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Arconic Employees: Is the Russia-Ukraine War a Threat to the Global Economy?

Healthcare Provider Update: Healthcare Provider for Arconic Arconic, a leading provider of aluminum and aerospace products, collaborates with various insurance companies to offer healthcare benefits to its employees. The primary healthcare providers that partner with Arconic vary by location and include well-known insurers like UnitedHealthcare, Aetna, and Blue Cross Blue Shield, among others. Healthcare Cost Increases in 2026 In 2026, healthcare costs are expected to rise significantly, impacting employers and employees alike, including those at Arconic. The projected average increase in health benefit costs could reach nearly 8.5%, attributed to a perfect storm of higher medical expenses and the potential expiration of enhanced federal premium subsidies from the Affordable Care Act (ACA). Many employers are responding by considering changes to plan designs that shift more costs to employees. This could lead to out-of-pocket premium increases that may exceed 75% for a large portion of the workforce, making it critical for companies like Arconic to strategize their healthcare offerings effectively to mitigate financial impacts on their employees. Click here to learn more

'The global disruptions as a result of the Russia-Ukraine war will impact supply chains, energy prices, and inflation, and this will affect Arconic employees and retirees; it is important to stay informed and readjust your financial planning accordingly,' said Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Arconic employees and retirees should be aware of the continuing impacts of the war in the food and energy markets and how it may affect their long-term retirement planning and budgeting,” advised Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. The effects of sanctions on Russia and its economy.

2. How supply shocks, especially in energy and food, affect global markets.

3. The consequences of the events on inflation and economic growth, and the lower-income populations in the world.

Just before Russia invaded Ukraine, most people thought that the economic ties that had been created through globalization would actually help to promote peace. But the war is putting that to the test and, at the same time, exposing the weaknesses in the supply chains that have been extended to the farthest corners of the world – weaknesses that had already been revealed by the pandemic and the recovery.

The United States, European Union (EU), United Kingdom (UK), and other members of their alliances are using financial sanctions to put massive pressure on Russia and its leaders to stop the war after the brutal invasion of Ukraine. But that is likely to come at a great cost to the world economy. This is something that concerns Arconic employees, retirees, and consumers all over the world.

Punishing Russia:

For the first time in history, Western nations have acted quickly to exclude Russia from the global financial system and trade. Some of Russia’s biggest banks have been kicked out of SWIFT, the system for international bank transfers. Germany has put on hold the launching of a new gas pipeline from Russia while the United States and the United Kingdom have clamped down on Russian oil imports. Hundreds of Western companies have closed shop or exited Russia, the world’s 11th largest economy, either to comply with sanctions or in protest of the war. Some of the rich oligarchs said to be close to the Kremlin have also had their assets frozen or seized.

The effects of the sanctions are clear in Russia where the central bank had to increase its policy rate to 20% and the Russian economy is expected to shrink as much as 10%. Although Russia was recently an integral part of the global community, cutting it off from supply chains and technology could be disastrous for Russian businesses and consumers. It is still unclear whether China will come in to fill the gap left by the West.

Supply Shocks:

Russia is a major supplier of food, energy, metals, and other raw materials, and prices of these commodities are often determined by the law of supply and demand in the global market. Therefore, price increases of some high-demand products have been observed due to supply shocks resulting from the war and sanctions. Russia is a major energy producer and exporter thus the crude oil and natural gas prices have risen since the conflict started mainly due to concerns on supply. The European Union gets about 40% of its natural gas and 25% of its oil from Russia. Thus, any reduction in energy exports from Russia would be impossible to replace and may lead to more shortages in the global market.

Russia is also a leading producer of metals like palladium (used in catalytic converters), platinum, aluminum, copper, and nickel (used in batteries). In addition, the world’s supply of neon gas used in making semiconductors was supplied by Ukrainian companies that have since been closed due to the conflict. Lack of sufficient production of neon elsewhere, shortages are likely to worsen the chip shortage that has been slowing down the generation of new cars, computers, phones, and other electronic products.

Russia and Ukraine are the leading suppliers of wheat to the world market, supplying 30%, corn supplying 17%, barley supplying 32%, and supplying sunflower seed oil 75%. Due to financial sanctions, Russia has been unable to export food, and the war has hindered Ukraine from exporting food. Russia is the world’s largest producer of fertilizer, which accounts for 15% of the global production. Thus, crop production in other parts of the world may be affected by a lack of fertilizer that has increased in price owing to the fact that natural gas is also a source of fertilizer.

