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Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Components of net periodic benefit cost
The cost to the company of its retirement benefit plans is shown in the following table:
 
 
Year Ended December 31
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
457

 
$
516

 
$
522

 
$
34

 
$
36

 
$
34

Interest cost
 
1,260

 
1,117

 
1,184

 
99

 
96

 
109

Expected return on plan assets
 
(1,871
)
 
(1,809
)
 
(1,708
)
 
(83
)
 
(75
)
 
(68
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
 
(59
)
 
(58
)
 
(58
)
 
(45
)
 
(51
)
 
(51
)
Net loss from previous years
 
327

 
608

 
427

 
13

 
30

 
21

Other
 
1

 
—

 
7

 
—

 
—

 
—

Net periodic benefit cost
 
$
115

 
$
374

 
$
374

 
$
18

 
$
36

 
$
45
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, 2014, 2013 and 2012:
$ in millions
 
Pension Benefits
 
Medical and
Life Benefits
 
Total
Changes in unamortized benefit plan costs
 
 
 
 
 
 
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
)
Change in net actuarial loss
 
$
3,833

 
$
234

 
$
4,067

Change in prior service cost
 
—

 
(92
)
 
(92
)
Amortization of:
 
 
 
 
 
 
Prior service credit
 
59

 
45

 
104

Net loss from previous years
 
(327
)
 
(13
)
 
(340
)
Tax benefit related to above items
 
(1,357
)
 
(66
)
 
(1,423
)
Change in unamortized benefit plan costs – 2014
 
$
2,208

 
$
108

 
$
2,316
Amounts recorded in accumulated other comprehensive loss
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2014
 
2013
 
2014
 
2013
Amounts recorded in accumulated other comprehensive loss
 
 
 
 
 
 
 
 
Net actuarial loss
 
$
(8,797
)
 
$
(5,291
)
 
$
(372
)
 
$
(151
)
Prior service credit
 
364

 
423

 
94

 
47

Income tax benefits related to above items
 
3,285

 
1,928

 
110

 
44

Unamortized benefit plan costs
 
$
(5,148
)
 
$
(2,940
)
 
$
(168
)
 
$
(60
)
Change in projected benefit obligation
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2014
 
2013
 
2014
 
2013
Change in projected benefit obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
$
25,972

 
$
27,746

 
$
2,224

 
$
2,448

Service cost
 
457

 
516

 
34

 
36

Interest cost
 
1,260

 
1,117

 
99

 
96

Participant contributions
 
19

 
12

 
50

 
77

Plan amendments
 
—

 
—

 
(92
)
 
—

Actuarial (gain) loss
 
4,273

 
(2,063
)
 
258

 
(219
)
Benefits paid
 
(1,409
)
 
(1,365
)
 
(186
)
 
(227
)
Other
 
(47
)
 
9

 
11

 
13

Projected benefit obligation at end of year
 
$
30,525

 
$
25,972

 
$
2,398

 
$
2,224
Change in plan assets and amounts recognized in the consolidated statements of financial position
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2014
 
2013
 
2014
 
2013
Change in plan assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
24,098

 
$
22,962

 
$
1,175

 

$1,062

Net gain on plan assets
 
2,298

 
1,907

 
108

 
137

Employer contributions
 
78

 
579

 
57

 
114

Participant contributions
 
19

 
12

 
50

 
77

Benefits paid
 
(1,409
)
 
(1,365
)
 
(186
)
 
(227
)
Other
 
(21
)
 
3

 
12

 
12

Fair value of plan assets at end of year
 
25,063

 
24,098

 
1,216

 
1,175

Funded status
 
$
(5,462
)
 
$
(1,874
)
 
$
(1,182
)
 
$
(1,049
)
Amounts recognized in the Consolidated Statements of Financial Position
 
 
 
 
 
 
 
 
Non-current assets
 
$
3

 
$
117

 
$
80

 
$
72

Current liability
 
(133
)
 
(122
)
 
(39
)
 
(36
)
Non-current liability
 
(5,332
)
 
(1,869
)
 
(1,223
)
 
(1,085
)
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 2015:
$ in millions
Pension Benefits
 
Medical and
Life Benefits
Amounts expected to be recognized in 2015 net periodic benefit cost
 
