2027– 2031

  
  
  
Defined benefit plans with projected benefit obligations and accumulated benefit obligations exceeding fair value of plan assets are as follows (in millions):

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|   | 2021 |  | 2020 |
| Projected benefit obligation | $ | 1,750  |  |  | $ | 2,207  |  |
| Accumulated benefit obligation | 1,685  |  |  | 2,057  |  |
| Fair value of plan assets | 1,595  |  |  | 1,710  |  |

  
Net pension expense for the qualified defined-benefit plans included the following components (in millions): 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | 2021 |  | 2020 |  | 2019 |
| Service cost | $ | 52  |  |  | $ | 46  |  |  | $ | 42  |  |
| Interest cost | 56  |  |  | 75  |  |  | 89  |  |
| Restructuring charges(a) | —  |  |  | 11  |  |  | —  |  |
| Expected return on assets | (122) |  |  | (110) |  |  | (95) |  |
| Amortization of prior service credit | (1) |  |  | (1) |  |  | (1) |  |
| Recognized actuarial loss | 37  |  |  | 35  |  |  | 37  |  |
| Net pension expense | $ | 22  |  |  | $ | 56  |  |  | $ | 72  |  |

(a)In conjunction with the workforce reductions stemming from the COVID-19 pandemic, the Company recorded additional expense for employees accepting incentive leaves of absence. Such expense is included in Special items - restructuring charges on the consolidated statement of operations for the year-ended December 31, 2020.  
There are no current statutory funding requirements for the Company’s plans in 2022.  Future benefits expected to be paid over the next ten years under the qualified defined-benefit pension plans from the assets of those plans (in millions): 

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  | Total |
| 2022 | $ | 119  |  |
| 2023 | 128  |  |
| 2024 | 133  |  |
| 2025 | 149  |  |
| 2026 | 151  |  |
| 2027– 2031 | 830  |  |

 Nonqualified Defined-Benefit Pension Plan Alaska also maintains an unfunded, noncontributory defined-benefit plan for certain elected officers. This plan uses a December 31 measurement date. The assumptions used to determine benefit obligations and the net period benefit cost for the nonqualified defined-benefit pension plan are similar to those used to calculate the qualified defined-benefit pension plan. The plan's unfunded status, PBO and accumulated benefit obligation are immaterial. The net pension expense in prior year and expected future expense is also immaterial.   
Post-retirement Medical Benefits The Company allows certain retirees to continue their medical, dental and vision benefits by paying all or a portion of the active employee plan premium until eligible for Medicare, currently age 65. This results in a subsidy to retirees, because the premiums received by the Company are less than the actual cost of the retirees’ claims. The accumulated post-retirement benefit obligation for this subsidy is unfunded. The accumulated post-retirement benefit obligation was $125 million and $138 million at December 31, 2021 and 2020. The net periodic benefit cost was not material in 2021 or 2020.  
78
