v3.22.4

Pension and Other Postretirement Benefits (Tables) | 12 Months Ended
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Dec. 31, 2022
Retirement Benefits [Abstract] |
Schedule of Obligations and Funded Status |
|  | Pension benefits |  | Other postretirement benefits |
December 31, |  | 2022 |  | 2021 |  | 2022 |  | 2021 |
Change in benefit obligation |  |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 2,817 |  |  | $ | 4,081 |  |  | $ | 440 |  |  | $ | 514 |  |
Service cost |  | 16 |  |  | 21 |  |  | 5 |  |  | 6 |  |
Interest cost |  | 75 |  |  | 63 |  |  | 10 |  |  | 11 |  |
Amendments |  | 23 |  |  | — |  |  | — |  |  | (30) |  |
Actuarial gains(1) |  | (722) |  |  | (105) |  |  | (96) |  |  | (23) |  |
Benefits paid |  | (135) |  |  | (183) |  |  | (30) |  |  | (38) |  |
Settlements |  | (78) |  |  | (1,051) |  |  | — |  |  | — |  |
Foreign currency translation impact |  | (33) |  |  | (9) |  |  | — |  |  | — |  |
Divestitures |  | (2) |  |  | — |  |  | — |  |  | — |  |
Benefit obligation at end of year(2) |  | $ | 1,961 |  |  | $ | 2,817 |  |  | $ | 329 |  |  | $ | 440 |  |
Change in plan assets |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 2,124 |  |  | $ | 2,754 |  |  | $ | — |  |  | $ | — |  |
Actual return on plan assets |  | (535) |  |  | 177 |  |  | — |  |  | — |  |
Employer contributions |  | 31 |  |  | 458 |  |  | — |  |  | — |  |
Benefits paid |  | (127) |  |  | (176) |  |  | — |  |  | — |  |
Settlements |  | (78) |  |  | (1,069) |  |  | — |  |  | — |  |
Foreign currency translation impact |  | (32) |  |  | (3) |  |  | — |  |  | — |  |
Administrative expenses |  | — |  |  | (17) |  |  | — |  |  | — |  |
Fair value of plan assets at end of year(2) |  | $ | 1,383 |  |  | $ | 2,124 |  |  | $ | — |  |  | $ | — |  |
Funded status(2) |  | $ | (578) |  |  | $ | (693) |  |  | $ | (329) |  |  | $ | (440) |  |
Amounts recognized on the Consolidated Balance Sheet: |  |  |  |  |  |  |  |  |
Noncurrent assets |  | $ | 15 |  |  | $ | 32 |  |  | $ | — |  |  | $ | — |  |
Current liabilities |  | (7) |  |  | (8) |  |  | (27) |  |  | (29) |  |
Noncurrent liabilities |  | (586) |  |  | (717) |  |  | (302) |  |  | (411) |  |
Net amount recognized |  | $ | (578) |  |  | $ | (693) |  |  | $ | (329) |  |  | $ | (440) |  |
Amounts recognized in Accumulated Other Comprehensive Loss (pretax): |  |  |  |  |  |  |  |  |
Net actuarial loss |  | $ | 1,165 |  |  | $ | 1,389 |  |  | $ | 62 |  |  | $ | 166 |  |
Prior service cost (benefit) |  | 20 |  |  | — |  |  | (77) |  |  | (85) |  |
Net amount recognized |  | $ | 1,185 |  |  | $ | 1,389 |  |  | $ | (15) |  |  | $ | 81 |  |
Other changes in plan assets and benefit obligations recognized in Other Comprehensive Income (pretax): |  |  |  |  |  |  |  |  |
Net actuarial gain |  | $ | (103) |  |  | $ | (137) |  |  | $ | (96) |  |  | $ | (23) |  |
Amortization of net actuarial loss (includes settlements) |  | (121) |  |  | (678) |  |  | (8) |  |  | (8) |  |
Prior service cost (benefit) |  | 23 |  |  | — |  |  | — |  |  | (30) |  |
Amortization of prior service (cost) benefit |  | (3) |  |  | — |  |  | 8 |  |  | 6 |  |
Total |  | $ | (204) |  |  | $ | (815) |  |  | $ | (96) |  |  | $ | (55) |  |
_____________________ (1)At December 31, 2022 and 2021, actuarial gains for pension benefits include approximately $(725) and $(130), respectively, and for other postretirement benefits includes approximately $(100) and $(15), respectively, attributable to the change in the discount rate used to determine the benefit obligation (see “Assumptions” below). (2)At December 31, 2022, the benefit obligation, fair value of plan assets, and funded status for U.S. pension plans were $1,716, $1,167, and $549, respectively. At December 31, 2021, the benefit obligation, fair value of plan assets, and funded status for U.S. pension plans were $2,398, $1,744, and $654, respectively.
