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Annual report pursuant to Section 13 and 15(d)

PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Tables)

v3.20.4
PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2020
Postemployment Benefits [Abstract] Ìý
Schedule of Defined Benefit Plans Disclosures
The following tables and information provide additional disclosures:
(In Millions)
Pension Benefits OPEB
Change in benefit obligations: 2020 2019 2020 2019
Benefit obligations — beginning of year $ 1,021Ìý $ 906Ìý $ 255Ìý $ 242Ìý
Service cost 23Ìý 17Ìý 8Ìý 2Ìý
Interest cost 64Ìý 35Ìý 19Ìý 10Ìý
Actuarial loss 162Ìý 112Ìý 14Ìý 19Ìý
Benefits paid (146) (62) (89) (26)
Participant contributions —Ìý —Ìý 22Ìý 6Ìý
Acquired through business combinations 5,535Ìý —Ìý 3,528Ìý —Ìý
Effect of settlement (94) —Ìý —Ìý —Ìý
Other —Ìý 13Ìý —Ìý 2Ìý
Benefit obligations — end of year $ 6,565Ìý $ 1,021Ìý $ 3,757Ìý $ 255Ìý
Change in plan assets:
Fair value of plan assets — beginning of year $ 749Ìý $ 687Ìý $ 260Ìý $ 240Ìý
Actual return on plan assets 472Ìý 98Ìý 45Ìý 35Ìý
Participant contributions —Ìý —Ìý 17Ìý 1Ìý
Employer contributions 50Ìý 16Ìý 30Ìý 3Ìý
Benefits paid (146) (62) (88) (19)
Acquired through business combinations 4,301Ìý —Ìý 519Ìý —Ìý
Effect of settlement (94) —Ìý —Ìý —Ìý
Other —Ìý 10Ìý —Ìý —Ìý
Fair value of plan assets — end of year $ 5,332Ìý $ 749Ìý $ 783Ìý $ 260Ìý
Funded status $ (1,233) $ (272) $ (2,974) $ 5Ìý
Amounts recognized in Statements of Financial Position:
Non-current assets $ 3Ìý $ —Ìý $ 54Ìý $ 49Ìý
Current liabilities (12) —Ìý (139) (4)
Non-current liabilities (1,224) (272) (2,889) (40)
Total amount recognized $ (1,233) $ (272) $ (2,974) $ 5Ìý
Amounts recognized in accumulated other comprehensive loss:
Net actuarial loss $ 164Ìý $ 382Ìý $ 56Ìý $ 73Ìý
Prior service cost (credit) 6Ìý 7Ìý (6) (8)
Net amount recognized $ 170Ìý $ 389Ìý $ 50Ìý $ 65Ìý
Annual contributions to the pension plans are made within income tax deductibility restrictions in accordance with statutory regulations. OPEB plans are not subject to minimum regulatory funding requirements, but rather amounts are contributed pursuant to bargaining agreements.
(In Millions)
Pension
Benefits		 Other Benefits
Company Contributions (Reimbursements) VEBA Direct
Payments		 Total
2019 $ 16Ìý $ —Ìý $ 4Ìý $ 4Ìý
2020 50Ìý —Ìý 25Ìý 25Ìý
2021 (Expected)1
202Ìý (16) 144Ìý 128Ìý
1 Pursuant to the applicable bargaining agreements, benefits can be paid from certain VEBAs that are at least 70% funded (all VEBAs are over 70% funded at DecemberÌý31, 2020). Certain agreements with plans holding VEBA assets have capped healthcare costs. For the ArcelorMittal USA VEBA, depending on funding levels and/or Company profits, we may withdraw money from the VEBA plans to the extent funds are available for costs in excess of the cap. The 2021 expected pension contributions include $118 million in deferred 2020 pension contributions in connection with the CARES Act that were paid on January 4, 2021.
