v3.23.2
Pension and Other Postretirement Benefits
 6 Months Ended
Jun. 30, 2023
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
The components of net periodic benefit cost for defined benefit pension and other postretirement benefit plans were as follows:
Second quarter ended June 30,Six months ended June 30,
2023202220232022
Pension benefits
Service cost$3 $4 $6 $9 
Interest cost25 17 51 33 
Expected return on plan assets(23)(23)(46)(47)
Amortization of net actuarial loss10 19 20 38 
Amortization of prior service cost2 — 3 — 
Settlements— — — 1 
Net periodic benefit cost*
$17 $17 $34 $34 
Other postretirement benefits
Service cost$1 $1 $2 $2 
Interest cost4 3 8 6 
Amortization of net actuarial loss— 2 1 4 
Amortization of prior service benefit(2)(2)(4)(4)
Net periodic benefit cost*
$3 $4 $7 $8 
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*    Service cost was reported in Cost of goods sold, Settlements were reported in Restructuring and other charges, and all other components were reported in Other expenses, net on the accompanying Statement of Consolidated Operations.
United Steelworkers Labor Agreement—On May 14, 2022, the Company and the United Steelworkers reached a tentative four-year labor agreement covering approximately 3,300 employees at four U.S. locations; the previous labor agreement expired on May 15, 2022. The tentative agreement was ratified by the union employees on June 1, 2022. In the 2022 second quarter and six-month period, Arconic recognized $19 in Cost of goods sold on the accompanying Statement of Consolidated Operations primarily for a one-time signing bonus for the covered employees. Additionally, the new labor agreement provides for, among other items, established annual wage increases and higher multipliers used to calculate the union employees’ future pension retirement benefits.
The change to the pension benefits qualifies as a significant plan amendment to the Company’s U.S. hourly defined benefit pension plan, and, as a result, Arconic was required to complete a remeasurement of this plan (generally completed as of December 31st each year), including an interim actuarial valuation of the plan obligations. Communication of the benefit change to the union employees occurred on May 15, 2022, and the effective date of this amendment was May 16, 2022. For purposes of performing an interim remeasurement of the plan, the Company applied a practical expedient to the remeasurement date and selected May 31, 2022. Accordingly, the discount rate used in calculating the plan obligations increased to 4.66% at May 31, 2022 from 2.96% at December 31, 2021. The remeasurement of this plan, together with the amendment for increased benefits, resulted in a $13 net decrease to Accrued pension benefits and a $10 (after-tax) net decrease to Accumulated other comprehensive loss (see Note K). Additionally, annual net periodic benefit cost to be recognized for this plan in 2022 increased by $8, comprised of a $2 decrease in service cost and a $10 increase in non-service costs. These amounts were recognized ratably over the remainder of 2022 (June through December).