Schedule of Pension Plan Benefit Obligations |
|  | Pension benefits
December 31, |  | 2022 |  | 2021
The projected benefit obligation and accumulated benefit obligation for all defined benefit pension plans was as follows: |  |  |  |
Projected benefit obligation |  | $ | 1,961 |  |  | $ | 2,817 |
Accumulated benefit obligation |  | 1,956 |  |  | 2,807 |
The aggregate projected benefit obligation and fair value of plan assets for defined benefit pension plans with projected benefit obligations in excess of plan assets was as follows: |  |  |  |
Projected benefit obligation |  | 1,759 |  |  | 2,472 |
Fair value of plan assets |  | 1,167 |  |  | 1,747 |
The aggregate accumulated benefit obligation and fair value of plan assets for defined benefit pension plans with accumulated benefit obligations in excess of plan assets was as follows: |  |  |  |
Accumulated benefit obligation |  | 1,755 |  |  | 2,464 |
Fair value of plan assets |  | 1,167 |  |  | 1,747 |
Schedule of Components of Net Periodic Benefit Cost |
|  | Pension benefits(1) |  | Other postretirement benefits |  |  |  |
For the year ended December 31, |  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020 |  |  |  |
Service cost |  | $ | 16 |  |  | $ | 21 |  |  | $ | 21 |  |  | $ | 5 |  |  | $ | 6 |  |  | $ | 5 |  |  |  |  |
Interest cost |  | 75 |  |  | 63 |  |  | 108 |  |  | 10 |  |  | 11 |  |  | 13 |  |  |  |  |
Expected return on plan assets |  | (87) |  |  | (110) |  |  | (170) |  |  | — |  |  | — |  |  | — |  |  |  |  |
Amortization of net actuarial loss |  | 74 |  |  | 94 |  |  | 123 |  |  | 8 |  |  | 8 |  |  | 8 |  |  |  |  |
Amortization of prior service benefit |  | 3 |  |  | — |  |  | — |  |  | (8) |  |  | (6) |  |  | (4) |  |  |  |  |
Settlements(2) |  | 47 |  |  | 584 |  |  | 199 |  |  | — |  |  | — |  |  | — |  |  |  |  |
Net periodic benefit cost(3) |  | $ | 128 |  |  | $ | 652 |  |  | $ | 281 |  |  | $ | 15 |  |  | $ | 19 |  |  | $ | 22 |  |  |  |  |
_____________________ (1)In 2022 and 2021, net periodic benefit cost for U.S pension plans was $127 and $653, respectively. (2)In 2022, Settlements were due to the payment of lump-sum benefits. In 2021, Settlements were due to the purchase of a group annuity contract ($549 - see U.S. Pension Plan Annuitizations above) and the payment of lump-sum benefits ($35). In 2020, Settlements were due to two separate purchases of a group annuity contract (see U.S. Pension Plan Annuitizations and U.K. Pension Plan Annuitization above). (3)Service cost was included within Cost of goods sold, Settlements were included within Restructuring and other charges, and all other components were included in Other expenses (income), net on the accompanying Statement of Consolidated Operations.