Components Of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost (Credit)
(In Millions)
Pension Benefits OPEB
2020 2019 2018 2020 2019 2018
Service cost $ 23Ìý $ 17Ìý $ 19Ìý $ 8Ìý $ 2Ìý $ 2Ìý
Interest cost 64Ìý 35Ìý 30Ìý 19Ìý 10Ìý 8Ìý
Expected return on plan assets (140) (55) (60) (20) (17) (18)
Amortization:
Net actuarial loss 27Ìý 24Ìý 21Ìý 3Ìý 5Ìý 5Ìý
Prior service costs (credits) 1Ìý 1Ìý 2Ìý (2) (2) (3)
Settlements (6) —Ìý 1Ìý —Ìý —Ìý —Ìý
Net periodic benefit cost (credit) $ (31) $ 22Ìý $ 13Ìý $ 8Ìý $ (2) $ (6)
For 2021, we estimate net periodic benefit cost (credit) as follows:
(InÌýMillions)
Defined benefit pension plans $ (168)
OPEB plans 86Ìý
Total $ (82)
Components of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
The following includes details on the significant actuarial losses (gains) impacting the benefit obligation:
(In Millions)
Pension Benefits OPEB
2020 2019 2020 2019
Discount rates $ 181Ìý $ 106Ìý $ 44Ìý $ 26Ìý
Demographic (gains) losses (3) 12Ìý (11) 4Ìý
Mortality (16) (6) (4) (4)
Per capita claims —Ìý —Ìý (10) (9)
Other —Ìý —Ìý (5) 3Ìý
Actuarial loss on benefit obligation 162Ìý 112Ìý 14Ìý 20Ìý
Actual returns on assets over expected (332) (44) (26) (18)
Amortization of net actuarial loss (27) (24) (3) (5)
Amortization of prior service credits (costs) (1) (1) 2Ìý 2Ìý
Settlements 6Ìý —Ìý —Ìý —Ìý
Other (27) 7Ìý (2) (5)
Total recognized in accumulated other comprehensive loss (income) $ (219) $ 50Ìý $ (15) $ (6)
Estimated Future Benefit Payments
Estimated Future Benefit Payments
(In Millions)
Pension
Benefits		 OPEB
2021 $ 486Ìý $ 191Ìý
2022 462Ìý 185Ìý
2023 480Ìý 180Ìý
2024 455Ìý 178Ìý
2025 433Ìý 176Ìý
2026-2030 1,983Ìý 884Ìý
Defined Benefit Plan, Assumptions
The following represents weighted-average assumptions used to determine benefit obligations:
PensionÌýBenefits OPEB
December 31, December 31,
2020 2019 2020 2019
Discount rate 2.34 % 3.27 % 2.71 % 3.28 %
Interest crediting rate 5.25 6.00 N/A N/A
Compensation rate increase 2.56 2.53 3.00 3.00
The following represents weighted-average assumptions used to determine net benefit cost:
Pension Benefits OPEB
December 31, December 31,
2020 2019 2018 2020 2019 2018
Obligation discount rate 3.02Ìý % 4.27Ìý % 3.58Ìý % 3.28Ìý % 4.29Ìý % 3.60Ìý %
Service cost discount rate 3.34Ìý 4.35Ìý 3.64Ìý 3.35Ìý 4.49Ìý 3.73Ìý
Interest cost discount rate 2.53Ìý 3.92Ìý 3.16Ìý 2.51Ìý 3.94Ìý 3.11Ìý
Interest crediting rate 5.50Ìý 6.00Ìý 6.00Ìý N/A N/A N/A
Expected return on plan assets 7.69Ìý 8.25Ìý 8.25Ìý 6.82Ìý 7.00Ìý 7.00Ìý
Compensation rate increase 2.56Ìý 2.53Ìý 2.49Ìý 3.00Ìý 3.00Ìý 3.00Ìý
Assumed Health Care Cost Trend Rates
The following represents assumed weighted-average health care cost trend rates:
December 31,
2020 2019
Health care cost trend rate assumed for next year 6.05Ìý % 6.50Ìý %
Ultimate health care cost trend rate 4.59Ìý 5.00Ìý
Year that the ultimate rate is reached 2031 2026
Plan Assets and Asset Allocation The following table reflects the actual asset allocations for pension and VEBA assets as of DecemberÌý31, 2020 and 2019, as well as the 2021 weighted average target asset allocations. Equity investments include securities in large-cap, mid-cap and small-cap companies located in the U.S. and worldwide. Fixed income investments primarily include corporate bonds and government debt securities.
