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Alcoa Executive Summary

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Alcoa offers pension plans as a benefit for most US employees and certain employees in foreign locations. The pension benefit amounts depend of the length of service, job difficulty and salary. Alcoa provides a defined contribution plan to their US employees. In a defined contribution plan a company makes a contribution, but does not promise the future benefit to the employees. In this type of pension benefit the employees take on the risk instead of the company. U.S. employees hired before March 1, 2016 participate in a defined benefit plan. In a defined benefit pension plan employees know the terms of the benefit that they will earn when they retire and the company is liable to provide the employees with that benefit. Alcoa also maintains health care and life insurance postretirement benefit plans. …show more content…
The net periodic pension benefit cost which is found on Alcoa’s Statement of Consolidated Cash Flows was -74 million in 2015 and -47 million in 2014. The pension obligation for Alcoa’s pension benefits at December 31, 2015 was $14,247 and in 2014 it was $15,019. The benefit obligations for Alcoa’s postretirement benefits for December 31, 2015 was $2,319 and in 2014 it was $2,368. Companies use the fair value market value of their assets to reduce their expense of their pension plans. At December 31, 2015 the fair value of plan assets of Alcoa were $10,928 and in 2014 it was

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