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PENSIONS AND OTHER POSTRETIREMENT BENEFITS | 9 Months Ended
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Sep. 30, 2022
Postemployment Benefits [Abstract] |
PENSIONS AND OTHER POSTRETIREMENT BENEFITS | NOTE 10 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS We offer defined benefit pension plans, defined contribution pension plans and OPEB plans to a significant portion of our employees and retirees. Benefits are also provided through multiemployer plans for certain union members. The following are the components of defined benefit pension and OPEB costs (credits): Defined Benefit Pension Costs (Credits)
| (In Millions)
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Service cost | $ | 11 |  |  | $ | 14 |  |  | $ | 35 |  |  | $ | 42 |
Interest cost | 32 |  |  | 26 |  |  | 95 |  |  | 78 |
Expected return on plan assets | (93) |  |  | (89) |  |  | (277) |  |  | (269) |
Amortization: |  |  |  |  |  |  |
Prior service costs | 1 |  |  | 1 |  |  | 1 |  |  | 1 |
Net actuarial loss | 4 |  |  | 8 |  |  | 11 |  |  | 24 |
Net periodic benefit credits | $ | (45) |  |  | $ | (40) |  |  | $ | (135) |  |  | $ | (124) |
OPEB Costs (Credits)
| (In Millions)
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Service cost | $ | 11 |  |  | $ | 13 |  |  | $ | 32 |  |  | $ | 38 |
Interest cost | 19 |  |  | 19 |  |  | 59 |  |  | 56 |
Expected return on plan assets | (10) |  |  | (10) |  |  | (29) |  |  | (30) |
Amortization: |  |  |  |  |  |  |
Prior service costs (credits) | 1 |  |  | (2) |  |  | 1 |  |  | (2) |
Net actuarial loss (gain) | (3) |  |  | 1 |  |  | (9) |  |  | 3 |
Net periodic benefit costs | $ | 18 |  |  | $ | 21 |  |  | $ | 54 |  |  | $ | 65 |
Based on funding requirements, we made $1 million defined benefit pension contributions for both the three and nine months ended September 30, 2022. Based on funding requirements, we made defined benefit pension contributions of $1 million and $154 million for the three and nine months ended September 30, 2021, respectively. As a result of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) enacted on March 27, 2020, we defer red $118 million of 2020 pension contributions, which were paid on January 4, 2021. We made contributions to our voluntary employee benefit association trust pla ns of $24 million and $80 million f or the three and nine months ended September 30, 2022, respectively, and $22 million and $27 million for the three and nine months ended September 30, 2021, respectively. USW Labor Agreement - Legacy Mining Operations On September 30, 2022, a new 47-month labor agreement with the USW was ratified. The contract became effective on October 1, 2022, and covers approximately 2,000 USW-represented employees at our United Taconite, Hibbing Taconite, Tilden and Empire mines. For the affected defined benefit pension plans, we agreed to increase the pre-2023 service multiplier to $115 and the service multiplier applicable to service beginning in 2023 to $126 for retirements after January 1, 2023. For the affected OPEB plans, we introduced a new Medicare Advantage plan to the Medicare-eligible retirees. Effective January 1, 2023, all Medicare-eligible retirees covered under this agreement will switch to this plan. The Medicare Advantage plan will offer similar benefits to the previous healthcare plan but will have significantly lower premiums due to increased government subsidies and our successful use of scale to negotiate better healthcare rates with our vendors. As a result of the increase in pension benefit and conversion to the Medicare Advantage offering, we were required to remeasure the plan assets and benefit obligations for the affected plans as of September 30, 2022. The remeasurement reflects updates for plan amendments, discount rates, assets values and other actuarial assumptions as of the remeasurement date. The funded status of the affected defined benefit pension plans improved $38 million as a result of the remeasurement. Actuarial gains on the pension benefit obligations amounted to $247 million, offset by plan amendment losses of $32 million and actual plan asset losses that were $177 million lower than the estimated returns on assets. The actuarial gain is primarily due to the increase in the weighted average discount rate used to measure the benefit obligations from 2.97% at December 31, 2021 to 5.64% at the remeasurement date. The plan amendment loss is attributable to the service multiplier increase. The funded status of the affected OPEB plans improved $81 million as a result of the remeasurement. Actuarial gains and plan amendment gains on the benefit obligations amounted to $76 million and $86 million, respectively, and were offset by actual plan asset losses that were $81 million lower than the estimated returns on assets. The actuarial gain is primarily due to the increase in the weighted average discount rate used to measure the benefit obligations from 2.91% at December 31, 2021 to 5.64% at the remeasurement date. The plan amendment gain is attributable to the implementation of the new Medicare Advantage offering. Our expected net periodic benefit credit will decrease $3 million to $104 million for the full-year 2022 as a result of the remeasurements.

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