Pension and Other Postretirement Healthcare Benefits

6 Months Ended

Jun. 30, 2019

Pension and Other Postretirement Healthcare Benefits [Abstract]

Pension and Other Postretirement Healthcare Benefits

22. Pension and Other Postretirement Healthcare Benefits

We sponsor a noncontributory qualified defined benefit retirement plan in the United States (the “U.S. Qualified Plan”). We also have a collective defined contribution plan (a multiemployer plan) in the Netherlands (the “Netherlands Multiemployer Plan”) and a postretirement healthcare plan in South Africa (the “SA Postretirement Plan”).

As a result of the Cristal acquisition we assumed liability for defined benefit (“DB”) and post retirement plans in the United States (“U.S. DB Plans”), United Kingdom (“U.K. DB Scheme”), Australia (“Australia DB Plan”), France (“France Retirement Indemnity Plan”) and Saudi Arabia (“KSA End of Service Indemnity”).  The U.S. DB Plans are comprised of a pension plan (“U.S. Pension Plan”), a Supplemental Executive Retirement Plan (“SERP”) and Permanent Transfer Plan (“TERP”) and retirement medical plan. These plans benefits are generally calculated based on years of credited service and average compensation as defined under the respective plan provisions. The U.S. Pension Plan is funded through contributions to a pension trust fund, generally subject to minimum funding requirements. The SERP, TERP and the retirement medical plans are unfunded. As a result of the INEOS transaction, all active participants moving to INEOS were terminated from the U.S. Pension Plan and became 100% vested with no further benefits accruing to those participants.

The U.K. DB Scheme and the Australia DB Plan are funded plans that are frozen and therefore no further benefits accrue to the participants. The Australia DB Plan is in the process of winding down and is expected to cease by the end of the year. The France Indemnity Plan is an active unfunded plan and benefits are generally based on years of credited service and average compensation. The KSA End of Service Indemnity provides end of service benefits to qualifying participants. End of service benefits are based on years of service and the reasons for which a participant’s services to the company are terminated.

At June 30, 2019, the U.K. DB Scheme, the Australian DB Plan and U.S. Pension Plan were overfunded by $17 million, $4 million and $4 million, respectively, and are recorded in “Other long-term assets” in the unaudited Condensed Consolidated Balance Sheet. The KSA End of Service Indemnity, the France Indemnity plan and the U.S. SERP and TERP were underfunded by $46 million, $7 million and $3 million, respectively, and are included in “Pension and postretirement healthcare benefits” in the unaudited Condensed Consolidated Balance Sheet.

The components of net periodic cost associated with our U.S defined benefit plans and the acquired foreign plans recognized in the unaudited Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net periodic cost:
Service cost	$	1		$	—		$	1		$	—
Interest cost		6			4			9			7
Expected return on plan assets		(7	)		(4	)		(10	)		(8	)
Net amortization of actuarial loss and prior service credit		1			1			1			2
Total net periodic cost	$	1		$	1		$	1		$	1

The aggregate impact of interest costs, expected return on plan assets and net amortization of actuarial losses component of net periodic costs of $1 million for each of the three and six months ended June 30, 2019 and 2018, respectively, is presented in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.

The components of net periodic cost associated with the South Africa postretirement healthcare plan was less than $1 million for each of the three months ended June 30, 2019 and 2018.

For the three and six months ended June 30, 2019 and 2018, we contributed $1 million and $2 million, respectively to the Netherlands Multiemployer Plan, which was primarily recognized in “Cost of goods sold” in the unaudited Condensed Consolidated Statement of Operations.