occur in 2025. The defined benefit pension plans do not have any direct ownership of NACCO common stock. The fair value of each major category of our pension plan assets are valued using quoted market