 
 
 
 
Net actuarial loss
 
$
682

 
 
$
27

Prior service credit
 
(60
)
 
 
(28
)
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
 
2014
 
2013
Projected benefit obligation
 
$
30,405

 
$
24,129

Accumulated benefit obligation
 
30,172

 
23,830

Fair value of plan assets
 
24,940

 
22,138
Weighted-average plan assumptions
On a weighted-average basis, the following assumptions were used to determine benefit obligations and net periodic benefit cost:
 
 
Pension Benefits  
 
Medical and
Life Benefits
  
 
2014
 
2013
 
2014
 
2013
Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.12
%
 
4.99
%
 
4.04
%
 
4.90
%
Initial cash balance crediting rate assumed for the next year
 
2.75
%
 
3.90
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
3.50
%
 
4.70
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2020

 
2019

 
 
 
 
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
6.50
%
 
6.50
%
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
 
 
 
 
 
2019

 
2017

Assumptions used to determine benefit cost for the year ended 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

 
 
 
 
Expected long-term return on plan assets
 
8.00
%
 
8.00
%
 
7.45
%
 
7.33
%
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
Plan asset allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents (1)
 

$ 38

 

$ 32

 

$ 1,737

 

$ 1,467

 
 
 
 
 

$ 1,775

 

$ 1,499

Domestic equities
 
4,729

 
4,163

 
147

 
287

 
$
2

 

$ 2

 
4,878

 
4,452

International equities
 
2,675

 
2,473

 
2,062

 
1,741

 
 
 
 
 
4,737

 
4,214

Fixed income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
 
 
 
 
 
957

 
1,602

 
 
 
 
 
957

 
1,602

U.S. Government Agency
 
 
 
 
 
909

 
974

 
 
 
 
 
909

 
974

Non-U.S. Government
 
 
 
 
 
440

 
422

 
 
 
 
 
440

 
422

Corporate debt
 
 
 
 
 
5,710

 
4,744

 
 
 
 
 
5,710

 
4,744

Asset backed
 
 
 
 
 
604

 
545

 
4

 
4

 
608

 
549

High yield debt
 
 
 
 
 
586

 
922

 
—

 
1

 
586

 
923

Bank loans
 
 
 
 
 
228

 
185

 
 
 
 
 
228

 
185

Alternative Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
 
 
 
 
 
 
 
 
632

 
821

 
632

 
821

Private equities
 
 
 
 
 
 
 
 
 
2,030

 
2,075

 
2,030

 
2,075

Real estate
 
 
 
 
 
 
 
 
 
2,759

 
2,767

 
2,759

 
2,767

Other
 
32

 
26

 
(2
)
 
20

 
  
 
  
 
30

 
46

Fair value of plan assets at the end of the year
 

$7,474

 

$6,694

 

$13,378

 

$12,909

 

$5,427

 

$5,670

 

$26,279

 

$25,273


(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, 2014:
  
 
Asset Allocation Ranges
Domestic equities
 
13% - 33%
International equities
 
7% - 27%
Fixed income securities
 
30% - 50%
Alternative investments
 
10% - 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 2014 and 2013, are as follows:
$ in millions
 
Hedge funds and High-yield debt
 
Private equities
 
Real Estate
 
Other
 
Total
Balance as of December 31, 2012
 
$
786

 
$
1,980

 
$
2,256

 
$
6

 
$
5,028

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

 
262

 
—

 
358

Realized gains, 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

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses), net
 
(46
)
 
(60
)
 
173

 
—

 
67

Realized gains (losses), net
 
89

 
10

 
71

 
—

 
170

Purchases
 
21

 
431

 
61

 
—

 
513

Sales
 
(254
)
 
(426
)
 
(313
)
 
—

 
(993
)
Balance as of December 31, 2014
 
$
632

 
$
2,030

 
$
2,759

 
$
6

 
$
5,427
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, 2014:
$ in millions
 
Pension Plans
 
Medical and
Life Plans
Year Ending December 31
 
 
 
 
2015
 
$
1,395

 
$
154

2016
 
1,452

 
158

2017
 
1,506

 
161

2018
 
1,565

 
164

2019
 
1,623

 
166

2020 through 2024
 
8,975

 
828