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Pension and Other Postretirement Benefits (Tables) | 12 Months Ended
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Dec. 31, 2019
Retirement Benefits [Abstract] |
Schedule of Obligations and Funded Status | Obligations and Funded Status
| Pension benefits |  | Other postretirement benefits
December 31, | 2019 |  | 2018 |  | 2019 |  | 2018
Change in benefit obligation |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 6,476 |  |  | $ | 7,359 |  |  | $ | 806 |  |  | $ | 927 |
Service cost | 25 |  |  | 46 |  |  | 7 |  |  | 7 |
Interest cost | 235 |  |  | 219 |  |  | 28 |  |  | 28 |
Amendments | — |  |  | 18 |  |  | (78 | ) |  | (25 | )
Actuarial losses (gains) | 974 |  |  | (372 | ) |  | 100 |  |  | (51 | )
Settlements | (23 | ) |  | (146 | ) |  | — |  |  | — |
Curtailments | — |  |  | (154 | ) |  | — |  |  | — |
Benefits paid | (477 | ) |  | (422 | ) |  | (82 | ) |  | (86 | )
Medicare Part D subsidy receipts | — |  |  | — |  |  | 5 |  |  | 6 |
Foreign currency translation impact | 39 |  |  | (72 | ) |  | — |  |  | — |
Benefit obligation at end of year(1) | $ | 7,249 |  |  | $ | 6,476 |  |  | $ | 786 |  |  | $ | 806 |
Change in plan assets(1) |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $ | 4,334 |  |  | $ | 4,862 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets | 731 |  |  | (144 | ) |  | — |  |  | — |
Employer contributions | 268 |  |  | 298 |  |  | — |  |  | — |
Benefits paid | (453 | ) |  | (397 | ) |  | — |  |  | — |
Administrative expenses | (34 | ) |  | (33 | ) |  | — |  |  | — |
Settlements | (22 | ) |  | (178 | ) |  | — |  |  | — |
Foreign currency translation impact | 44 |  |  | (74 | ) |  | — |  |  | — |
Fair value of plan assets at end of year(1) | $ | 4,868 |  |  | $ | 4,334 |  |  | $ | — |  |  | $ | — |
Net funded status | $ | (2,381 | ) |  | $ | (2,142 | ) |  | $ | (786 | ) |  | $ | (806 | )
Amounts recognized in the Consolidated Balance Sheet consist of: |  |  |  |  |  |  |
Noncurrent assets | $ | 104 |  |  | $ | 111 |  |  | $ | — |  |  | $ | — |
Current liabilities | (25 | ) |  | (23 | ) |  | (72 | ) |  | (83 | )
Noncurrent liabilities | (2,460 | ) |  | (2,230 | ) |  | (714 | ) |  | (723 | )
Net amount recognized | $ | (2,381 | ) |  | $ | (2,142 | ) |  | $ | (786 | ) |  | $ | (806 | )
Amounts recognized in Accumulated Other Comprehensive Loss consist of: |  |  |  |  |  |  |
Net actuarial loss | $ | 3,375 |  |  | $ | 2,957 |  |  | $ | 179 |  |  | $ | 87 |
Prior service cost (benefit) | 1 |  |  | 3 |  |  | (37 | ) |  | (27 | )
Net amount recognized, before tax effect | $ | 3,376 |  |  | $ | 2,960 |  |  | $ | 142 |  |  | $ | 60 |
Other changes in plan assets and benefit obligations recognized in Other Comprehensive Loss consist of: |  |  |  |  |  |  |
Net actuarial loss (gain) | $ | 566 |  |  | $ | (19 | ) |  | $ | 100 |  |  | $ | (52 | )
Amortization of accumulated net actuarial loss | (148 | ) |  | (264 | ) |  | (8 | ) |  | (7 | )
Prior service cost (benefit) | — |  |  | 19 |  |  | (78 | ) |  | (25 | )
Amortization of prior service (cost) benefit | (2 | ) |  | (26 | ) |  | 68 |  |  | 35 |
Net amount recognized, before tax effect | $ | 416 |  |  | $ | (290 | ) |  | $ | 82 |  |  | $ | (49 | )
(1) At December 31, 2019, the benefit obligation, fair value of plan assets, and funded status for U.S. pension plans were $5,884, $3,513, and $(2,371), respectively. At December 31, 2018, the benefit obligation, fair value of plan assets, and funded status for U.S. pension plans were $5,282, $3,123, and $(2,159) respectively.
