v3.22.4

Pension and Other Postretirement Benefits (Tables)

12 Months Ended

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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