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EMPLOYEE BENEFITS
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
EMPLOYEE BENEFITS
NOTE 14 - EMPLOYEE BENEFITS
Pension Plans
Citizens maintains a non-contributory pension plan (the “Qualified Plan”) that was closed to new hires and re-hires effective January 1, 2009, and frozen to all participants effective December 31, 2012. Benefits under the Qualified Plan are based on employees’ years of service and highest 5-year average of eligible compensation. The Qualified Plan is funded on a current basis, in compliance with the requirements of ERISA. Citizens also provides an unfunded, non-qualified supplemental retirement plan (the “Non-Qualified Plan”), which was closed and frozen effective December 31, 2012. The Company’s Qualified Plan and Non-Qualified Plan are collectively referred to as the Company’s “Pension Plans”. The Pension Plans’ investments include equity-oriented and fixed income-oriented investments, including but not limited to government obligations, corporate bonds, and common and collective equity and fixed income funds.
The following table presents changes in the fair value of the Company’s Pension Plans’ assets, projected benefit obligation, funded status, and accumulated benefit obligation:
 
Year Ended December 31,
 
Qualified Plan
 
Non-Qualified Plan
(in millions)
2019

 
2018

 
2019

 
2018

Fair value of plan assets as of January 1

$1,050

 

$1,139

 

$—

 

$—

Actual return on plan assets
259

 
(81
)
 
—

 
—

Employer contributions
—

 
50

 
8

 
8

Benefits and administrative expenses paid
(63
)
 
(58
)
 
(8
)
 
(8
)
Fair value of plan assets as of December 31
1,246

 
1,050

 
—

 
—

Projected benefit obligation
1,075

 
972

 
102

 
95

Pension asset (obligation)

$171

 

$78

 

($102
)
 

($95
)
Accumulated benefit obligation

$1,075

 

$972

 

$102

 

$95


The Company’s projected benefit obligation increased for the year ending December 31, 2019, due to the decrease in the discount rate assumption, partially offset by updated mortality assumptions. Citizens recognized actuarial gains and losses on the Pension Plans in AOCI resulting in an ending balance of $551 million and $618 million at December 31, 2019 and 2018, respectively.
No contributions were made to the Qualified Plan in 2019 and no contribution is planned for 2020. Citizens contributed $50 million to the qualified plan in 2018. Citizens contributed $8 million to the Non-Qualified Plan in 2019 and expects to contribute $8 million in 2020.
The following table presents other changes in plan assets and benefit obligations recognized in OCI for the Company’s Pension Plans:
 
Year Ended December 31,
(in millions)
2019

 
2018

 
2017

Net periodic pension income

($5
)
 

($16
)
 

($2
)
Net actuarial (gain) loss
(49
)
 
49

 
(31
)
Amortization of prior service credit
—

 
1

 
1

Amortization of net actuarial loss
(19
)
 
(17
)
 
(18
)
Total (loss) gain recognized in other comprehensive loss
(68
)
 
33

 
(48
)
Total (loss) gain recognized in net periodic pension (income) cost and other comprehensive loss

($73
)
 

$17

 

($50
)

Costs under the Company’s Pension Plans are actuarially computed and include current service costs and amortization of prior service costs over the participants’ average future working lifetime. The actuarial cost method used in determining the net periodic pension cost is the projected unit method.    

The following table presents the components of net periodic pension (income) cost for the Company’s Pension Plans:
 
Year Ended December 31,
 
Qualified Plan
 
Non-Qualified Plan
 
Total
(in millions)
2019

 
2018

 
2017

 
2019

 
2018

 
2017

 
2019

 
2018

 
2017

Service cost

$3

 

$3

 

$3

 

$—

 

$—

 

$—

 

$3

 

$3

 

$3

Interest cost
41

 
39

 
42

 
4

 
4

 
4

 
45

 
43

 
46

Expected return on plan assets
(72
)
 
(79
)
 
(69
)
 
—

 
—

 
—

 
(72
)
 
(79
)
 
(69
)
Amortization of actuarial loss
17

 
15

 
16

 
2

 
2

 
2

 
19

 
17

 
18

Net periodic pension (income) cost(1)

($11
)
 

($22
)
 

($8
)
 

$6

 

$6

 

$6

 

($5
)
 

($16
)
 

($2
)

(1) In the Consolidated Statements of Operations, service cost is presented in salaries and employee benefits, and all other components of net periodic pension (income) cost are presented in other operating expense.

The following table presents the expected future benefit payments for the Company’s Pension Plans:
 
(in millions)

Expected benefit payments by fiscal year ending:
 
December 31, 2020

$67

December 31, 2021
68

December 31, 2022
68

December 31, 2023
68

December 31, 2024
69

December 31, 2025 - 2029
348


401(k) Plan
Citizens sponsors a 401(k) Plan under which employee tax-deferred/Roth after-tax contributions to the 401(k) Plan are matched by the Company after completion of one year of service. Contributions are matched at 100% up to an overall limitation of 4% on a pay period basis. Substantially all employees will receive an additional 2% of earnings after completion of one year of service, subject to limits set by the Internal Revenue Service. Amounts contributed and expensed by the Company were $72 million in 2019 compared to $68 million in 2018 and $61 million in 2017.