Schedule of Pension Plan Benefit Obligations | Pension Plan Benefit Obligations
| Pension benefits
| 2019 |  | 2018
The projected benefit obligation and accumulated benefit obligation for all defined benefit pension plans were as follows: |  |  |
Projected benefit obligation | $ | 7,249 |  |  | $ | 6,476 |
Accumulated benefit obligation | 7,219 |  |  | 6,444 |
The aggregate projected benefit obligation and fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets was as follows: |  |  |
Projected benefit obligation | 6,064 |  |  | 5,435 |
Fair value of plan assets | 3,579 |  |  | 3,182 |
The aggregate accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets was as follows: |  |  |
Accumulated benefit obligation | 6,045 |  |  | 5,415 |
Fair value of plan assets | 3,579 |  |  | 3,179 |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost
| Pension benefits(1) |  | Other postretirement benefits(2)
For the year ended December 31, | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
Service cost | $ | 25 |  |  | $ | 46 |  |  | $ | 90 |  |  | $ | 7 |  |  | $ | 7 |  |  | $ | 7 |
Interest cost | 235 |  |  | 219 |  |  | 234 |  |  | 28 |  |  | 28 |  |  | 30 |
Expected return on plan assets | (286 | ) |  | (306 | ) |  | (332 | ) |  | — |  |  | — |  |  | — |
Recognized net actuarial loss | 139 |  |  | 168 |  |  | 220 |  |  | 4 |  |  | 7 |  |  | 5 |
Amortization of prior service cost (benefit) | 2 |  |  | 3 |  |  | 5 |  |  | (6 | ) |  | (7 | ) |  | (8 | )
Settlements(3) | 9 |  |  | 96 |  |  | — |  |  | — |  |  | — |  |  | — |
Curtailments(4) | — |  |  | 23 |  |  | — |  |  | (58 | ) |  | (28 | ) |  | — |
Net periodic benefit cost(5) | $ | 124 |  |  | $ | 249 |  |  | $ | 217 |  |  | $ | (25 | ) |  | $ | 7 |  |  | $ | 34 |
(1) | In 2019, 2018 and 2017, net periodic benefit cost for U.S. pension plans was $127, $239, and $206, respectively.
(2) | In 2019, 2018 and 2017, net periodic benefit cost for other postretirement benefits reflects a reduction of $11, $10, and $11, respectively, related to the recognition of the federal subsidy awarded under Medicare Part D.
(3) | In 2019 and 2018, settlements were due to workforce reductions (see Note C) and the payment of lump sum benefits.
(4) | In 2019 and 2018, curtailments were due to a reduction of future benefits, resulting in the recognition of favorable and unfavorable plan amendments.
(5) Service cost was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and development expenses; curtailments and settlements were included in Restructuring and other charges; and all other cost components were recorded in Other expense (income), net in the Statement of Consolidated Operations.
Amounts Expected to be Recognized in Net Periodic Benefit Cost | Amounts Expected to be Recognized in Net Periodic Benefit Cost
| Pension benefits |  | Other postretirement benefits
December 31, | 2020 |  | 2020
Net actuarial loss recognition | $ | 176 |  |  | $ | 8 |
Prior service cost (benefit) recognition | — |  |  | (7 | )
Schedule of Weighted Average Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit Cost | Weighted average assumptions used to determine net periodic benefit cost for U.S. pension and other postretirement benefit plans were as follows (assumptions for non-U.S. plans did not differ materially):
| 2019 |  | 2018 |  | 2017
Discount rate to calculate service cost(1) | 4.35 | % |  | 3.75 | % |  | 4.20 | %
Discount rate to calculate interest cost(1) | 4.00 |  |  | 3.30 |  |  | 3.60 |
Expected long-term rate of return on plan assets | 7.00 |  |  | 7.00 |  |  | 7.75 |
Rate of compensation increase | 3.50 |  |  | 3.50 |  |  | 3.50 |
Cash balance plan interest crediting rate | 3.00 |  |  | 3.00 |  |  | 3.00 |
(1) In all periods presented, the respective discount rates were used to determine net periodic benefit cost for most U.S. pension plans for the full annual period. However, the discount rates for a limited number of plans were updated during 2019, 2018, and 2017 to reflect the remeasurement of these plans due to new union labor agreements, settlements, and/or curtailments. The updated discount rates used were not significantly different from the discount rates presented. Assumptions Weighted average assumptions used to determine benefit obligations for U.S. pension and other postretirement benefit plans were as follows (assumptions for non-U.S. plans did not differ materially):
December 31, | 2019 |  | 2018
Discount rate | 3.30 | % |  | 4.35 | %
Rate of compensation increase | — |  |  | 3.50 |
Cash balance plan interest crediting rate | 3.00 |  |  | 3.00 |
Schedule of Assumed Health Care Cost Trend Rates | Assumed health care cost trend rates for U.S. other postretirement benefit plans were as follows (assumptions for non-U.S. plans did not differ materially):
