Expected contribution

  
The following table presents changes in the fair value of the Company’s Pension Plans’ assets, projected benefit obligation, funded status, and accumulated benefit obligation: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | Qualified Plan |  | Non-Qualified Plan |
| (in millions) | 2021 |  | 2020 |  | 2021 |  | 2020 |
| Fair value of plan assets as of January 1 | $1,343  |  |  | $1,246  |  |  | $—  |  |  | $—  |  |
| Actual return on plan assets  | 125  |  |  | 165  |  |  | —  |  |  | —  |  |
| Employer contributions | —  |  |  | —  |  |  | 8  |  |  | 8  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |
| Benefits and administrative expenses paid | (78) |  |  | (68) |  |  | (8) |  |  | (8) |  |
| Fair value of plan assets as of December 31 | 1,390  |  |  | 1,343  |  |  | —  |  |  | —  |  |
| Projected benefit obligation | 1,083  |  |  | 1,157  |  |  | 99  |  |  | 105  |  |
| Pension asset (obligation) | $307  |  |  | $186  |  |  | ($99) |  |  | ($105) |  |
| Accumulated benefit obligation | $1,083  |  |  | $1,157  |  |  | $99  |  |  | $105  |  |

The Company’s projected benefit obligation decreased for the year ending December 31, 2021 due to an actuarial gain and benefits paid exceeded the interest cost on remaining obligations. Citizens recognized actuarial gains and losses on the Pension Plans in AOCI resulting in an ending balance of $465 million and $571 million at December 31, 2021 and 2020, respectively.Citizens does not plan to contribute to the Qualified Plan in 2022. No contributions were made to the Qualified Plan in 2021 or 2020. Citizens expects to contribute $8 million to the Non-Qualified Plan in 2022 and contributed $8 million to the Non-Qualified Plan in 2021 and 2020.The following table presents other changes in plan assets and benefit obligations recognized in OCI for the Company’s Pension Plans: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
| (in millions) | 2021 |  | 2020 |  | 2019 |
| Net periodic pension cost (income) | ($31) |  |  | ($22) |  |  | ($5) |  |
| Net actuarial loss (gain) | (74) |  |  | 37  |  |  | (49) |  |
| Amortization of prior service credit | —  |  |  | —  |  |  | —  |  |
| Amortization of net actuarial loss | (17) |  |  | (17) |  |  | (19) |  |
| Settlement | (15) |  |  | —  |  |  | —  |  |
|  |  |  |  |  |  |
| Total gain (loss) recognized in other comprehensive income (loss) | (106) |  |  | 20  |  |  | (68) |  |
| Total (loss) gain recognized in net periodic pension cost (income) and other comprehensive income (loss) | ($137) |  |  | ($2) |  |  | ($73) |  |

Costs under the Company’s Pension Plans are actuarially computed and include current service costs and amortization of prior service costs over the participants’ average future working lifetime. The actuarial cost method used in determining the net periodic pension cost is the projected unit method. During 2021, lump sum payments made under the Qualified Plan triggered settlement accounting. In accordance with the applicable accounting guidance for defined benefit plans, we performed a remeasurement of the Qualified Plan and recognized a settlement loss.The following table presents the components of net periodic pension (income) cost for the Company’s Pension Plans:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Year Ended December 31, |
|  | Qualified Plan |  | Non-Qualified Plan |  | Total |
| (in millions) | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |
| Service cost | $3  |  |  | $3  |  |  | $3  |  |  | $—  |  |  | $—  |  |  | $—  |  |  | $3  |  |  | $3  |  |  | $3  |  |
| Interest cost | 31  |  |  | 37  |  |  | 41  |  |  | 3  |  |  | 3  |  |  | 4  |  |  | 34  |  |  | 40  |  |  | 45  |  |
| Expected return on plan assets | (85) |  |  | (82) |  |  | (72) |  |  | —  |  |  | —  |  |  | —  |  |  | (85) |  |  | (82) |  |  | (72) |  |
| Amortization of actuarial loss | 14  |  |  | 14  |  |  | 17  |  |  | 3  |  |  | 3  |  |  | 2  |  |  | 17  |  |  | 17  |  |  | 19  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Settlement | 15  |  |  | —  |  |  | —  |  |  | —  |  |  | —  |  |  | —  |  |  | 15  |  |  | —  |  |  | —  |  |
| Net periodic pension (income) cost(1) | ($22) |  |  | ($28) |  |  | ($11) |  |  | $6  |  |  | $6  |  |  | $6  |  |  | ($16) |  |  | ($22) |  |  | ($5) |  |

(1) In the Consolidated Statements of Operations, service cost is presented in salaries and employee benefits, and all other components of net periodic pension (income) cost are presented in other operating expense.   


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|  |  | Citizens Financial Group, Inc. | 126 |