Pension Assets VEBA Assets
Asset Category 2021
Target
Allocation		 Percentage of
Plan Assets at
DecemberÌý31,		 2021
Target
Allocation		 Percentage of
Plan Assets at
DecemberÌý31,
2020 2019 2020 2019
Equity securities 41.3Ìý % 51.8Ìý % 44.0Ìý % 20.3Ìý % 22.2Ìý % 7.2Ìý %
Fixed income 39.7Ìý 33.8Ìý 27.6Ìý 69.6Ìý 66.4Ìý 79.8Ìý
Hedge funds 5.0Ìý 2.2Ìý 5.4Ìý 1.1Ìý 1.8Ìý 4.8Ìý
Private equity 2.2Ìý 2.1Ìý 6.6Ìý 1.4Ìý 0.4Ìý 0.7Ìý
Structured credit 5.2Ìý 5.0Ìý 7.0Ìý 1.0Ìý 0.9Ìý 2.1Ìý
Real estate 5.2Ìý 3.3Ìý 9.4Ìý 1.1Ìý 1.8Ìý 5.4Ìý
Absolute return fixed income 1.4Ìý 1.8Ìý —Ìý 5.5Ìý 6.5Ìý —Ìý
Total 100.0Ìý % 100.0Ìý % 100.0Ìý % 100.0Ìý % 100.0Ìý % 100.0Ìý %
Defined Benefit Plan, Plan Assets, Category [Table Text Block]
The fair value of our pension assets by asset category is as follows:
(In Millions)
QuotedÌýPricesÌýinÌýActive
Markets for Identical
Assets
(Level 1)		 SignificantÌý Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Investments Measured at Net Asset Value Total
Asset Category 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Equity securities:
U.S. equities $ 1,163Ìý $ 169Ìý $ —Ìý $ —Ìý $ —Ìý $ —Ìý $ 787Ìý $ —Ìý $ 1,950Ìý $ 169Ìý
Global equities 615Ìý 161Ìý —Ìý —Ìý —Ìý —Ìý 195Ìý —Ìý 810Ìý 161Ìý
Fixed income:
U.S. government securities1
141Ìý 11Ìý 295Ìý 22Ìý —Ìý —Ìý 40Ìý —Ìý 476Ìý 33Ìý
U.S. corporate bonds 512Ìý 174Ìý 466Ìý —Ìý —Ìý —Ìý 303Ìý —Ìý 1,281Ìý 174Ìý
Non U.S. and other bonds —Ìý —Ìý 46Ìý —Ìý —Ìý —Ìý —Ìý —Ìý 46Ìý —Ìý
Hedge funds —Ìý —Ìý —Ìý —Ìý 118Ìý 40Ìý —Ìý —Ìý 118Ìý 40Ìý
Private equity —Ìý —Ìý —Ìý —Ìý 114Ìý 50Ìý —Ìý —Ìý 114Ìý 50Ìý
Structured credit —Ìý —Ìý —Ìý —Ìý 264Ìý 52Ìý —Ìý —Ìý 264Ìý 52Ìý
Real estate —Ìý —Ìý —Ìý —Ìý 174Ìý 70Ìý —Ìý —Ìý 174Ìý 70Ìý
Absolute return fixed income —Ìý —Ìý —Ìý —Ìý —Ìý —Ìý 99Ìý —Ìý 99Ìý —Ìý
Total $ 2,431Ìý $ 515Ìý $ 807Ìý $ 22Ìý $ 670Ìý $ 212Ìý $ 1,424Ìý $ —Ìý $ 5,332Ìý $ 749Ìý