| 2019 |  | 2018 |  | 2017
Health care cost trend rate assumed for next year | 5.50 | % |  | 5.50 | % |  | 5.50 | %
Rate to which the cost trend rate gradually declines | 4.50 |  |  | 4.50 |  |  | 4.50 |
Year that the rate reaches the rate at which it is assumed to remain | 2023 |  |  | 2022 |  |  | 2021 |
Assumed health care cost trend rates have an effect on the amounts reported for the health care plan. A one-percentage point change in these assumed rates would have the following effects:
| 1% increase |  | 1% decrease
Effect on other postretirement benefit obligations | $ | 23 |  |  | $ | (22 | )
Effect on total of service and interest cost components | 1 |  |  | (1 | )
Schedule of Fair Value of Pension Plan Assets | The following table presents the fair value of pension plan assets classified under the appropriate level of the fair value hierarchy or net asset cost:
December 31, 2019 | Level 1 |  | Level 2 |  | Net asset value |  | Total
Equities: |  |  |
Equity securities | $ | 590 |  |  | $ | — |  |  | $ | 508 |  |  | $ | 1,098 |
Long/short equity hedge funds | — |  |  | — |  |  | 260 |  |  | 260 |
Private equity | — |  |  | — |  |  | 155 |  |  | 155 |
| $ | 590 |  |  | $ | — |  |  | $ | 923 |  |  | $ | 1,513 |
Fixed income: |  |  |
Intermediate and long duration government/credit | $ | 121 |  |  | $ | 1,047 |  |  | $ | 1,003 |  |  | $ | 2,171 |
Other | 126 |  |  | 7 |  |  | 144 |  |  | 277 |
| $ | 247 |  |  | $ | 1,054 |  |  | $ | 1,147 |  |  | $ | 2,448 |
Other investments: |  |  |
Real estate | $ | 104 |  |  | $ | — |  |  | $ | 165 |  |  | $ | 269 |
Discretionary and systematic macro hedge funds | — |  |  | — |  |  | 405 |  |  | 405 |
Other | — |  |  | — |  |  | 240 |  |  | 240 |
| $ | 104 |  |  | $ | — |  |  | $ | 810 |  |  | $ | 914 |
Net plan assets(1) | $ | 941 |  |  | $ | 1,054 |  |  | $ | 2,880 |  |  | $ | 4,875 |
December 31, 2018 | Level 1 |  | Level 2 |  | Net Asset Value |  | Total
Equities |  |  |  |  |  |  |
Equity securities | $ | 318 |  |  | $ | — |  |  | $ | 578 |  |  | $ | 896 |
Long/short equity hedge funds | — |  |  | — |  |  | 232 |  |  | 232 |
Private equity | — |  |  | — |  |  | 147 |  |  | 147 |
| $ | 318 |  |  | $ | — |  |  | $ | 957 |  |  | $ | 1,275 |
Fixed income: |  |  |  |  |  |  |
Intermediate and long duration government/credit | $ | 200 |  |  | $ | 934 |  |  | $ | 770 |  |  | $ | 1,904 |
Other | 9 |  |  | 9 |  |  | 152 |  |  | 170 |
| $ | 209 |  |  | $ | 943 |  |  | $ | 922 |  |  | $ | 2,074 |
Other investments: |  |  |  |  |  |  |
Real estate | $ | 81 |  |  | $ | — |  |  | $ | 164 |  |  | $ | 245 |
Discretionary and systematic macro hedge funds | — |  |  | — |  |  | 471 |  |  | 471 |
Other | 56 |  |  | — |  |  | 212 |  |  | 268 |
| $ | 137 |  |  | $ | — |  |  | $ | 847 |  |  | $ | 984 |
Net plan assets(2) | $ | 664 |  |  | $ | 943 |  |  | $ | 2,726 |  |  | $ | 4,333 |
(1) | As of December 31, 2019, the total fair value of pension plans’ assets excludes a net payable of $7, which represents securities purchased and sold but not yet settled plus interest and dividends earned on various investments.
(2) | As of December 31, 2018, the total fair value of pension plans’ assets excludes a net receivable of $1, which represents securities purchased and sold but not yet settled plus interest and dividends earned on various investments.
Schedule of Pension and Postretirement Plans Investment Policy and Weighted Average Asset Allocations | Arconic’s pension plans’ investment policy and weighted average asset allocations at December 31, 2019 and 2018, by asset class, were as follows:
|  | Plan assets at December 31,
Asset class | Policy range | 2019 |  | 2018
Equities | 20–55% | 31 | % |  | 29 | %
Fixed income | 25–55% | 50 |  |  | 48 |
Other investments | 15–35% | 19 |  |  | 23 |
Total |  | 100 | % |  | 100 | %
Schedule of Benefit Payments Expected to be Paid and Expected Medicare Part D Subsidy Receipts | Benefit payments expected to be paid to pension and other postretirement benefit plans’ participants and expected Medicare Part D subsidy receipts are as follows utilizing the current assumptions outlined above:
For the year ended December 31, | Pension benefits paid |  | Gross Other post- retirement benefits |  | Medicare Part D subsidy receipts |  | Net Other post- retirement benefits
2020 | $ | 470 |  |  | $ | 80 |  |  | $ | 5 |  |  | $ | 75 |
2021 | 465 |  |  | 80 |  |  | 5 |  |  | 75 |
2022 | 460 |  |  | 80 |  |  | 5 |  |  | 75 |
2023 | 455 |  |  | 80 |  |  | 5 |  |  | 75 |
2024 | 450 |  |  | 75 |  |  | 5 |  |  | 70 |
Thereafter | 2,120 |  |  | 260 |  |  | 25 |  |  | 235 |
| $ | 4,420 |  |  | $ | 655 |  |  | $ | 50 |  |  | $ | 605 |

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