Consequently, Arconic employees, retirees, and consumers across the globe will be able to pay more for their groceries. According to the United Nations, food prices, which are already at a record high, are expected to rise further by 22% due to the war. Egypt and other countries in North Africa, Middle East, and Asia are heavily dependent on grains from Russia and Ukraine. This results in food scarcity and high prices will lead to a significant rise in hunger globally.

Ripple Effects:

Despite the fact that Russia and Ukraine make up only about 2% of the world’s GDP, the war and the resulting high energy prices and supply shocks may affect the global economy, which has not yet recovered from the COVID-19 pandemic. The OECD predicts that in the first year of the war the world economic growth will be 1.1% lower and the prices will be 2.5% higher than without the invasion. The effects will be most pronounced in those countries that have closer trade and financial links with Russia and Ukraine. Accordingly, people with lower incomes will be affected more because food and energy are a higher portion of their spending.

The same OECD report points out that inflation is expected to rise by 2% in the euro area and 1.4% in the United States more than it would have without the war. The OECD expects that 2022 year's economic growth will be lowered by about 1.4% in the euro area and 0.9% in the United States. The humanitarian crisis and the economic disaster in Ukraine that has been caused by Russian aggression are almost impossible to quantify. More than 4 million people have been forced to flee Ukraine and many more could do so. Without external assistance, the burden of accepting the massive refugee influx is likely to place a strain on the financial resources of countries such as Hungary, Moldova, Poland, Romania, and Slovakia.

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In the American continent, however, Europe has closer ties to the Russia-Ukraine conflict, but both economies have seen their inflation rates climb to historical highs. In the coming months, the world’s key central banks will have the difficult task of hiking interest rates high enough to combat inflation without sparking a recession. There could also be long-term effects, including a reconfiguration of global supply chains and less integrated financial systems — something that Arconic employees and retirees should know about.

Sources:

1. Wikipedia contributors. 'Economic Impact of the Russian Invasion of Ukraine.' Wikipedia , 17 Feb. 2025, https://en.wikipedia.org/wiki/Economic_impact_of_the_Russian_invasion_of_Ukraine . Accessed 17 Feb. 2025.

2. 'Why's the War in Ukraine Still Impacting My Pension?' PensionBee , 24 May 2023, https://www.pensionbee.com/uk/blog/2023/may/ukraine-impact-on-pensions . Accessed 17 Feb. 2025.

3. 'Ukraine War Impacts Still Felt in Energy Markets, Pension Fund Returns.' Pensions & Investments , 24 Feb. 2023, https://www.pionline.com/markets/ukraine-war-impacts-still-felt-energy-markets-pension-fund-returns . Accessed 17 Feb. 2025.

4. 'Russia's Economic Gamble: The Hidden Costs of War-Driven Growth.' Carnegie Endowment for International Peace , 15 Dec. 2024, https://carnegieendowment.org/russia-eurasia/politika/2024/12/russia-economy-difficulties . Accessed 17 Feb. 2025.

5. 'Russia's Putin Announces 10% Hike in Pensions, Minimum Wage.' Reuters , 25 May 2022, https://www.reuters.com/world/europe/russias-putin-announces-10-hike-pensions-minimum-wage-2022-05-25 . Accessed 17 Feb. 2025.

What retirement benefits and options are available to employees of Arconic Corporation under the Arconic Corp. Pension Plan A, and how do these benefits change based on factors such as age, service length, and retirement category? Employees of Arconic Corporation should understand their eligibility requirements for normal retirement, early retirement, and disability benefits as outlined in the company's pension plan documentation.

The Arconic Corp. Pension Plan A provides retirement benefits based on a formula that considers average earnings and service length, with normal retirement eligibility at age 65 and at least five years of service. Early retirement is available at age 55 with 10 years of service, with benefits reduced based on actuarial assumptions. Disability benefits are available after 10 years of service, and preretirement death benefits offer 50% of accrued benefits to surviving spouses(Arconic Corporation_ Ja…).

How does the frozen state of benefits and service accruals impact current and future retirees at Arconic Corporation? Employees should evaluate how the freeze, effective April 1, 2018, affects their retirement planning and what measures they can take based on their individual circumstances to optimize their retirement benefits.

The frozen state of benefits and service accruals, effective April 1, 2018, means no new service credits or compensation increases are factored into pension calculations for current employees. This freeze affects retirement planning as employees must now rely on frozen benefits and other savings plans to meet retirement needs. It’s important for employees to reassess their financial goals and consider additional investments to optimize retirement benefits(Arconic Corporation_ Ja…).

