v3.20.1

Pension and Other Postretirement Benefits | 3 Months Ended
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Mar. 31, 2020
Retirement Benefits [Abstract] |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits​ Certain employees of the Arconic Corporation Businesses participate in ParentCo-sponsored defined benefit pension plans (“Shared Pension Plans”) and health care and life insurance postretirement benefit plans (“Shared OPEB Plans,” and, collectively with the Shared Pension Plans, the “Shared Plans”), which include ParentCo corporate participants and participants of the Howmet Aerospace Businesses, as well as eligible U.S. retired employees and certain retirees from foreign locations. Pension benefits under the Shared Pension Plans generally depend on length of service, job grade, and remuneration. Substantially all benefits are paid through pension trusts that are sufficiently funded to ensure that all plans can pay benefits to retirees as they become due. Most salaried and non-bargaining hourly U.S. employees hired after March 1, 2006 participate in a defined contribution plan instead of a defined benefit plan. Additionally, effective April 1, 2018, benefit accruals for future service and compensation under all ParentCo’s qualified and non-qualified defined benefit pension plans for salaried and non-bargaining hourly U.S. employees ceased. Furthermore, effective February 1, 2019, benefit accruals for future service and compensation under ParentCo’s defined benefit pension plans for all employees in the United Kingdom ceased. Generally, ParentCo’s health care plans are unfunded and pay a percentage of medical expenses, reduced by deductibles and other coverage. Life benefits are generally provided by insurance contracts. ParentCo retains the right, subject to existing agreements, to change or eliminate these benefits. All salaried and certain non-bargaining hourly U.S. employees hired after January 1, 2002 and certain bargaining hourly U.S. employees hired after July 1, 2010 are not eligible for postretirement health care benefits. Additionally, all salaried and certain hourly U.S. employees that retire on or after April 1, 2008 are not eligible for postretirement life insurance benefits. Furthermore, ParentCo initiated the following actions between the second half of 2018 and the first half of 2019: (i) effective December 31, 2018, ParentCo terminated all pre-Medicare medical, prescription drug, and vision coverage for current and future salaried and non-bargaining hourly U.S. employees and retirees of ParentCo and its subsidiaries, (ii) effective May 1, 2019, ParentCo eliminated the life insurance benefit for salaried and non-bargaining hourly U.S. retirees of ParentCo and its subsidiaries, and (iii) effective December 31, 2019, ParentCo eliminated certain health care subsidies for salaried and non-bargaining hourly U.S. retirees of ParentCo and its subsidiaries. Arconic Corporation accounts for the portion of the Shared Plans related to its employees as multiemployer benefit plans. Accordingly, Arconic Corporation does not record an asset or liability to recognize the funded status of the Shared Plans. However, the related pension and other postretirement benefit expenses attributable to Arconic Corporation are based primarily on pensionable compensation of active Arconic Corporation participants and estimated interest costs, respectively. The accompanying Combined Financial Statements also include an allocation of pension and other postretirement benefit expenses for the Shared Plans attributable to ParentCo corporate participants as well as to closed and sold operations (see Cost Allocations in Note A). Certain ParentCo plans that are specific only to Arconic Corporation employees (“Direct Plans”) are accounted for as defined benefit pension and other postretirement plans in the accompanying Combined Financial Statements. Accordingly, the funded status of each Direct Plan is recorded in the accompanying Combined Balance Sheet. Actuarial gains and losses that have not yet been recognized in earnings are recorded in Accumulated other comprehensive income until they are amortized as a component of net periodic benefit cost. The determination of benefit obligations and recognition of expenses related to Direct Plans are dependent on various assumptions, including discount rates, long-term expected rates of return on plan assets, and future compensation increases. Management develops each assumption using relevant company experience in conjunction with market-related data for each of the plans. In preparation for the Separation, effective January 1, 2020, certain U.S. pension and other postretirement benefit plans previously sponsored by ParentCo (the “U.S. Shared Plans” - see above) were separated into standalone plans for both Arconic Corporation (the “New Direct Plans,” and, collectively with the Direct Plans, the “Cumulative Direct Plans”) and Howmet Aerospace. Accordingly, on January 1, 2020, Arconic Corporation recognized an aggregate liability of $1,920, of which $60 was current, reflecting the combined net unfunded status of the New Direct Plans, comprised of a benefit obligation of $4,255 and plan assets of $2,335, as well as $1,752 (net of tax impact) in Accumulated other comprehensive loss. In 2020, Arconic Corporation expects to recognize approximately $100 in combined net periodic benefit cost, of which approximately $25 is service cost. In the 2020 first quarter, Arconic Corporation recognized $26 of combined net periodic benefit cost, of which $6 was service cost, for the New Direct Plans. Prior to January 1, 2020, Arconic Corporation recorded its share of expense related to the U.S. Shared Plans as multiemployer expense for participants of the Arconic Corporation Businesses and as an allocated expense for both ParentCo corporate participants and former employees of ParentCo’s closed and sold operations, totaling $28 in the 2019 first quarter. Also, in 2020, Arconic Corporation expects to make approximately $255 in pension contributions and $55 in other postretirement benefit payments, related to the New Direct Plans. The following table summarizes the total expenses recognized by Arconic Corporation related to the pension and other postretirement benefits described above:
​ | ​ | ​ | ​ | Pension benefits | ​ | Other postretirement benefits
​ | ​ | ​ | ​ | First quarter ended March 31, | ​ | First quarter ended March 31,
Type of Plan | ​ | Type of Expense | ​ | 2020 | ​ | 2019 | ​ | 2020 | ​ | 2019
Cumulative Direct Plans | ​ | Net periodic benefit cost | ​ | $ | 21 |  |  | $ | 1 |  |  | $ | 6 |  |  | $ | — |
Shared Plans | ​ | Multiemployer contribution | ​ | — |  |  | 16 |  |  | — |  |  | 5 |
Shared Plans | ​ | Cost allocation | ​ | (1 | ) |  | 5 |  |  | — |  |  | 1 |
​ | ​ | ​ | ​ | $ | 20 |  |  | $ | 22 |  |  | $ | 6 |  |  | $ | 6 |
The components of net periodic benefit cost for defined benefit plans classified as Cumulative Direct Plans were as follows:
First quarter ended March 31, | ​ | 2020 | ​ | 2019
Pension benefits |  |  |  |
Service cost | ​ | $ | 5 |  |  | $ | — |
Interest cost | ​ | 26 |  |  | 1 |
Expected return on plan assets | ​ | (40 | ) |  | (1 | )
Recognized net actuarial loss | ​ | 30 |  |  | 1 |
Net periodic benefit cost* | ​ | $ | 21 |  |  | $ | 1 |
Other postretirement benefits |  |  |  |
Service cost | ​ | $ | 1 |  |  | $ | — |
Interest cost | ​ | 4 |  |  | — |
Recognized net actuarial loss |  | 2 |  |  | — |
Amortization of prior service benefit | ​ | (1 | ) |  | — |
Net periodic benefit cost* | ​ | $ | 6 |  |  | $ | — |
​ __________________
* | Service cost was included within Cost of goods sold and all other cost components were included in Other expenses (income), net on the accompanying Statement of Combined Operations.

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