Retirement Plans

3 Months Ended

Mar. 31, 2023

Retirement Plans [Abstract]

Retirement Plans

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(15) Retirement Plans:

Frontier recognizes actuarial gains (losses) for our pension and postretirement plans in the period they occur. The components of net periodic benefit cost other than the service cost component for our plans as well as any actuarial gains or losses are included in “Investment and other income (loss)” on the consolidated statement of income.

The following tables provide the components of total pension benefit cost:

	Pension Benefits
($ in millions)	For the three months ended March 31, 2023		For the three months ended March 31, 2022
Components of total pension benefit cost
Service cost	$	13	$	21
Interest cost on projected benefit obligation		33		24
Expected return on plan assets		(37)		(49)
Total pension benefit cost / (income)	$	9	$	(4)

The components of net periodic benefit cost other than the service cost component are included in “Investment and other income” on the consolidated statement of income.

The value of our pension plan assets increased $95 million from $2,033 million at December 31, 2022 to $2,128 million at March 31, 2023. This increase primarily resulted from changes in the market value of investments of $110 million including plan expenses, and contributions of $30 million, partially offset by benefit payments to participants of $45 million.

The following tables provide the components of total postretirement benefit cost:

	Postretirement
($ in millions)	For the three months ended March 31, 2023		For the three months ended March 31, 2022
Components of net periodic postretirement benefit cost
Service cost	$	2	$	4
Interest cost on projected benefit obligation		8		6
Amortization of prior service credit (gain) loss recognized		(5)		(3)
OPEB remeasurement loss		20		-
Total periodic postretirement benefit cost	$	25	$	7

In the first quarter of 2023, Frontier amended the medical coverage for certain postretirement benefit plans, which resulted in remeasurement losses of $20 million, primarily due to discount rate changes. 

During the three months ended March 31, 2023, and 2022 we capitalized $4 million and $6 million of pension and OPEB expense, respectively, into the cost of our capital expenditures, as the costs relate to our engineering and plant construction activities.

In the first quarter of 2022, Frontier amended the medical coverage for certain postretirement benefit plans, which necessitated a remeasurement of its OPEB obligations. This remeasurement resulted in the recognition of a net

actuarial gain of $54 million, which was driven primarily from a higher assumed discount rate relative to the previous measurement date. Frontier recognizes actuarial gains and losses in the period in which they occur. As such, this gain was recorded in “Investment and other income, net” on our consolidated statements of income.