Quarterly report pursuant to Section 13 or 15(d)

PENSIONS AND OTHER POSTRETIREMENT BENEFITS

v3.19.3
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
 9 Months Ended
Sep. 30, 2019
Postemployment Benefits [Abstract]  
PENSIONS AND OTHER POSTRETIREMENT BENEFITS
NOTE 8 - PENSIONS AND OTHER POSTRETIREMENT BENEFITS
We offer defined benefit pension plans, defined contribution pension plans and OPEB plans, primarily consisting of retiree healthcare benefits, to most employees as part of a total compensation and benefits program. The defined benefit pension plans are noncontributory and benefits generally are based on a minimum formula or employees’ years of service and average earnings for a defined period prior to retirement.
On August 12, 2019, Cliffs Mining Company, our subsidiary, ceased performing manager duties at Hibbing and transitioned those duties to ArcelorMittal.  In connection with this transition, Cliffs Mining Company and ArcelorMittal entered into a transition agreement, pursuant to which the Ore Mining Companies Pension Plan previously sponsored by Cliffs Mining Company is now sponsored by ArcelorMittal Hibbing Management LLC. In connection with the transfer of manager duties at Hibbing, Hibbing employees previously employed by Cliffs Mining Company concluded their employment and became employed by an ArcelorMittal controlled group entity. All non-Hibbing active and retired participants were transferred to our salaried pension plan. This transition did not have a material impact on our consolidated financial statements in the three or nine months ended September 30, 2019.
The following are the components of defined benefit pension and OPEB costs:
Defined Benefit Pension Costs
 
(In Millions)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
4.6

 
$
4.7

 
$
12.9

 
$
14.0

Interest cost
8.9

 
7.6

 
26.2

 
22.7

Expected return on plan assets
(13.7
)
 
(15.0
)
 
(41.0
)
 
(45.0
)
Amortization:
 
 
 
 
 
 
 
Prior service costs
0.3

 
0.6

 
0.9

 
1.7

Net actuarial loss
5.9

 
5.3

 
17.7

 
15.9

Net periodic benefit cost
$
6.0

 
$
3.2

 
$
16.7

 
$
9.3


Other Postretirement Employment Benefits Credits
 
(In Millions)
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2019
 
2018
 
2019
 
2018
Service cost
$
0.5

 
$
0.6

 
$
1.3

 
$
1.6

Interest cost
2.3

 
2.1

 
7.0

 
6.2

Expected return on plan assets
(4.2
)
 
(4.6
)
 
(12.6
)
 
(13.8
)
Amortization:
 
 
 
 
 
 
 
Prior service credits
(0.5
)
 
(0.7
)
 
(1.5
)
 
(2.2
)
Net actuarial loss
1.3

 
1.3

 
3.8

 
3.8

Net periodic benefit credit
$
(0.6
)
 
$
(1.3
)
 
$
(2.0
)
 
$
(4.4
)

Based on funding requirements, we made defined benefit pension contributions of $5.6 million and $12.3 million for the three and nine months ended September 30, 2019, respectively, compared to defined benefit pension contributions of $18.3 million and $23.9 million for the three and nine months ended September 30, 2018, respectively. OPEB contributions are typically made on an annual basis in the first quarter of each year, but due to plan funding requirements being met, no OPEB contributions were required or made for the three and nine months ended September 30, 2019 and 2018.