In what ways can Arconic Corporation employees ensure they meet the requirements for spousal benefits outlined in the pension plan, especially regarding preretirement and postretirement scenarios? Understanding the specifics of eligibility and benefits, such as the surviving spouse benefit calculations, is crucial for employees planning for retirement.

To ensure eligibility for spousal benefits, employees need to meet certain requirements. Preretirement surviving spouse benefits require at least five years of service, and postretirement spousal benefits reduce the participant’s monthly benefit by 5%, with 50% of the reduced amount paid to the spouse if the participant dies first. Employees should understand these provisions to plan for their family’s financial security in retirement(Arconic Corporation_ Ja…).

What are the implications of the actuarial assumptions used by Arconic Corporation in valuing its pension obligations, and how do these assumptions affect the funding of the retirement plan? Arconic Corporation employees should examine how changes in interest rates and mortality tables influence the company's ability to meet its pension obligations.

Actuarial assumptions used in Arconic Corp.’s pension valuations, such as interest rates and mortality tables, directly impact the funding of retirement plans. Changes in these assumptions can affect the pension plan’s obligations and the amount of required contributions, making it important for employees to understand how these factors influence the stability and sufficiency of their retirement benefits(Arconic Corporation_ Ja…).

Can you explain the process by which Arconic Corporation employees can appeal decisions related to their pension benefits, and what support does the company provide during this process? Understanding the proper channels for appeals and the types of documentation required can be vital for employees facing issues with their pension benefits.

Employees can appeal pension benefit decisions through Arconic Corporation’s formal process, which includes submitting an appeal with supporting documentation. The company provides guidelines on what documentation is required, and employees should follow these closely to ensure their case is reviewed thoroughly. The support provided can include detailed responses to clarify benefit calculations and decisions(Arconic Corporation_ Ja…).

What resources are available to Arconic Corporation employees to help them make informed decisions about their retirement benefits, and how can they access these resources efficiently? Employees should know where to find comprehensive materials and support services concerning their retirement plans.

Arconic Corporation offers various resources to assist employees in making informed decisions about their retirement benefits. Employees can access comprehensive plan documents, financial planning tools, and counseling services through the company’s HR department and retirement plan administrators to ensure they fully understand their options(Arconic Corporation_ Ja…).

How does the Arconic Corporation define "average earnings" for calculating retirement benefits, and what methodologies are in place to ensure accuracy in these calculations? Understanding the basis for average earnings will allow employees to better project their pension benefits and prepare for retirement.

Average earnings, used in calculating retirement benefits, are defined as the average of the five highest consecutive calendar years of compensation within the last ten years for most participants. For certain participants, different rules apply based on service and plan conditions. Employees can review their earnings history to ensure accurate calculations and projections for retirement planning(Arconic Corporation_ Ja…).

What criteria does Arconic Corporation use to determine eligibility for deferred vested benefits, and how can employees maximize their advantages in this area? Employees need to be aware of the vesting schedule and how to plan for potential career transitions while maintaining their benefits.

Eligibility for deferred vested benefits in Arconic Corporation’s plan requires five years of service, and benefits can commence as early as age 55, with reductions based on actuarial calculations. Employees should plan career transitions carefully to maximize their vested benefits, especially when considering leaving the company before retirement(Arconic Corporation_ Ja…).

How can Arconic Corporation employees prepare for the potential tax implications of their pension benefits upon retirement, especially in light of IRS regulations for 2024? Being informed about tax strategies related to retirement income can significantly enhance retirees' financial wellbeing.

Employees preparing for retirement should understand the tax implications of pension benefits, particularly in light of IRS regulations for 2024. Strategies such as tax deferral and proper timing of distributions can help minimize the tax burden on retirement income, significantly enhancing financial outcomes(Arconic Corporation_ Ja…).

What contact methods does Arconic Corporation provide for employees wishing to learn more about their pension plan details, and how can employees best utilize these methods to get their queries resolved? Understanding the effective ways to communicate with the company for assistance is key for employees navigating their retirement benefits.

Arconic Corporation provides multiple contact methods for pension-related inquiries, including direct access to HR representatives and pension plan administrators. Employees are encouraged to utilize these resources effectively by preparing questions in advance and keeping detailed records of their communications for follow-up and clarity(Arconic Corporation_ Ja…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Arconic has announced a major restructuring plan that includes significant layoffs across its North American facilities. The restructuring is aimed at streamlining operations and reducing costs amid ongoing economic uncertainties. Additionally, Arconic is revising its pension and 401(k) benefits in response to shifting market conditions and regulatory changes.