Schedule of Assumptions | Weighted average assumptions used to determine benefit obligations and net periodic benefit cost for pension and other postretirement benefit plans were as follows:
| Benefit obligations |  | Net periodic benefit cost
| December 31, |  | For the year ended December 31,
| 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2020
Discount rate—pension plans | 5.49 | % |  | 2.76 | % |  | 2.76 | % |  | 2.27 | % |  | 2.86 | %
Discount rate—other postretirement benefit plans | 5.62 |  |  | 2.90 |  |  | 2.99 |  |  | 2.19 |  |  | 2.49 |
Rate of compensation increase—pension plans | 2.67 |  |  | 2.66 |  |  | 2.66 |  |  | 2.54 |  |  | 3.20 |
Expected long-term rate of return on plan assets—pension plans | — |  |  | — |  |  | 5.18 |  |  | 4.91 |  |  | 6.09 |
Schedule of Health Care Cost Trend Rates | Weighted-average assumed health care cost trend rates for U.S. other postretirement benefit plans were as follows (non-U.S. plans are not material):
|  | 2022 |  | 2021
Health care cost trend rate assumed for next year |  | 6.3 | % |  | 4.5 | %
Rate to which the cost trend rate gradually declines |  | 4.5 | % |  | 4.7 | %
Year that the rate reaches the rate at which it is assumed to remain |  | 2029 |  | 2027
Schedule of Plan Assets | Arconic’s pension plan investment policy and weighted average asset allocations at December 31, 2022 and 2021, by asset class, were as follows:
|  |  |  | Plan assets at December 31,
Asset class |  | Policy maximum |  | 2022 |  | 2021
Equities |  | 40% |  | 22 | % |  | 31 | %
Fixed income |  | 100% |  | 62 |  |  | 56 |
Other investments |  | 30% |  | 16 |  |  | 13 |
Total |  |  |  | 100 | % |  | 100 | %
The following table presents the fair value of pension plan assets classified under either the appropriate level of the fair value hierarchy or net asset value:
December 31, 2022 |  | Level 1 |  | Level 2 |  | Level 3 |  | Net Asset Value |  | Total
Equities: |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 120 |  |  | $ | 121 |
Long/short equity hedge funds |  | — |  |  | — |  |  | — |  |  | 23 |  |  | 23 |
Private equity |  | — |  |  | — |  |  | — |  |  | 156 |  |  | 156 |
|  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 299 |  |  | $ | 300 |
Fixed Income: |  |  |  |  |  |  |  |  |  |
Intermediate and long duration government/credit |  | $ | 113 |  |  | $ | 277 |  |  | $ | — |  |  | $ | 369 |  |  | $ | 759 |
Other |  | 5 |  |  | — |  |  | — |  |  | 91 |  |  | 96 |
|  | $ | 118 |  |  | $ | 277 |  |  | $ | — |  |  | $ | 460 |  |  | $ | 855 |
Other investments: |  |  |  |  |  |  |  |  |  |
Real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 93 |  |  | $ | 93 |
Discretionary and systematic macro hedge funds |  | — |  |  | — |  |  | — |  |  | 100 |  |  | 100 |
Other |  | — |  |  | — |  |  | — |  |  | 29 |  |  | 29 |
|  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 222 |  |  | $ | 222 |
Total* |  | $ | 119 |  |  | $ | 277 |  |  | $ | — |  |  | $ | 981 |  |  | $ | 1,377 |
December 31, 2021 |  | Level 1 |  | Level 2 |  | Level 3 |  | Net Asset Value |  | Total
Equities: |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 12 |  |  | $ | — |  |  | $ | — |  |  | $ | 392 |  |  | $ | 404 |
Long/short equity hedge funds |  | — |  |  | — |  |  | — |  |  | 24 |  |  | 24 |
Private equity |  | — |  |  | — |  |  | — |  |  | 224 |  |  | 224 |
|  | $ | 12 |  |  | $ | — |  |  | $ | — |  |  | $ | 640 |  |  | $ | 652 |
Fixed Income: |  |  |  |  |  |  |  |  |  |
Intermediate and long duration government/credit |  | $ | 95 |  |  | $ | 412 |  |  | $ | — |  |  | $ | 612 |  |  | $ | 1,119 |
Other |  | 23 |  |  | — |  |  | — |  |  | 50 |  |  | 73 |
|  | $ | 118 |  |  | $ | 412 |  |  | $ | — |  |  | $ | 662 |  |  | $ | 1,192 |
Other investments: |  |  |  |  |  |  |  |  |  |
Real estate |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 108 |  |  | $ | 108 |
Discretionary and systematic macro hedge funds |  | — |  |  | — |  |  | — |  |  | 99 |  |  | 99 |
Other |  | — |  |  | — |  |  | — |  |  | 77 |  |  | 77 |
|  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 284 |  |  | $ | 284 |
Total* |  | $ | 130 |  |  | $ | 412 |  |  | $ | — |  |  | $ | 1,586 |  |  | $ | 2,128 |
______________________ *As of December 31, 2022 and 2021, the total fair value of pension plan assets excludes a net receivable of $7 and net payable of $4, respectively, which represents securities not yet settled plus interest and dividends earned on various investments.
Schedule of Expected Benefit Payments | Benefit payments expected to be paid to pension (funded and unfunded) and other postretirement benefit plan participants are as follows:
For the year ended December 31, |  | Pension benefits |  | Other postretirement benefits
2023 |  | $ | 142 |  |  | $ | 27 |
2024 |  | 142 |  | 27
2025 |  | 143 |  | 27
2026 |  | 146 |  | 27
2027 |  | 145 |  | 26
2028 through 2032 |  | 719 |  | 127
|  | $ | 1,437 |  |  | $ | 261 |

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