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Employee Benefits | 9 Months Ended
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Sep. 30, 2022
Retirement Benefits [Abstract] |
Employee Benefits | Employee Benefits For detailed description of the various defined benefit pension plans (qualified and non-qualified), post-retirement benefits plans and defined contribution plan we sponsor, see Note 11—Employee Benefits to the consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. As of January 1, 2022, we spun off a new pension plan (the "Lumen Pension Plan") from the Lumen Combined Pension Plan (the "Combined Pension Plan") in anticipation of the sale of the ILEC business, as described further in Note 2—Recently Completed Divestitures of the Latin American and ILEC Businesses. The Lumen Pension Plan covers approximately 2,500 active plan participants along with 19,000 other participants. At the time of the spin-off, the Lumen Pension Plan had a pension benefit obligation of $2.5 billion and assets of $2.2 billion. In addition, the December 31, 2021 actuarial (loss) gain and prior service cost included in accumulated other comprehensive loss was allocated between the Lumen Pension Plan and the Lumen Combined Pension Plan. Following a revaluation of the pension obligation and pension assets for the Lumen Pension Plan, in preparation for the closing of the sale of the ILEC business, we contributed approximately $319 million of cash to the Lumen Pension Plan trust to fully fund the pension plan in September 2022. The amounts allocated to the Lumen Pension Plan were subject to adjustment up to the closing of the sale of the ILEC business on October 3, 2022, at which time the plan was transferred along with the rest of the assets and liabilities of the ILEC business. We recognized pension costs related to both plans through the sale of the ILEC business, at which time balances related to the Lumen Pension Plan will be reflected in the calculation of our gain on the sale of the business. Net periodic benefit (income) expense for the Combined Pension Plan and the Lumen Pension Plan (together the "Pension Plans") includes the following components:
| Pension Plans
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (Dollars in millions)
Service cost | $ | 11 |  |  | 14 |  |  | 34 |  |  | 42 |
Interest cost | 53 |  |  | 49 |  |  | 155 |  |  | 148 |
Expected return on plan assets | (100) |  |  | (138) |  |  | (302) |  |  | (414) |
Settlement charges | — |  |  | 57 |  |  | — |  |  | 57 |
Recognition of prior service credit | (3) |  |  | (2) |  |  | (8) |  |  | (7) |
Recognition of actuarial loss | 32 |  |  | 49 |  |  | 99 |  |  | 147 |
Net periodic pension (income) expense | $ | (7) |  |  | 29 |  |  | (22) |  |  | (27) |
Net periodic benefit expense for our post-retirement benefit plans includes the following components:
| Post-Retirement Benefit Plans
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (Dollars in millions)
Service cost | $ | 3 |  |  | 4 |  |  | 8 |  |  | 11 |
Interest cost | 15 |  |  | 12 |  |  | 45 |  |  | 35 |
Recognition of prior service cost | 1 |  |  | 3 |  |  | 5 |  |  | 11 |
Recognition of actuarial loss | — |  |  | 2 |  |  | — |  |  | 4 |
Net periodic post-retirement benefit expense | $ | 19 |  |  | 21 |  |  | 58 |  |  | 61 |
Service costs for our Pension Plans and post-retirement benefit plans are included in the cost of services and products and selling, general and administrative line items on our consolidated statements of operations and all other costs listed above are included in other (expense) income, net on our consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021. Our Pension Plans contain provisions that allow us, from time to time, to offer lump sum payment options to certain former employees in settlement of their future retirement benefits. We record an accounting settlement charge, consisting of the recognition of certain deferred costs of the pension plan associated with these lump sum payments, only if, in the aggregate, they exceed or are probable to exceed the sum of the annual service and interest costs for the plan’s net periodic pension benefit cost, which represents the settlement accounting threshold. The amount of any future non-cash settlement charges will be dependent on several factors, including the total amount of our future lump sum benefit payments. Benefits paid by the Combined Pension Plan are paid through a trust that holds the plan's assets. Benefit payments for the Lumen Pension Plan were made from the Combined Pension Plan trust through May of 2022, and from the Lumen Pension Plan trust starting in June of 2022. The amount of required contributions to the Combined Pension Plan in 2022 and beyond will depend on a variety of factors, most of which are beyond our control, including earnings on plan investments, prevailing interest rates, demographic experience, changes in plan benefits and changes in funding laws and regulations. Based on current laws and circumstances, we do not believe we are required to make any additional contributions to the Combined Pension Plan in 2022, and we do not expect to make voluntary contributions to the trust for the Combined Pension Plan in 2022.

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