ÐÇ¿Õ´«Ã½

Annual report pursuant to Section 13 and 15(d)

PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Tables)

v3.22.0.1
PENSIONS AND OTHER POSTRETIREMENT BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2021
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: 2021 2020 2021 2020
Benefit obligations — beginning of year $ 6,565Ìý $ 1,021Ìý $ 3,757Ìý $ 255Ìý
Service cost 56Ìý 23Ìý 51Ìý 8Ìý
Interest cost 103Ìý 64Ìý 74Ìý 19Ìý
Plan amendments —Ìý —Ìý 8Ìý —Ìý
Actuarial loss (gain) (131) 162Ìý (456) 14Ìý
Benefits paid (456) (146) (227) (89)
Participant contributions —Ìý —Ìý 47Ìý 22Ìý
Acquired through business combinations —Ìý 5,535Ìý —Ìý 3,528Ìý
Effect of settlement (101) (94) —Ìý —Ìý
Benefit obligations — end of year $ 6,036Ìý $ 6,565Ìý $ 3,254Ìý $ 3,757Ìý
Change in plan assets:
Fair value of plan assets — beginning of year $ 5,332Ìý $ 749Ìý $ 783Ìý $ 260Ìý
Actual return on plan assets 668Ìý 472Ìý 29Ìý 45Ìý
Participant contributions —Ìý —Ìý 26Ìý 17Ìý
Employer contributions 155Ìý 50Ìý 139Ìý 30Ìý
Benefits paid (454) (146) (165) (88)
Acquired through business combinations —Ìý 4,301Ìý —Ìý 519Ìý
Effect of settlement (95) (94) —Ìý —Ìý
Fair value of plan assets — end of year $ 5,606Ìý $ 5,332Ìý $ 812Ìý $ 783Ìý
Funded status $ (430) $ (1,233) $ (2,442) $ (2,974)
Amounts recognized in Statements of Financial Position:
Non-current assets $ 153Ìý $ 3Ìý $ 71Ìý $ 54Ìý
Current liabilities (5) (12) (130) (139)
Non-current liabilities (578) (1,224) (2,383) (2,889)
Total amount recognized $ (430) $ (1,233) $ (2,442) $ (2,974)
Amounts recognized in accumulated other comprehensive loss (income):
Net actuarial loss (gain) $ (286) $ 164Ìý $ (392) $ 56Ìý
Prior service cost (credit) 5Ìý 6Ìý 4Ìý (6)
Net amount recognized $ (281) $ 170Ìý $ (388) $ 50Ìý
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
Benefits1
Other Benefits2
Company Contributions & Payments VEBA Direct
Payments		 Total
2020 $ 50Ìý $ —Ìý $ 25Ìý $ 25Ìý
2021 163Ìý 67Ìý 113Ìý 180Ìý
2022 (Expected) 4Ìý 28Ìý 110Ìý 138Ìý
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 DecemberÌý31, 2021). Certain agreements with plans holding VEBA assets have capped healthcare costs. For the ÐÇ¿Õ´«Ã½ 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. The amount expected for 2022 in the VEBA column reflects the contribution to be made in February 2022 for earnings in the quarter ended December 31, 2021. We do not include an estimate for contributions beyond that due to the variability of the calculation.
Components Of Net Periodic Benefit Cost
Components of Net Periodic Benefit Cost (Credit)
(In Millions)
Pension Benefits OPEB
2021 2020 2019 2021 2020 2019
Service cost $ 56Ìý $ 23Ìý $ 17Ìý $ 51Ìý $ 8Ìý $ 2Ìý
Interest cost 103Ìý 64Ìý 35Ìý 74Ìý 19Ìý 10Ìý
Expected return on plan assets (359) (140) (55) (40) (20) (17)
Amortization:
Net actuarial loss 32Ìý 27Ìý 24Ìý 3Ìý 3Ìý 5Ìý
Prior service costs (credits) 1Ìý 1Ìý 1Ìý (2) (2) (2)
Settlements (22) (6) —Ìý —Ìý —Ìý —Ìý
Net periodic benefit cost (credit) $ (189) $ (31) $ 22Ìý $ 86Ìý $ 8Ìý $ (2)
For 2022, we estimate net periodic benefit cost (credit) as follows:
