XML 88 R39.htm IDEA: XBRL DOCUMENT v3.22.4
PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2022
Postemployment Benefits [Abstract]  
Schedule of Defined Benefit Plans Disclosures
The following tables and information provide additional disclosures:
(In millions)Pension BenefitsOPEB
Change in benefit obligations:2022202120222021
Benefit obligations — beginning of year$6,036 $6,565 $3,254 $3,757 
Service cost45 56 35 51 
Interest cost144 103 72 74 
Plan amendments122 — (163)8 
Actuarial gain(1,236)(131)(1,781)(456)
Benefits paid(431)(456)(232)(227)
Participant contributions— — 47 47 
Effect of settlement(34)(101)— — 
Other— — 1 — 
Benefit obligations — end of year$4,646 $6,036 $1,233 $3,254 
Change in plan assets:
Fair value of plan assets — beginning of year$5,606 $5,332 $812 $783 
Actual return on plan assets(809)668 (97)29 
Participant contributions— — 47 47 
Employer contributions6 163 198 180 
Benefits paid(431)(456)(232)(227)
Effect of settlement(34)(101)— — 
Fair value of plan assets — end of year$4,338 $5,606 $728 $812 
Funded status$(308)$(430)$(505)$(2,442)
Amounts recognized in Statements of Financial Position:
Non-current assets$195 $153 $161 $71 
Current liabilities(30)(5)(81)(130)
Non-current liabilities(473)(578)(585)(2,383)
Total amount recognized$(308)$(430)$(505)$(2,442)
Amounts recognized in accumulated other comprehensive loss (income):
Net actuarial gain$(361)$(286)$(1,996)$(392)
Prior service cost (credit)121 5 (156)4 
Net amount recognized$(240)$(281)$(2,152)$(388)
Company contributions and payments we expect to make in 2023, and made in 2022 and 2021 are as follows:
Pension Benefits1
OPEB
(In millions)
VEBA2
Direct PaymentsTotal
2021$163 $67 $113 $180 
20226 85 113 198 
2023 (Expected)32 — 73 73 
1 The 2021 pension contributions include $118 million in deferred 2020 pension contributions in connection with the CARES Act that were paid on January 4, 2021.
2 Pursuant to the applicable bargaining agreements, benefits can be paid from certain VEBAs that are at least 70% funded (all VEBAs were over 70% funded at December 31, 2022). Certain agreements with plans holding VEBA assets have capped healthcare costs. For the Cleveland-Cliffs Steel LLC VEBA, we are required to make contributions based on earnings, and we may withdraw money from the VEBA plan to the extent funds are available for costs in excess of the cap. VEBA withdrawals are represented net of direct payments. There will be no further contributions to the Cleveland-Cliffs Steel LLC VEBA based on earnings for the remainder of labor agreement with the USW which expires September of 2026.
Components Of Net Periodic Benefit Cost
COMPONENTS OF NET PERIODIC BENEFIT COST (CREDIT)
Pension BenefitsOPEB
(In millions)202220212020202220212020
Service cost$45 $56 $23 $35 $51 $8 
Interest cost144 103 64 72 74 19 
Expected return on plan assets(355)(359)(140)(37)(40)(20)
Amortization:
Net actuarial loss (gain)13 32 27 (43)3 3 
Prior service costs (credits)5 1 1 (3)(2)(2)
Settlements(8)(22)(6)— — — 
Net periodic benefit cost (credit)$(156)$(189)$(31)$24 $86 $8 
For 2023, we estimate net periodic benefit cost (credit) as follows:
(In millions)
Defined benefit pension plans$(29)
OPEB plans(130)
Total$(159)
Components of Accumulated Other Comprehensive Income (Loss)
The following includes details on the significant actuarial losses (gains) impacting the benefit obligation and other components of other comprehensive loss (income):
Pension BenefitsOPEB
(In millions)2022202120222021
Discount rates$(1,143)$(224)$(441)$(117)
Demographic updates(102)76 (7)3 
Mortality17 19 — 13 
Per capita healthcare costs1
— — (1,328)(350)
Other(8)(2)(5)(5)
Actuarial gain on benefit obligation(1,236)(131)(1,781)(456)
Actual returns on assets under (over) expected1,165 (309)134 11 
Amortization of net actuarial gain (loss)(13)(32)43 (3)
Amortization of prior service credits (costs)(5)(1)3 2 
Settlements8 22 — — 
Plan amendments2
122 — (163)8 
Total recognized in other comprehensive loss (income)$41 $(451)$(1,764)$(438)
1 The gain in per capita healthcare costs in 2022 relating to our OPEB plans is primarily due to the negotiation of favorable Medicare Advantage Prescription Drug healthcare rates, which will go into effect January 1, 2023. Additionally, we expanded the Medicare Advantage program to retirees on some of our other plans which added additional savings. The negotiated rates extend through 2025.
