d.Net appreciation/depreciation - The Plan presents in the accompanying Statements of Changes in Net Assets Available for Benefits the net appreciation/depreciation in the fair value of its investments which consists of the net realized gains or losses and the net unrealized appreciation or depreciation on those investments.
e.Investment by the trustee - The Trustee shall invest any monies received with respect to any investment option in the appropriate shares, units or other investments as soon as practicable. Purchases and sales of securities are recorded on a trade-date basis.
f.Administrative expenses - The Plan is responsible for the payment of all costs and expenses incurred in administering the Plan, including the expenses of the Plan Administrator, record keeping fees, the fees and expenses of the Trustee and other legal and administrative expenses. To cover these expenses, the Plan Administrator shall utilize the following sources in the priority listed: (1) fees received from any fund provider to reimburse the Plan Administrator for services provided by the Plan Administrator which would otherwise have been provided by the fund provider (i.e., revenue sharing), (2) loan origination fees, (3) settlement proceeds and other miscellaneous items, (4) voluntary contributions from designated Employing Companies to cover cost of administration and (5) assessments against participants' individual accounts. There were no assessments against participants’ individual accounts in either 2020 or 2019.
g.Payment of benefits - Benefits are recorded when paid.
h.Income recognition - Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
i.Participant loans - Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Loans in default are classified as benefit payments to participants based upon the terms of the Plan.
j.Excess contributions payable - Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding reduction to contributions.
k.Subsequent events - The Plan has evaluated subsequent events through June 22, 2021, the date on which the financial statements were available to be issued.
Effective January 1, 2021 (except as otherwise noted), the Plan was amended and restated to add/increase fees and update references to default investment options resulting from investment option changes.
3. Plan amendments - Effective January 1, 2021 (except as otherwise noted), the Plan was amended and restated to add/increase fees and update references to default investment options resulting from investment option changes.
Effective November 1, 2020, the Plan was amended to restore company matching and retirement account contributions, extend the deadline for making changes to the savings percentages effective November 1, 2020, clarify that the Average Contribution Percentage test will be satisfied for the entire 2020 plan year using the current year testing method, and make a miscellaneous technical correction and clarification.
U. S. STEEL TUBULAR SERVICES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019
Effective June 1, 2020, the Plan was amended to temporarily suspend company matching and retirement account contributions and clarify that the Actual Deferral Percentage test will be satisfied for the entire 2020 plan year using the current year testing method.
Effective January 1, 2020, the Plan was amended to adopt legally required amendments to hardship distribution provisions. It also contemplated a change in the process of documenting hardship withdrawals.
Effective December 23, 2019, the Plan was amended to adopt provisions adding a Retiree Health Care Account source to facilitate direct plan transfers from the 榴莲视频 401(k) Plan for USW-Represented Employees. (There were no plan-to-plan transfers that resulted in contributions into the Retiree Health Care Account in 2020 and 2019.)
Effective for notifications under the 榴莲视频 Supplemental Unemployment Benefit Program for Non-Union Employees occurring on or after November 2, 2019, the Plan is amended to clarify the eligibility requirements in the event of an involuntary termination of employment.
Effective January 1, 2019, the Plan was amended to provide that base salary includes parental leave.
Effective January 1, 2019, the hardship withdrawal provisions under the Plan were amended to include earnings, and to eliminate the suspension period and requirement to exhaust Plan loans.
4.Employer-related investments - Purchases and sales of 榴莲视频 common stock in accordance with provisions of the Plan are permitted under ERISA.
5.Tax status - The Internal Revenue Service (IRS) has determined and informed the Plan Sponsor by letter dated July 8, 2014 that the Plan, as amended and restated effective January 1, 2013, continues to qualify under §401(a) of the Internal Revenue Code (IRC) of 1986, as amended, and its related trust is exempt from tax under §501(a) of the IRC of 1986, as amended. The Plan has been amended subsequent to the amendments taken into account by the IRS in conjunction with its issuance of the July 8, 2014 determination letter. The Plan Sponsor and Tax Counsel for the Plan believe the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and therefore, believe that the Plan is qualified, and the related trust is tax-exempt.
US GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan Sponsor has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2020 and 2019, there were no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no active audits in progress for any tax periods. The Plan Sponsor believes it is no longer subject to examinations by the IRS for the years prior to 2017.
6.Plan termination - The Plan Sponsor believes the existence of the Plan is in the best interest of its employees and, although it has no intention of discontinuing it, the Plan Sponsor has the right under the Plan to terminate the Plan in whole or in part at any time for any reason. However, in the event of Plan termination, participants would become 100% vested in their employer contributions and the net value of the assets of the Plan shall be allocated among the participants and beneficiaries of the Plan in compliance with ERISA.