(InÌýMillions)
Defined benefit pension plans $ (179)
OPEB plans 72Ìý
Total $ (107)
Components of Accumulated Other Comprehensive Income (Loss)
The following includes details on the significant actuarial losses (gains) impacting the benefit obligation:
(In Millions)
Pension Benefits OPEB
2021 2020 2021 2020
Discount rates $ (224) $ 181Ìý $ (117) $ 44Ìý
Demographic updates 76Ìý (3) 3Ìý (11)
Mortality 19Ìý (16) 13Ìý (4)
Per capita health care costs —Ìý —Ìý (350) (10)
Other (2) —Ìý (5) (5)
Actuarial loss (gain) on benefit obligation (131) 162Ìý (456) 14Ìý
Actual returns on assets under (over) expected (309) (332) 11Ìý (26)
Amortization of net actuarial gain (loss) (32) (27) 2Ìý (3)
Amortization of prior service credits (costs) (1) (1) (3) 2Ìý
Settlements 22Ìý 6Ìý —Ìý —Ìý
Other —Ìý (27) 8Ìý (2)
Total recognized in accumulated other comprehensive income $ (451) $ (219) $ (438) $ (15)
Estimated Future Benefit Payments
Estimated Future Benefit Payments
(In Millions)
Pension
Benefits		 OPEB
2022 $ 475Ìý $ 180Ìý
2023 477Ìý 171Ìý
2024 451Ìý 167Ìý
2025 428Ìý 163Ìý
2026 424Ìý 163Ìý
2027-2031 1,879Ìý 823Ìý
Defined Benefit Plan, Assumptions
The following represents weighted-average assumptions used to determine benefit obligations:
PensionÌýBenefits OPEB
December 31, December 31,
2021 2020 2021 2020
Discount rate 2.75 % 2.34 % 3.01 % 2.71 %
Interest crediting rate 5.35 5.25 N/A N/A
Compensation rate increase 2.52 2.56 3.00 3.00
The following represents weighted-average assumptions used to determine net benefit cost:
Pension Benefits OPEB
December 31, December 31,
2021 2020 2019 2021 2020 2019
Obligation discount rate 2.32Ìý % 3.02Ìý % 4.27Ìý % 2.46Ìý % 3.28Ìý % 4.29Ìý %
Service cost discount rate 2.78Ìý 3.34Ìý 4.35Ìý 3.28Ìý 3.35Ìý 4.49Ìý
Interest cost discount rate 1.64Ìý 2.53Ìý 3.92Ìý 2.04Ìý 2.51Ìý 3.94Ìý
Interest crediting rate 5.35Ìý 5.50Ìý 6.00Ìý N/A N/A N/A
Expected return on plan assets 6.84Ìý 7.69Ìý 8.25Ìý 5.20Ìý 6.82Ìý 7.00Ìý
Compensation rate increase 2.54Ìý 2.56Ìý 2.53Ìý 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,
2021 2020
Health care cost trend rate assumed for next year 2.36Ìý % 6.05Ìý %
Ultimate health care cost trend rate 4.50Ìý 4.59Ìý
Year that the ultimate rate is reached 2031 2031
Plan Assets and Asset Allocation The following table reflects the actual asset allocations for pension and VEBA assets as of DecemberÌý31, 2021 and 2020, as well as the 2022 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 2022
Target
Allocation		 Percentage of
Plan Assets at
DecemberÌý31,		 2022
Target
Allocation		 Percentage of
Plan Assets at
DecemberÌý31,
2021 2020 2021 2020
Equity securities 46.3Ìý % 47.6Ìý % 51.8Ìý % 21.2Ìý % 22.5Ìý % 22.2Ìý %
Fixed income 34.6Ìý 34.6Ìý 33.8Ìý 68.5Ìý 66.4Ìý 66.4Ìý
Hedge funds 2.2Ìý 2.2Ìý 2.2Ìý 1.4Ìý 1.8Ìý 1.8Ìý
Private equity 5.0Ìý 2.7Ìý 2.1Ìý 1.1Ìý —Ìý 0.4Ìý
Structured credit 5.2Ìý 5.6Ìý 5.0Ìý 1.0Ìý 1.2Ìý 0.9Ìý
Real estate 5.2Ìý 5.6Ìý 3.3Ìý 1.0Ìý 2.1Ìý 1.8Ìý
Absolute return fixed income 1.5Ìý 1.7Ìý 1.8Ìý 5.8Ìý 6.0Ìý 6.5Ìý
Total 100.0Ìý % 100.0Ìý % 100.0Ìý % 100.0Ìý % 100.0Ìý % 100.0Ìý %