1 Includes cash equivalents.
The fair value of our other benefit plan assets by asset category is as follows:
(In Millions)
QuotedÌýPricesÌýinÌýActive
Markets for Identical
Assets
(Level 1)		 SignificantÌý Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Investments Measured at Net Asset Value Total
Asset Category 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
Equity securities:
U.S. equities $ 26Ìý $ 12Ìý $ —Ìý $ —Ìý $ —Ìý $ —Ìý $ 93Ìý $ —Ìý $ 119Ìý $ 12Ìý
Global equities 6Ìý 7Ìý —Ìý —Ìý —Ìý —Ìý 49Ìý —Ìý 55Ìý 7Ìý
Fixed income:
U.S. government securities1
62Ìý —Ìý 94Ìý —Ìý —Ìý —Ìý —Ìý —Ìý 156Ìý —Ìý
U.S. corporate bonds 237Ìý 166Ìý 127Ìý 41Ìý —Ìý —Ìý —Ìý —Ìý 364Ìý 207Ìý
Hedge funds —Ìý —Ìý —Ìý —Ìý 14Ìý 12Ìý —Ìý —Ìý 14Ìý 12Ìý
Private equity —Ìý —Ìý —Ìý —Ìý 3Ìý 2Ìý —Ìý —Ìý 3Ìý 2Ìý
Structured credit —Ìý —Ìý —Ìý —Ìý 7Ìý 6Ìý —Ìý —Ìý 7Ìý 6Ìý
Real estate —Ìý —Ìý —Ìý —Ìý 14Ìý 14Ìý —Ìý —Ìý 14Ìý 14Ìý
Absolute return fixed income —Ìý —Ìý —Ìý —Ìý —Ìý —Ìý 51Ìý —Ìý 51Ìý —Ìý
Total $ 331Ìý $ 185Ìý $ 221Ìý $ 41Ìý $ 38Ìý $ 34Ìý $ 193Ìý $ —Ìý $ 783Ìý $ 260Ìý
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):
(In Millions)
Pension Assets VEBA Assets
2020 2019 2020 2019
Beginning balance — January 1 $ 212Ìý $ 229Ìý $ 34Ìý $ 36Ìý
Actual return on plan assets:
Relating to assets still held at the reporting date 8Ìý (1) 2Ìý 1Ìý
Relating to assets sold during the period 6Ìý 30Ìý 1Ìý —Ìý
Purchases 195Ìý 17Ìý —Ìý —Ìý
Sales (13) (60) (1) (3)
Acquired through business combinations 262Ìý —Ìý 2Ìý —Ìý
Other —Ìý (3) —Ìý —Ìý
Ending balance — December 31 $ 670Ìý $ 212Ìý $ 38Ìý $ 34Ìý
Multiemployer Plan
Information with respect to multiemployer plans in which we participate follows:
Pension Fund EIN/Pension Plan Number Pension Protection Act Zone Status (a) FIP/RP Status Pending/Implemented (b) Contributions Surcharge Imposed (c) Expiration Date of Collective Bargaining Agreement
2020 2019 2020 2019 2018
Steelworkers Pension Trust
23-6648508/499
 Green Green No $ 14Ìý $ 4Ìý $ 4Ìý No
1/22/2021 to 10/1/2022
IAM National Pension Fund’s National Pension Plan
51-6031295/002
 Red Green Yes 16Ìý —Ìý —Ìý Yes
5/31/2022 to 5/15/2023
American Maritime Officers Plan
13-1936709/001
 Green Green No —Ìý —Ìý —Ìý No
7/31/2021
Total $ 30Ìý $ 4Ìý $ 4Ìý
(a) The most recent Pension Protection Act zone status available in 2020 and 2019 is for each plan's year-end at December 31, 2019 and 2018. 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.
(b) 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.
(c) The surcharge represents an additional required contribution due as a result of the critical funding status of the plan.