Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2024

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

L. Pension and Other Postretirement Benefits

The components of net periodic benefit cost were as follows:

	Second quarter ended June 30,						Six months ended June 30,
Pension benefits	2024			2023			2024			2023
Service cost	$	3		$	3		$	5		$	5
Interest cost(1)		27			29			54			60
Expected return on plan assets(1)		(35	)		(37	)		(70	)		(76	)
Recognized net actuarial loss(1)		8			7			16			14
Curtailments(2)		—			—			1			—
Settlements(2)		(1	)		21			(1	)		21
Net periodic benefit cost	$	2		$	23		$	5		$	24

	Second quarter ended June 30,						Six months ended June 30,
Other postretirement benefits	2024			2023			2024			2023
Service cost	$	—		$	1		$	1		$	2
Interest cost(1)		6			7			12			13
Recognized net actuarial loss(1)		2			1			3			2
Amortization of prior service benefit(1)		(4	)		(4	)		(7	)		(7	)
Net periodic benefit cost	$	4		$	5		$	9		$	10

(1)These amounts were reported in Other (income) expenses, net on the accompanying Statement of Consolidated Operations (see Note P).

(2)These amounts were reported in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations and Cash Flows.

Plan Actions. In 2024, management initiated the following actions to a certain pension plan:

Action #1 – On January 8, 2024, Alcoa announced the full curtailment of the Kwinana refinery. As a result, curtailment accounting was triggered within Alcoa’s Australian pension plan. The Company recorded a $1 decrease to Other noncurrent assets and recognized a curtailment loss of $1 ($0 after-tax) in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations.

Action #2 – In the second quarter of 2024, settlement accounting and a related plan remeasurement was triggered within Alcoa’s Australian pension plan as a result of participants electing lump sum payments. Alcoa recorded a $19 increase to Other noncurrent assets and recognized a settlement gain of $1 ($0 after-tax) in Restructuring and other charges, net on the Statement of Consolidated Operations.

Action #	Number of affected plan participants	Weighted average discount rate as of prior plan remeasurement date	Plan remeasurement date	Weighted average discount rate as of plan remeasurement date	Increase (decrease) to other noncurrent assets			Curtailment loss(1)		Settlement gain(2)
1	~110	N/A	N/A	N/A	$	(1	)	$	1	$	—
2	~10	4.81%	June 30, 2024	5.23%		19			—		(1	)
	~120				$	18		$	1	$	(1	)

(1)This amount represents the net actuarial loss arising from the curtailment and was recognized immediately in Restructuring and other charges, net on the accompanying Statement of Consolidated Operations.

(2)This amount represents the net actuarial gain and was reclassified from Accumulated other comprehensive loss to Restructuring and other charges, net on the accompanying Statement of Consolidated Operations.

Funding and Cash Flows. It is Alcoa’s policy to fund amounts for defined benefit pension plans sufficient to meet the minimum requirements set forth in each applicable country’s benefits laws and tax laws, including the Employee Retirement Income Security Act of 1974 (ERISA) for U.S. plans. From time to time, the Company contributes additional amounts as deemed appropriate.

Under ERISA regulations, a plan sponsor that establishes a pre-funding balance by making discretionary contributions to a U.S. defined benefit pension plan may elect to apply all or a portion of this balance toward its minimum required contribution obligations to the related plan in future years.

In the first and second quarters of 2024, management made such elections related to the Company’s U.S. plans and intends to do so for the remainder of 2024. As a result, Alcoa’s minimum required contribution to defined benefit pension plans in 2024 is estimated to be approximately $18, of which approximately $4 was contributed to non-U.S. plans during the second quarter of 2024. In the six-month period of 2024, $10 was contributed to non-U.S. plans.

In the second quarter of 2023, $5 was contributed to non-U.S. plans. In six-month period of 2023, $9 was contributed to non-U.S. plans.