Pension and Other Postretirement Benefits

3 Months Ended

Mar. 31, 2016

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits

M. Pension and Other Postretirement Benefits – The components of net periodic benefit cost were as follows:

	Pension benefits						Other postretirement benefits
First quarter ended March 31,	2016			2015			2016			2015
Service cost	$	40		$	44		$	3		$	3
Interest cost		122			144			18			23
Expected return on plan assets		(185	)		(188	)		—			—
Recognized net actuarial loss		102			118			6			4
Amortization of prior service cost (benefit)		4			4			(6	)		(9	)
Settlements*		—			1			—			—
Special termination benefits*		1			2			—			—
Net periodic benefit cost	$	84		$	125		$	21		$	21

* These amounts were recorded in Restructuring and other charges on the accompanying Statement of Consolidated Operations (see Note D).

In conjunction with the annual measurement of the funded status of Alcoa’s pension and other postretirement benefit plans at December 31, 2015, management elected to change the manner in which the interest cost component of net periodic benefit cost is determined in 2016 and beyond. Previously, the interest cost component was determined by multiplying the single equivalent rate and the aggregate discounted cash flows of the plans’ projected benefit obligations. Under the new methodology, the interest cost component is determined by aggregating the product of the discounted cash flows of the plans’ projected benefit obligations for each year and an individual spot rate (referred to as the “spot rate” approach). This change resulted in a lower interest cost component of net periodic benefit cost for the pension plans and other postretirement benefit plans of $24 and $4, respectively, in the first quarter of 2016.