2 The plan amendment loss related to our pension plans is attributable to the increase to the pre-2023 service multiplier to $115 and the service multiplier applicable to service beginning in 2023 to $126 for retirements after January 1, 2023. The plan amendment gain related to our OPEB plans is attributable to the implementation of a cap on healthcare costs for employees retiring after January 1, 2026 on one of our Cleveland-Cliffs Steel LLC plans as well as the extension of the Medicare Advantage offering to plans that previously didn't have the program.
Estimated Future Benefit Payments
(In millions)Pension Benefits
OPEB1
2023$502 $115 
2024450 110 
2025428 103 
2026421 99 
2027410 96 
2028-20321,826 451 
1 OPEB benefit payments are displayed net of participant contributions.
Defined Benefit Plan, Assumptions
The following represents weighted-average assumptions used to determine benefit obligations:
Pension BenefitsOPEB
December 31,December 31,
2022202120222021
Discount rate5.47%2.75%5.52%3.01%
Interest crediting rate5.395.35N/AN/A
Compensation rate increase3.002.523.003.00
The following represents weighted-average assumptions used to determine net benefit cost:
Pension BenefitsOPEB
December 31,December 31,
202220212020202220212020
Obligation discount rate3.21 %2.32 %3.02 %3.33 %2.46 %3.28 %
Service cost discount rate3.49 2.78 3.34 3.91 3.28 3.35 
Interest cost discount rate2.75 1.64 2.53 3.01 2.04 2.51 
Interest crediting rate5.39 5.35 5.50 N/AN/AN/A
Expected return on plan assets6.87 6.84 7.69 4.86 5.20 6.82 
Compensation rate increase2.74 2.54 2.56 3.00 3.00 3.00 
Assumed Health Care Cost Trend Rates
The following represents assumed weighted-average health care cost trend rates:
December 31,
20222021
Health care cost trend rate assumed for next year1
5.44 %2.36 %
Ultimate health care cost trend rate4.50 %4.50 %
Year that the ultimate rate is reached20302031
1 The health care trend rate for the next year is weighted for all of our OPEB plans and factors in our Medicare Advantage Prescription Drug pricing arrangements.
Plan Assets and Asset Allocation The following table reflects the actual asset allocations for pension and VEBA assets as of December 31, 2022 and 2021, as well as the 2023 weighted average target asset allocations:
Pension AssetsVEBA Assets
Asset Category2023
Target
Allocation		Actual Asset Allocation at December 31,2023
Target
Allocation		Actual Asset Allocation at December 31,
2022202120222021
Equity securities33.3 %36.1 %47.6 %21.9 %22.0 %22.5 %
Fixed income41.6 40.9 34.6 73.7 67.4 66.4 
Hedge funds9.2 2.7 2.2 2.2 1.9 1.8 
Private equity3.3 3.3 2.7 — — — 
Structured credit2.6 6.9 5.6 1.1 1.2 1.2 
Real estate10.0 8.2 5.6 1.1 1.7 2.1 
Absolute return fixed income— 1.9 1.7 — 5.8 6.0 
Total100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %
Fair Value of Pension Assets by Asset Category
The fair value of our pension assets by asset category is as follows:
(In millions)Quoted Prices in Active Markets for Identical Assets (Level 1)Significant  Other Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Investments Measured at Net Asset ValueTotal
Asset Category2022202120222021202220212022202120222021
Equity securities:
U.S. equities$564 $1,157 $— $— $— $— $569 $775 $1,133 $1,932 
Global equities328 617 — — — — 106 117 434 734 
Fixed income:
