Pensions and Other Postretirement Benefits

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Pensions and Other Postretirement Benefits

Pensions and Other Postretirement Benefits

In March 2023, the Company purchased group annuity contracts that transferred to third-party insurance companies pension benefit obligations for certain of the Company’s retirees in the U.S. who were receiving their monthly retirement benefit payments from the U.S. pension plan. The amount of each affected retiree’s annuity payment is equal to the amount of such individual’s pension benefit. The purchase of group annuity contracts was funded directly by the assets of the U.S. plans. By transferring the obligations and assets to the insurance companies, the Company reduced its overall pension projected benefit obligation by $309 million and recognized a non-cash Pension settlement charge of $190 million.

The service cost component of net periodic pension and other postretirement benefit cost is included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative, and Research and development, net in the accompanying condensed consolidated statement of income. Except for the Pension settlement charge in the quarter ended March 31, 2023, all other components of net periodic benefit cost are recorded in Other income, net in the accompanying condensed consolidated statement of income.

Net periodic pension benefit cost and other postretirement benefit cost for the three months ended March 31, 2024 and 2023 was as follows:

	Pension		Other Postretirement Benefits
	Three Months Ended March 31		Three Months Ended March 31
($ in millions)	2024	2023	2024	2023
Service cost	$2	$2	$1	$1
Interest cost	26	31	6	7
Expected return on plan assets	(27)	(31)	—	—
Amortization of actuarial losses	6	7	—	—
Amortization of prior service credit	—	—	(2)	(2)
Settlement	—	190	—	—
Net periodic benefit cost	$7	$199	$5	$6

Net periodic pension cost was lower for the three months ended March 31, 2024 compared to 2023, primarily due the Pension settlement charge recognized in the first quarter 2023.

PPG expects 2024 full year net periodic pension expense of approximately $26 million and net periodic other postretirement expense of approximately $22 million.

Contributions to Defined Benefit Pension Plans

	Three Months Ended March 31
($ in millions)	2024	2023
Non-U.S. defined benefit pension mandatory contributions	$1	$1