7.Risks and uncertainties - Investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with these investments and the level of uncertainty related to changes in the value of these investments, it is at least reasonably possible that changes in the near term could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.
8.Related party and party-in-Interest transactions - Certain investments of the Plan are mutual funds and common collective trusts managed by Fidelity Investments. Therefore, these transactions qualify as party-in-interest transactions. The Trustee collects management fees by offsetting the investment return in an amount as noted by the investment’s expense ratio. Therefore, the Plan is not directly billed for these fees.
One investment fund option available to participants is Company common stock. As a result, transactions related to this investment fund qualify as party-in-interest transactions (See Note 4). Dividends received were $3 thousand for 2020 and $15 thousand for 2019. Purchases and sales for 2020 were $125 thousand and $217 thousand, respectively, and purchases and sales for 2019 were $291 thousand and $127 thousand, respectively. The total realized losses and unrealized gains during 2020 were $56 thousand and $435 thousand, respectively.
U. S. STEEL TUBULAR SERVICES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019
The Plan also holds notes receivable totaling $257 thousand in December 31, 2020 and $335 thousand in December 31, 2019 representing participant loans that qualify as party-in-interest transactions.
9.Stable value common collective trust - The Plan invests in stable value wrap contracts through a stable value common collective trust, the Fidelity Managed Income Portfolio II - Class 3 (MIP II). This investment option calculates its net asset value per unit as of the close of business of the New York Stock Exchange. Investments in wrap contracts are fair valued using a discounted cash flow model which considers recent fee bids as determined by recognized dealers, discount rate and the duration of the underlying portfolio of securities. Underlying debt securities for which quotations are readily available are valued at their most recent bid prices in the principal market in which such securities are normally traded. MIP II consists of seven wrap contracts, which calls for the application of ASC 962-325 (Plan Accounting-Defined Contribution Pension Plans - Investments - Other) for valuation purposes. MIP II is classified as a common collective trust and is classified as an investment measured at net asset value since a market price is not available for this investment in an active market.
As an investment option in the Plan, there are no restrictions on redemptions for this fund. If the Plan were to initiate a full redemption of the collective trust, then the investment adviser reserves the right to temporarily delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner. There are no unfunded commitments related to this investment.
Because the wrap contracts are fully benefit-responsive, contract value is the relevant measurement attribute for that portion of net assets available for benefits attributable to the wrap contracts. Contract value, as reported to the Plan by the wrap contract issuers, represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses.
10. Fair value measurement - ASC Topic 820 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Plan’s investments, and requires additional disclosure about fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The three levels of the fair value hierarchy are summarized below.
•Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Partnership has the ability to access.
•Level 2 - Inputs to the valuation methodology include:
▪Quoted prices for similar assets or liabilities in active markets;
▪Quoted prices for identical or similar assets or liabilities in inactive markets;
▪Inputs other than quoted prices that are observable for the asset or liability;
▪Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.
•Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Plan’s assets are classified as follows:
| | |
| Level 1 |
| Interest-bearing cash |
| Common Stock |
| Mutual Funds |
An instrument’s level is based on the lowest level of any input that is significant to the fair value measurement. Interest-bearing cash is an investment in a short-term money market fund that is valued at $1 per share, which approximates fair value. Common stock is valued at the closing price reported on the active market on which the individual securities are traded. Mutual funds are valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-ended mutual funds that are registered with the U.S. Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded. The stable value common collective trust is composed primarily of fully benefit-responsive investment contracts that are valued at the net asset value of units of the bank collective trust. The net asset value is used as a practical expedient to estimate fair value. This practical expedient would not be used if it is determined to be probable that the fund will sell the investment for an amount different from the reported net asset value. Participant transactions (purchases and sales) may occur daily. If the Plan initiates a full redemption of the collective trust, the issuer reserves the right to require 12 months’ notification in order to ensure that securities liquidations will be carried out in an orderly business manner.
U. S. STEEL TUBULAR SERVICES SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2020 and 2019
The preceding valuation methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Refer to Note 9 for a description of the stable value common collective trust.
There were no Level 2 or 3 assets at December 31, 2020 or December 31, 2019.
There were no transfers to Level 3 during the year ended December 31, 2020.
