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Pension and Other Postretirement Benefits | 9 Months Ended
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Sep. 30, 2021
Retirement Benefits [Abstract] |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The components of net periodic cost (benefit) were as follows:
| Third quarter ended |  |  | Nine months ended
| September 30, |  |  | September 30,
| 2021 |  | 2020 |  |  | 2021 |  | 2020
Pension benefits |  |  |  |  |  |  |  |
Service cost | $ | 1 |  |  | $ | 1 |  |  |  | $ | 3 |  |  | $ | 10 |
Interest cost | 12 |  |  | 17 |  |  |  | 36 |  |  | 81 |
Expected return on plan assets | (23) |  |  | (21) |  |  |  | (69) |  |  | (115) |
Recognized net actuarial loss | 14 |  |  | 12 |  |  |  | 43 |  |  | 66 |
Settlements | 3 |  |  | 8 |  |  |  | 9 |  |  | 72 |
Net periodic cost(1) | 7 |  |  | 17 |  |  |  | 22 |  |  | 114 |
Discontinued operations | — |  |  | — |  |  |  | — |  |  | 20 |
Net amount recognized in continuing operations in Statement of Consolidated Operations | $ | 7 |  |  | $ | 17 |  |  |  | $ | 22 |  |  | $ | 94 |
Other postretirement benefits |  |  |  |  |  |  |  |
Service cost | $ | — |  |  | $ | 1 |  |  |  | $ | 1 |  |  | $ | 3 |
Interest cost | 1 |  |  | 2 |  |  |  | 4 |  |  | 9 |
Recognized net actuarial loss | 1 |  |  | — |  |  |  | 1 |  |  | 2 |
Amortization of prior service benefit | (3) |  | (2) |  |  | (7) |  |  | (5) |
Curtailments | — |  |  | (2) |  |  | — |  |  | (2) |
Net periodic (benefit) cost(1) | (1) |  |  | (1) |  |  |  | (1) |  |  | 7 |
Discontinued operations | — |  |  | — |  |  |  | — |  |  | 6 |
Net amount recognized in continuing operations in Statement of Consolidated Operations | $ | (1) |  |  | $ | (1) |  |  |  | $ | (1) |  |  | $ | 1 |
(1)Service cost for continuing operations was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and development expenses; settlements and curtailments were included in Restructuring and other charges; and all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations. The amounts included in net periodic cost (benefit) include costs related to both continuing and discontinued operations for the nine months ended September 30, 2020. Pension benefits In the third quarter of 2021, the Company applied settlement accounting to certain U.S. and Canadian pension plans due to lump sum payments made to participants, which resulted in settlement charges of $3 and $9 in the third quarter and nine months ended September 30, 2021, respectively, that were recorded in Restructuring and other charges. In October 2021, the Company undertook additional actions to reduce gross pension obligations by approximately $125 by purchasing group annuity contracts with a third-party carrier to pay and administer future annuity payments. These actions are expected to result in a settlement charge of approximately $30 and will be recorded in Restructuring and other charges in the fourth quarter ending December 31, 2021 in the Statement of Consolidated Operations. The funded status of the plans have not been significantly impacted. On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA 2021”) was signed into law in the United States. ARPA 2021, in part, provides temporary relief for employers who sponsor defined benefit pension plans related to funding contributions under the Employee Retirement Income Security Act of 1974. Considering the impact of ARPA 2021, management expects Howmet’s estimated pension contributions and other postretirement benefit payments in 2021 to be approximately $120. In the second quarter ended June 30, 2020 and nine months ended September 30, 2020, the Company undertook a number of actions to reduce pension obligations in the U.K. by offering lump sum payments to certain plan participants and entering into group annuity contracts with a third-party carrier to pay and administer future annuity payments. The Company applied settlement accounting to these U.K. pension plans which resulted in settlement charges of $62 that were recorded in Restructuring and other charges in the Statement of Consolidated Operations in the second quarter ended June 30, 2020 and nine months ended September 30, 2020. In the third quarter and nine months ended September 30, 2020, the Company also applied settlement accounting to certain Canadian, U.K., and U.S. pension plans due to lump sum payments to participants which resulted in settlement charges of $8 and $10, respectively, that were recorded in Restructuring and other charges. Other postretirement benefits In the first quarter of 2021, the Company announced a plan administration change of certain of its Medicare-eligible prescription drug benefits to an Employer Group Waiver Plan with a wrap-around secondary plan effective July 1, 2021. The administration change is expected to reduce costs to the Company through the usage of Medicare Part D and drug manufacturer subsidies. Due to this amendment, along with the associated plan remeasurements, the Company recorded a decrease to its Accrued other postretirement benefits liability of $39, which was offset in Accumulated other comprehensive loss in the Consolidated Balance Sheet. In the third quarter of 2020, the Company applied curtailment accounting due to a workforce reduction resulting in a decrease in expense of $2 which is recorded in Restructuring and other charges in the Statement of Consolidated Operations. In the second quarter of 2020, the Company communicated to plan participants that for its U.S. salaried and non-bargained hourly retirees of the Company and its subsidiaries, it would eliminate certain health care subsidies effective December 31, 2021 and that for certain bargained retirees of the Company, it would eliminate certain health care subsidies effective December 31, 2021 and the life insurance benefit effective August 1, 2020. As a result of these changes, in the second quarter of 2020, the Company recorded a decrease to the Accrued other postretirement benefits liability of $6, which was offset in Accumulated other comprehensive loss.

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