Note 10 - Pension and Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Retirement Benefits [Text Block]

We have a number of defined contribution and defined benefit, qualified and nonqualified, pension plans covering eligible employees. Other postretirement benefits (OPEB), including medical and life insurance, are provided for certain employees upon retirement.

Components of net periodic benefit cost — 

	Pension												OPEB
	2020						2019						2020				2019
Three Months Ended June 30,	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.		Non-U.S.		Non-U.S.
Interest cost	$	5		$	2		$	17		$	2		$	—	$	—	$	—
Expected return on plan assets		(8	)		(1	)		(20	)		(1	)
Service cost					2						2
Settlement charge								258
Amortization of net actuarial loss		3			2			10			1
Net periodic benefit cost	$	—		$	5		$	265		$	4		$	—	$	—	$	—
Six Months Ended June 30,
Interest cost	$	10		$	3		$	26		$	4		$	—	$	1	$	1
Expected return on plan assets		(17	)		(2	)		(32	)		(2	)
Service cost					4						4
Settlement charge								258
Amortization of net actuarial loss		6			4			15			3
Net periodic benefit cost (credit)	$	(1	)	$	9		$	267		$	9		$	—	$	1	$	1

The service cost components of net periodic pension and OPEB costs are included in cost of sales and selling, general and administrative expenses as part of compensation cost and are eligible for capitalization in inventory and other assets. The non-service components are reported in other income (expense), net and are not eligible for capitalization.

Pension expense for 2020 decreased versus the same period in 2019 as a result of a lower interest expense.

Plan termination — In October 2017, upon authorization by the Dana Board of Directors, we commenced the process of terminating one of our U.S. defined benefit pension plans. During the second quarter of 2019, payments were made from plan assets to those plan participants that elected to take the lump-sum payout option. In June 2019, we entered into (a) a definitive commitment agreement by and among Dana, Athene Annuity and Life Company (Athene) and State Street Global Advisors, as independent fiduciary to the plan, and (b) a definitive commitment agreement by and among Dana, Companion Life Insurance Company (Companion) and State Street Global Advisors, as independent fiduciary to the plan. Pursuant to the definitive commitment agreements, the plan purchased group annuity contracts that irrevocably transferred to the insurance companies the remaining future pension benefit obligations of the plan. Plan participant’s benefits are unchanged as a result of the termination. We contributed $59 to the plan prior to the purchase of the group annuity contracts. The purchase of group annuity contracts was then funded directly by the assets of the plan in June 2019. By irrevocably transferring the obligations to Athene and Companion, we reduced our unfunded pension obligation by approximately $165 and recognized a pre-tax pension settlement charge of $256 in 2019.