The following is a summary of the Plan’s assets carried at fair value:
| | | | | | | | |
| Investments at Fair Value at December 31, 2020 |
| ($ in thousands) |
| Asset Classes | Total | Quoted Prices (Level 1) |
|
| Interest-bearing cash | $ | 16 | | $ | 16 | |
| Common stock | 1,232 | | 1,232 | |
| Mutual Funds | 10,523 | | 10,523 | |
| Total assets in the fair value hierarchy | $ | 11,771 | | $ | 11,771 | |
| Investments measured at net asset value (a) | 750 | | |
| Investments at fair value | $ | 12,521 | | |
| | | | | | | | |
| Investments at Fair Value at December 31, 2019 |
| ($ in thousands) |
| Asset Classes | Total | Quoted Prices (Level 1) |
|
| Interest-bearing cash | $ | 7 | | $ | 7 | |
| Common stock | 945 | | 945 | |
| Mutual Funds | 10,384 | | 10,384 | |
| Total assets in the fair value hierarchy | $ | 11,336 | | $ | 11,336 | |
| Investments measured at net asset value (a) | 996 | | |
| Investments at fair value | $ | 12,332 | | |
(a)In accordance with Subtopic 820-10, certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Statements of Net Assets Available for Benefits. These investments represent holdings in the stable value common collective trust.
U. S. STEEL TUBULAR SERVICES SAVINGS PLAN
EIN 25-1897152/PN 029
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2020
| | | | | | | | | | | |
| (a) | (b) | (c) | (e) |
| Identity of Issuer, Borrower, Lessor or Similar Party | Description of Investment, Including Maturity Date, Rate of Interest, Collateral, Par or Maturity Value | Current Value |
| | | |
| * | U. S. Steel Stock Fund - Common Stock | Employer-related security | $ | 1,230,304 | |
| * | U. S. Steel Stock Fund - Stock Purchase Account | Employer-related security | 2,008 | |
| * | Fidelity Contrafund - Class K | Mutual fund | 571,269 | |
| * | Fidelity Diversified International Fund - Class K | Mutual fund | 197,963 | |
| * | Fidelity Freedom Index 2010 Fund - Institutional Premium Class | Mutual fund | 134,564 | |
| * | Fidelity Freedom Index 2020 Fund - Institutional Premium Class | Mutual fund | 1,790,503 | |
| * | Fidelity Freedom Index 2030 Fund - Institutional Premium Class | Mutual fund | 2,528,873 | |
| * | Fidelity Freedom Index 2040 Fund - Institutional Premium Class | Mutual fund | 1,301,700 | |
| * | Fidelity Freedom Index 2050 Fund - Institutional Premium Class | Mutual fund | 1,671,937 | |
| * | Fidelity Freedom Index 2060 Fund - Institutional Premium Class | Mutual fund | 20,519 | |
| * | Fidelity Freedom Index Income Fund - Institutional Premium Class | Mutual fund | 61,260 | |
| * | Fidelity Low-Priced Stock Fund - Class K | Mutual fund | 33,295 | |
| * | Fidelity Real Estate Investment Portfolio | Mutual fund | 11,583 | |
| * | Fidelity 500 Index Fund | Mutual fund | 397,158 | |
| * | Fidelity U.S. Bond Index Fund | Mutual fund | 1,002,371 | |
| T. Rowe Price Emerging Markets Stock Fund | Mutual fund | 139,215 | |
| Janus Henderson Enterprise Fund Class I | Mutual fund | 271,018 | |
| Vanguard Explorer Fund - Admiral Shares | Mutual fund | 238,969 | |
| Vanguard Inflation-Protected Securities Fund Institutional Shares | Mutual fund | 12,472 | |
| Vanguard Windsor II Fund - Admiral Shares | Mutual fund | 137,891 | |
| * | Fidelity Managed Income Portfolio II - Class 3 | Common/Collective Trust | 750,228 | |
| Vanguard Treasury Money Market Fund Investor Shares | Interest-bearing cash | 16,188 | |
| | | |
| * | Participant Loans | Maturity dates of 0 - 5 years with interest rates ranging from 4.25% to 6.50% | 256,975 | |
| | | |
| Total Assets at 12/31/20 | | $ | 12,778,263 | |
| * Party-in-interest | | |
| | | |
| All investments are participant directed. | | |
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the administrator of the U. S. Steel Tubular Services Savings Plan has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on June 22, 2021.
UNITED STATES STEEL AND CARNEGIE PENSION FUND, AS PLAN ADMINISTRATOR
| | | | | |
By: | /s/ Manpreet S. Grewal |
| Manpreet S. Grewal, |
| Comptroller |
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-237966) of 榴莲视频 of our report dated June 22, 2021 relating to the financial statements and supplemental schedule of U. S. Steel Tubular Services Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 22, 2021