Pension Benefits

3 Months Ended

Mar. 31, 2020

Retirement Benefits [Abstract]

Pension Benefits

PENSION BENEFITS

The Company sponsors defined benefit pension plans for certain employees and retirees outside of the U.S. Using appropriate actuarial methods and assumptions, the Company’s defined benefit pension plans are accounted for in accordance with FASB ASC Topic 715, Compensation—Retirement Benefits. The Company’s primary non-U.S. plans are located in the United Kingdom (“U.K.”), France and Mexico. The U.K. and certain Mexican plans are funded. In addition, the Company has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period. Delphi Technologies does not have any U.S. pension assets or liabilities.

Effective March 31, 2019, the Company froze future accruals for nearly all U.K. based employees under the related defined benefit plans, replacing them with contributions under defined contribution plans effective April 1, 2019, including additional contributions and other payments to impacted employees over a two-year transition period. As a result of this change, the Company realized a one-time reduction to its pension obligation of $33 million, along with a one-time charge of $15 million in the three months ended March 31, 2019, related to curtailing the defined benefit pension plans in the U.K. For the three months ended March 31, 2020 and 2019, the Company also recognized a charge of $2 million and $7 million, respectively, related to transitional payments to impacted employees. The Company excluded these charges, and expects to exclude related future charges, from our calculation of Adjusted Operating Income.

The amounts shown below reflect the non-U.S. plans’ defined benefit pension (income) expense for the three months ended March 31, 2020 and 2019:

	Three Months Ended March 31,
	2020			2019
	(in millions)
Service cost	$	2		$	7
Interest cost	7			9
Expected return on plan assets	(11		)	(14		)
Curtailment loss	—			15
Amortization of actuarial losses	2			4
Net periodic benefit cost	$	—		$	21

Other postretirement benefit obligations were $1 million and $1 million at March 31, 2020 and December 31, 2019, respectively.