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Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]  
Components of net periodic benefit cost
The cost to the company of its retirement benefit plans in each of the three years ended December 31 is shown in the following table:
 
 
Year Ended December 31
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 

$ 516

 

$ 522

 

$ 520

 

$ 36

 

$ 34

 

$ 32

Interest cost
 
1,117

 
1,184

 
1,223

 
96

 
109

 
114

Expected return on plan assets
 
(1,809
)
 
(1,708
)
 
(1,690
)
 
(75
)
 
(68
)
 
(62
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service (credit) cost
 
(58
)
 
(58
)
 
23

 
(51
)
 
(51
)
 
(51
)
Net loss from previous years
 
608

 
427

 
162

 
30

 
21

 
17

Other
 
—

 
7

 
—

 
—

 
—

 
(6
)
Net periodic benefit cost
 

$ 374

 

$ 374

 

$ 238

 

$ 36

 

$ 45

 

$ 44
Changes in unamortized benefit plan costs
The table below summarizes the components of changes in unamortized benefit plan costs for the years ended December 31, 2013, 2012 and 2011:
 
Pension
 
Medical and
 
 
$ in millions
Benefits
 
Life Benefits
 
Total
Changes in unamortized benefit plan costs
 
 
 
 
 
 
Change in net actuarial loss
 

$2,687

 

$138

 

$2,825

Change in prior service cost
 
(608
)
 
6

 
(602
)
Amortization of:
 
 
 
 
 
 
Prior service (cost) credit
 
(23
)
 
51

 
28

Net loss from previous years
 
(162
)
 
(17
)
 
(179
)
Tax benefit related to above items
 
(752
)
 
(71
)
 
(823
)
Change in unamortized benefit plan costs – 2011
 

$1,142

 

$107

 

$1,249

Change in net actuarial loss
 

$2,353

 

$151

 

$2,504

Change in prior service cost
 
(2
)
 
—

 
(2
)
Amortization of:
 
 
 
 
 
 
Prior service credit
 
58

 
51

 
109

Net loss from previous years
 
(427
)
 
(21
)
 
(448
)
Tax benefit related to above items
 
(788
)
 
(72
)
 
(860
)
Change in unamortized benefit plan costs – 2012
 

$1,194

 

$109

 

$1,303

Change in net actuarial loss
 

($2,158
)
 

($280
)
 

($2,438
)
Amortization of:
 
 
 
 
 
 
Prior service credit
 
58

 
51

 
109

Net loss from previous years
 
(608
)
 
(30
)
 
(638
)
Tax expense related to above items
 
1,075

 
102

 
1,177

Change in unamortized benefit plan costs – 2013
 

($1,633
)
 

($157
)
 

($1,790
)
Amounts recorded in accumulated other comprehensive loss
 
 
Pension
Benefits
 
Medical and Life
Benefits
$ in millions
 
2013
 
2012
 
2013
 
2012
Amounts recorded in accumulated other comprehensive loss
 
 
 
 
 
 
 
 
Net actuarial loss
 
($5,291
)
 

($8,057
)
 
($151
)
 
($461
)
Prior service credit
 
423

 
481

 
47

 
98

Income tax benefits related to above items
 
1,928

 
3,003

 
44

 
146

Unamortized benefit plan costs
 
($2,940
)
 

($4,573
)
 
($ 60
)
 
($217
)
Change in projected benefit obligation
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2013
 
2012
 
2013
 
2012
Change in projected benefit obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
$27,746

 
$24,129

 
$2,448

 
$2,235

Service cost
 
516

 
522

 
36

 
34

Interest cost
 
1,117

 
1,184

 
96

 
109

Participant contributions
 
12

 
12

 
77

 
81

Plan amendments
 
—

 
(1
)
 
—

 
—

Actuarial (gain) loss
 
(2,063
)
 
3,114

 
(219
)
 
202

Benefits paid
 
(1,365
)
 
(1,220
)
 
(227
)
 