U.S. government securities1
87 140 380 310 — — 63 50 530 500 
U.S. corporate bonds574 502 266 371 — — 373 503 1,213 1,376 
Non U.S. and other bonds— — 32 66 — — — — 32 66 
Hedge funds— — — — 115 125 — — 115 125 
Private equity— — — — 143 151 — — 143 151 
Structured credit— — — — 298 315 — — 298 315 
Real estate— — — — 356 313 — — 356 313 
Absolute return fixed income— — — — — — 84 94 84 94 
Total$1,553 $2,416 $678 $747 $912 $904 $1,195 $1,539 $4,338 $5,606 
1 Includes cash equivalents.
The fair value of our VEBA assets by asset category is as follows:
(In millions)Quoted Prices  in Active Markets for Identical Assets
(Level 1)		Significant  Other Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Investments Measured at Net Asset ValueTotal
Asset Category2022202120222021202220212022202120222021
Equity securities:
U.S. equities$24 $26 $— $— $— $— $89 $103 $113 $129 
Global equities5 6 — — — — 42 48 47 54 
Fixed income:
U.S. government securities1
149 111 79 80 — — — — 228 191 
U.S. corporate bonds146 219 117 129 — — — — 263 348 
Hedge funds— — — — 14 15 — — 14 15 
Private equity— — — — — — — — — — 
Structured credit— — — — 9 10 — — 9 10 
Real estate— — — — 12 17 — — 12 17 
Absolute return fixed income— — — — — — 42 48 42 48 
Total$324 $362 $196 $209 $35 $42 $173 $199 $728 $812 
1 Includes cash equivalents.
Effect of Fair Value Measurements Using Significant Unobservable Inputs on Changes in Plan Assets
The following represents the fair value measurements of changes in plan assets using significant unobservable inputs (Level 3):
Pension AssetsVEBA Assets
(In millions)2022202120222021
Beginning balance — January 1$904 $670 $42 $38 
Actual return on plan assets:
Relating to assets still held at the reporting date(6)124 1 6 
Relating to assets sold during the period15 8 1 — 
Purchases28 142 — — 
Sales(29)(40)(9)(2)
Acquired through business combinations— — — — 
Ending balance — December 31$912 $904 $35 $42 
Multiemployer Plan
Information with respect to multiemployer plans in which we participate follows:
Pension FundEIN/Pension Plan Number
Pension Protection Act Zone Status1
FIP/RP Status Pending/Implemented2
Contributions
Surcharge Imposed3
Expiration Date of Collective Bargaining Agreement4
20222021202220212020
Steelworkers Pension Trust
23-6648508/499
GreenGreenNo$93 $88 $14 No4/1/2025 to 9/1/2026
IAM National Pension Fund’s National Pension Plan
51-6031295/002
RedRedYes22 16 16 Yes5/15/2023 to 6/15/2025
Other Plans5
— — — 
Total$115 $104 $30 
1 The most recent Pension Protection Act zone status available in 2022 and 2021 is for each plan's year-end at December 31, 2021 and 2020. The plan's actuary certifies the zone status. Generally, plans in the red zone are less than 65% funded, plans in the yellow zone are between 65% and 80% funded, and plans in the green zone are at least 80% funded. The IAM National Pension Fund's National Pension Plan voluntarily elected to place itself in the "Red Zone" in April 2019 and has implemented a rehabilitation plan to address its underfunded status. Additional contributions will be required as part of the rehabilitation plan until the plan exits the "Red Zone".
2 The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented, as defined by ERISA.
3 The surcharge represents an additional required contribution due as a result of the critical funding status of the plan.
4 We are a party to six collective bargaining agreements that require contributions to the Steelworkers Pension Trust and three collective bargaining agreements that require contributions to the IAM National Pension Fund's National Pension Plan.
5 Plans that are not individually significant to our Company are presented in aggregate.