Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

The components of net periodic cost (benefit) were as follows:

	Third quarter ended				Nine months ended
	September 30,				September 30,
	2022		2021		2022		2021
Pension benefits
Service cost	$	1	$	1	$	3	$	3
Interest cost	13		12		38		36
Expected return on plan assets	(20)		(23)		(61)		(69)
Recognized net actuarial loss	12		14		37		43
Settlements	3		3		7		9
Net periodic cost(1)	$	9	$	7	$	24	$	22
Other postretirement benefits
Service cost	$	—	$	—	$	1	$	1
Interest cost	1		1		3		4
Recognized net actuarial loss	—		1		1		1
Amortization of prior service benefit	(2)		(3)		(7)		(7)
Net periodic benefit(1)	$	(1)	$	(1)	$	(2)	$	(1)

 

(1)Service cost was included within Cost of goods sold, Selling, general administrative, and other expenses, and Research and development expenses; settlements were included in Restructuring and other charges; and all other cost components were recorded in Other expense, net in the Statement of Consolidated Operations.

Pension benefits

The Company applied settlement accounting to certain small U.S. and Canadian pension plans due to lump sum payments made to participants, which resulted in settlement charges of $3 and $7 in the third quarter and nine months ended September 30, 2022, respectively, and $3 and $9 in the third quarter and nine months ended September 30, 2021, respectively, that were recorded in Restructuring and other charges in the Statement of Consolidated Operations.

On March 11, 2021, the American Rescue Plan Act of 2021 (“ARPA 2021”) was signed into law in the United States. ARPA 2021, in part, provides temporary relief for employers who sponsor defined benefit pension plans related to funding contributions under the Employee Retirement Income Security Act of 1974. For the third quarter and nine months ended

September 30, 2022, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $18 and $43, respectively. For the third quarter and nine months ended September 30, 2021, Howmet’s combined pension contributions and other postretirement benefit payments were approximately $10 and $79, respectively.

Other postretirement benefits

In the first quarter of 2021, the Company announced a plan administration change of certain of its Medicare-eligible prescription drug benefits to an Employer Group Waiver Plan with a wrap-around secondary plan effective July 1, 2021. The administration change is expected to reduce costs to the Company through the usage of Medicare Part D and drug manufacturer subsidies. Due to this amendment, along with the associated plan remeasurements, the Company recorded a decrease to its Accrued other postretirement benefits liability of $39, which was offset in Accumulated other comprehensive loss in the Consolidated Balance Sheet.