(227
)
Other
 
9

 
6

 
13

 
14

Projected benefit obligation at end of year
 
$25,972

 
$27,746

 
$2,224

 
$2,448
Change in plan assets and amounts recognized in the consolidated statements of financial position
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2013
 
2012
 
2013
 
2012
Change in plan assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$22,962

 
$21,340

 
$1,062

 

$ 946

Gain on plan assets
 
1,907

 
2,463

 
137

 
119

Employer contributions
 
579

 
366

 
114

 
129

Participant contributions
 
12

 
12

 
77

 
81

Benefits paid
 
(1,365
)
 
(1,220
)
 
(227
)
 
(227
)
Other
 
3

 
1

 
12

 
14

Fair value of plan assets at end of year
 
24,098

 
22,962

 
1,175

 
1,062

Funded status
 
($ 1,874
)
 

($4,784
)
 
($1,049
)
 
($1,386
)
Amounts recognized in the Consolidated Statements of Financial Position
 
 
 
 
 
 
 
 
Non-current assets
 

$ 117

 

$ 7

 

$ 72

 

$ 49

Current liability
 
(122
)
 
(111
)
 
(36
)
 
(30
)
Non-current liability
 
(1,869
)
 
(4,680
)
 
(1,085
)
 
(1,405
)
Amounts expected to be Recognized in 2013 Net Periodic Benefit Cost
The following table shows those amounts expected to be recognized in net periodic benefit cost in 2014:
$ in millions
Pension Benefits
 
Medical and
Life Benefits
Amounts expected to be recognized in 2014 net periodic benefit cost
 
 
 
 
 
Net actuarial loss
 
$327

 
 
$ 9

Prior service credit
 
(59
)
 
 
(30
)
Pension plans with accumulated benefit obligations in excess of fair value of plan assets
Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows: 
 
 
December 31
$ in millions
 
2013
 
2012
Projected benefit obligation
 

$24,129

 

$27,645

Accumulated benefit obligation
 
23,830

 
27,146

Fair value of plan assets
 
22,138

 
22,853
Weighted-average plan assumptions
On a weighted-average basis, the following assumptions were used to determine the benefit obligations and the net periodic benefit cost:
 
 
Pension Benefits  
 
Medical and
Life Benefits
  
 
2013
 
2012
 
2013
 
2012
Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.99
%
 
4.12
%
 
4.90
%
 
4.02
%
Initial cash balance crediting rate assumed for the next year
 
3.90
%
 
3.00
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
4.70
%
 
4.25
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2019

 
2018

 
 
 
 
Rate of compensation increase
 
3.00
%
 
2.75
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
6.50
%
 
7.00
%
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate)
 
 
 
 
 
5.00
%
 
5.00
%
Year that the health care cost trend rate reaches the ultimate trend rate
 
 
 
 
 
2017

 
2017

Assumptions used to determine benefit cost for the year ended December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.12
%
 
5.03
%
 
4.02
%
 
5.02
%
Initial cash balance crediting rate assumed for the next year
 
3.00
%
 
3.25
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
4.25
%
 
4.50
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2018

 
2017

 
 
 
 
Expected long-term return on plan assets
 
8.00
%
 
8.25
%
 
7.33
%
 
7.44
%
Rate of compensation increase
 
2.75
%
 
2.75
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
7.00
%
 
7.50
%
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate)
 
 
 
 
 
5.00
%
 
5.00
%
Year that the health care cost trend rate reaches the ultimate trend rate
 
 
 
 
 
2017

 
2017
Effect of one-percentage point change in assumed health care cost trend rates
A one-percentage-point change in the initial through the ultimate health care cost trend rates would have had the following estimated effect on 2013 other post-retirement benefit results:
$ in millions
1-Percentage-
Point Decrease
 
1-Percentage-
Point Increase
Increase (decrease) from change in health care cost trend rates to
 
 
 
 
 
Total service and interest cost
 
 $
(5
)
 
 
 $
4

Other post-retirement benefit liability
 
(81
)
 
