Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2019

Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract]

Pension and Other Postretirement Benefits

I. Pension and Other Postretirement Benefits – The components of net periodic benefit cost were as follows:

	Third quarter ended September 30,						Nine months ended September 30,
Pension benefits	2019			2018			2019			2018
Service cost	$	12		$	13		$	36		$	41
Interest cost(1)		55			56			167			170
Expected return on plan assets(1)		(81	)		(84	)		(244	)		(256	)
Recognized net actuarial loss(1)		43			47			127			154
Amortization of prior service cost(1)		1			2			4			6
Settlements(2)		5			232			5			399
Curtailments(2)		—			—			38			5
Net periodic benefit cost	$	35		$	266		$	133		$	519

	Third quarter ended September 30,					Nine months ended September 30,
Other postretirement benefits	2019		2018			2019		2018
Service cost	$	1	$	2		$	3	$	4
Interest cost(1)		10		8			28		26
Recognized net actuarial loss(1)		2		3			7		10
Amortization of prior service benefit(1)		—		—			—		(1	)
Settlements(2)		—		(56	)		—		(56	)
Curtailments(2)		—		—			—		(28	)
Net periodic benefit cost	$	13	$	(43	)	$	38	$	(45	)

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

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

Plan Actions. In 2019, management initiated the following actions to certain pension plans:

Action# 1 – In June 2019, the Company entered into a new, six-year collective bargaining agreement with the National Union of Aluminum Employees of Baie-Comeau. Under the agreement, all Canadian union employees that are participants in one of the Company’s defined benefit pension plans will cease accruing retirement benefits for future service effective January 1, 2021. This change will affect approximately 700 employees, who are targeted to be transitioned to a target benefit plan, where the funding risk is assumed by the employees. The Company will contribute approximately 12% of these participants’ eligible earnings on an annual basis. The Company will also contribute additional contributions of approximately $2 spread over a three-year period to improve the financial position of the newly established target benefit plan. Participants already collecting benefits or who terminated with a vested benefit under the defined benefit pension plan are not affected by these changes.

Action# 2 – In July 2019, the Company entered into a new, six-year collective bargaining agreement with the United Steelworkers representing the employees of Aluminerie de Bécancour Inc. Under the agreement, all Canadian union employees that are participants in one of the Company’s defined benefit pension plans ceased accruing retirement benefits for future service effective July 21, 2019. This change affected approximately 900 employees, who were transitioned to a member-funded pension plan, where the funding risk is assumed by the employees. The Company will contribute approximately 12% of these participants’ eligible earnings on an annual basis. To improve the financial positions of both the existing defined benefit pension plan and newly established member-funded pension plan, the Company will contribute approximately $5 in 2020 to the existing defined benefit pension plan and approximately $2 spread over a five-year period to the newly established member-funded pension plan. Participants already collecting benefits or who terminated with a vested benefit under the defined benefit pension plan are not affected by these changes.

The above actions caused the respective plans to be remeasured, including an update to the discount rates used to determine the benefit obligations of the affected plans. The following table presents certain information and the financial impacts of these actions on the accompanying Consolidated Financial Statements:

Action#	Number of affected plan participants	Weighted average discount rate as of December 31, 2018	Plan remeasurement date	Weighted average discount rate as of plan remeasurement date	Increase to accrued pension benefits liability		Curtailment charge(1)
1	~700	3.85%	May 31, 2019	3.15%	$	52	$	38
2	~900	3.80%	June 30, 2019	3.00%	$	23	$	—

⁽¹⁾ These amounts represent the accelerated amortization of a portion of the existing prior service cost and was reclassified from Accumulated other comprehensive loss to Restructuring and other charges, net (see Note C) on the accompanying Statement of Consolidated Operations.