Fair Value of Pension Assets by Asset Category
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 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Equity securities:
U.S. equities $ 1,157Ìý $ 1,163Ìý $ —Ìý $ —Ìý $ —Ìý $ —Ìý $ 775Ìý $ 787Ìý $ 1,932Ìý $ 1,950Ìý
Global equities 617Ìý 615Ìý —Ìý —Ìý —Ìý —Ìý 117Ìý 195Ìý 734Ìý 810Ìý
Fixed income:
U.S. government securities1
140Ìý 141Ìý 310Ìý 295Ìý —Ìý —Ìý 50Ìý 40Ìý 500Ìý 476Ìý
U.S. corporate bonds 502Ìý 512Ìý 371Ìý 466Ìý —Ìý —Ìý 503Ìý 303Ìý 1,376Ìý 1,281Ìý
Non U.S. and other bonds —Ìý —Ìý 66Ìý 46Ìý —Ìý —Ìý —Ìý —Ìý 66Ìý 46Ìý
Hedge funds —Ìý —Ìý —Ìý —Ìý 125Ìý 118Ìý —Ìý —Ìý 125Ìý 118Ìý
Private equity —Ìý —Ìý —Ìý —Ìý 151Ìý 114Ìý —Ìý —Ìý 151Ìý 114Ìý
Structured credit —Ìý —Ìý —Ìý —Ìý 315Ìý 264Ìý —Ìý —Ìý 315Ìý 264Ìý
Real estate —Ìý —Ìý —Ìý —Ìý 313Ìý 174Ìý —Ìý —Ìý 313Ìý 174Ìý
Absolute return fixed income —Ìý —Ìý —Ìý —Ìý —Ìý —Ìý 94Ìý 99Ìý 94Ìý 99Ìý
Total $ 2,416Ìý $ 2,431Ìý $ 747Ìý $ 807Ìý $ 904Ìý $ 670Ìý $ 1,539Ìý $ 1,424Ìý $ 5,606Ìý $ 5,332Ìý
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 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Equity securities:
U.S. equities $ 26Ìý $ 26Ìý $ —Ìý $ —Ìý $ —Ìý $ —Ìý $ 103Ìý $ 93Ìý $ 129Ìý $ 119Ìý
Global equities 6Ìý 6Ìý —Ìý —Ìý —Ìý —Ìý 48Ìý 49Ìý 54Ìý 55Ìý
Fixed income:
U.S. government securities1
111Ìý 62Ìý 80Ìý 94Ìý —Ìý —Ìý —Ìý —Ìý 191Ìý 156Ìý
U.S. corporate bonds 219Ìý 237Ìý 129Ìý 127Ìý —Ìý —Ìý —Ìý —Ìý 348Ìý 364Ìý
Hedge funds —Ìý —Ìý —Ìý —Ìý 15Ìý 14Ìý —Ìý —Ìý 15Ìý 14Ìý
Private equity —Ìý —Ìý —Ìý —Ìý —Ìý 3Ìý —Ìý —Ìý —Ìý 3Ìý
Structured credit —Ìý —Ìý —Ìý —Ìý 10Ìý 7Ìý —Ìý —Ìý 10Ìý 7Ìý
Real estate —Ìý —Ìý —Ìý —Ìý 17Ìý 14Ìý —Ìý —Ìý 17Ìý 14Ìý
Absolute return fixed income —Ìý —Ìý —Ìý —Ìý —Ìý —Ìý 48Ìý 51Ìý 48Ìý 51Ìý
Total $ 362Ìý $ 331Ìý $ 209Ìý $ 221Ìý $ 42Ìý $ 38Ìý $ 199Ìý $ 193Ìý $ 812Ìý $ 783Ìý
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
2021 2020 2021 2020
Beginning balance — January 1 $ 670Ìý $ 212Ìý $ 38Ìý $ 34Ìý
Actual return on plan assets:
Relating to assets still held at the reporting date 124Ìý 8Ìý 6Ìý 2Ìý
Relating to assets sold during the period 8Ìý 6Ìý —Ìý 1Ìý
Purchases 142Ìý 195Ìý —Ìý —Ìý
Sales (40) (13) (2) (1)
Acquired through business combinations —Ìý 262Ìý —Ìý 2Ìý
Ending balance — December 31 $ 904Ìý $ 670Ìý $ 42Ìý $ 38Ìý
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 (d)
2021 2020 2021 2020 2019
Steelworkers Pension Trust
23-6648508/499
 Green Green No $ 88Ìý $ 14Ìý $ 4Ìý No
9/1/2022 to 09/1/2025
IAM National Pension Fund’s National Pension Plan
51-6031295/002
 Red Red Yes 16Ìý 16Ìý —Ìý Yes
5/31/2022 to 5/15/2023
Other Plans(e)
—Ìý —Ìý —Ìý
Total $ 104Ìý $ 30Ìý $ 4Ìý
(a) The most recent Pension Protection Act zone status available in 2021 and 2020 is for each plan's year-end at December 31, 2020 and 2019. 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".
(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.
(d) We are a party to five 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.
(e) Plans that are not individually significant to our Company are presented in aggregate.