 
67
Plan asset allocation ranges
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents(1)
 

$ 32

 

$ 92

 

$ 1,467

 

$ 1,748

 
 
 
 
 

$ 1,499

 

$ 1,840

Domestic equities
 
4,163

 
3,657

 
287

 
318

 
2

 

$ 2

 
4,452

 
3,977

International equities
 
2,473

 
1,700

 
1,741

 
2,319

 
 
 
 
 
4,214

 
4,019

Fixed income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
 
 
 
 
 
1,602

 
1,780

 
 
 
 
 
1,602

 
1,780

U.S. Government Agency
 
 
 
 
 
974

 
968

 
 
 
 
 
974

 
968

Non-U.S. Government
 
 
 
 
 
422

 
401

 
 
 
 
 
422

 
401

Corporate debt
 
 
 
 
 
4,744

 
4,123

 
 
 
 
 
4,744

 
4,123

Asset backed
 
 
 
 
 
545

 
528

 
4

 
4

 
549

 
532

High yield debt
 
 
 
 
 
922

 
1,139

 
1

 
28

 
923

 
1,167

Bank loans
 
 
 
 
 
185

 
223

 
 
 
 
 
185

 
223

Alternative Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
 
 
 
 
 
 
 
 
821

 
758

 
821

 
758

Private equities
 
 
 
 
 
 
 
 
 
2,075

 
1,980

 
2,075

 
1,980

Real estate
 
 
 
 
 
 
 
 
 
2,767

 
2,256

 
2,767

 
2,256

Other
 
26

 
(5
)
 
20

 
5

 
  
 
  
 
46

 
—

Fair value of plan assets at the end of the year
 

$6,694

 

$5,444

 

$12,909

 

$13,552

 

$5,670

 

$5,028

 

$25,273

 

$24,024


(1)
Cash and cash equivalents are predominantly held in money market funds.
For the majority of the plans’ assets, the investment policies require that the asset allocation be maintained within the following ranges as of December 31, 2013:
  
 
Asset Allocation Ranges
Domestic equities
 
10% - 30%
International equities
 
5% - 25%
Fixed income securities
 
30% - 50%
Alternative investments
 
15% - 30%
Changes in fair value of plan assets, significant unobservable inputs
The changes in the fair value of the pension and VEBA plan trust assets measured using Level 3 significant unobservable inputs during 2013 and 2012, are as follows:
$ in millions
 
Hedge funds and High-yield debt
 
Private equities
 
Real Estate
 
Other
 
Total
Balance as of December 31, 2011
 

$1,446

 

$2,098

 

$1,788

 

$6

 

$5,338

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses), net
 
23

 
(122
)
 
68

 
5

 
(26
)
Realized gains (losses), net
 
47

 
—

 
—

 
(5
)
 
42

Purchases
 
—

 
259

 
846

 
—

 
1,105

Sales
 
(730
)
 
(255
)
 
(446
)
 
—

 
(1,431
)
Balance as of December 31, 2012
 

$ 786

 

$1,980

 

$2,256

 

$6

 

$5,028

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses), net
 
(16
)
 
112

 
262

 
—

 
358

Realized gains (losses), net
 
43

 
—

 
—

 
—

 
43

Purchases
 
200

 
666

 
763

 
—

 
1,629

Sales
 
(191
)
 
(683
)
 
(514
)
 
—

 
(1,388
)
Balance as of December 31, 2013
 

$ 822

 

$2,075

 

$2,767

 

$6

 

$5,670
Estimated benefit payments
The following table reflects estimated future benefit payments for the next ten years, based upon the same assumptions used to measure the benefit obligation, and includes expected future employee service, as of December 31, 2013:
$ in millions
 
Pension Plans
 
Medical and
Life Plans
Year Ending December 31
 
 
 
 
2014
 

$1,341

 

$148

2015
 
1,394

 
154

2016
 
1,446

 
160

2017
 
1,500

 
165

2018
 
1,557

 
169

2019 through 2023
 
8,556

 
860