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Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [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
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Components of net periodic benefit cost (benefit)
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
367

 
$
404

 
$
388

 
$
16

 
$
21

 
$
20

Interest cost
 
1,360

 
1,226

 
1,250

 
80

 
76

 
85

Expected return on plan assets
 
(2,101
)
 
(2,217
)
 
(1,885
)
 
(92
)
 
(101
)
 
(89
)
Amortization of prior service credit
 
(59
)
 
(58
)
 
(57
)
 
(3
)
 
(21
)
 
(22
)
Mark-to-market expense (benefit)
 
1,783

 
699

 
(445
)
 
17

 
(44
)
 
(91
)
Other
 
—

 
—

 
(7
)
 
—

 
—

 
—

Net periodic benefit cost (benefit)
 
$
1,350

 
$
54

 
$
(756
)
 
$
18

 
$
(69
)
 
$
(97
)
Changes in unamortized benefit plan costs
The table below summarizes the components of changes in unamortized prior service credit for the years ended December 31, 2017, 2018 and 2019:
$ in millions
 
Pension Benefits
 
Medical and Life Benefits
 
Total
Changes in unamortized prior service credit
 
 
 
 
 
 
Amortization of prior service credit
 
$
57

 
$
22

 
$
79

Tax expense
 
(26
)
 
(9
)
 
(35
)
Change in unamortized prior service credit – 2017
 
31

 
13

 
44

Amortization of prior service credit
 
58

 
21

 
79

Tax expense
 
(14
)
 
(5
)
 
(19
)
Change in unamortized prior service credit – 2018
 
44

 
16

 
60

Amortization of prior service credit
 
59

 
3

 
62

Tax expense
 
(14
)
 
(1
)
 
(15
)
Change in unamortized prior service credit – 2019
 
$
45

 
$
2

 
$
47
Change in plan assets and amounts recognized in the consolidated statements of financial position
The following table sets forth the funded status and amounts recognized in the consolidated statements of financial position for the company’s defined benefit retirement plans. Pension benefits data includes the qualified plans, foreign plans and U.S. unfunded non-qualified plans for benefits provided to directors, officers and certain
employees. The company uses a December 31 measurement date for its plans.
 
 
Pension Benefits
 
Medical and Life Benefits
$ in millions
 
2019
 
2018
 
2019
 
2018
Plan Assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
27,150

 
$
27,226

 
$
1,247

 
$
1,338

Net gain (loss) on plan assets
 
5,025

 
(1,043
)
 
234

 
(65
)
Employer contributions
 
221

 
370

 
42

 
38

Participant contributions
 
8

 
9

 
24

 
25

Benefits paid
 
(1,763
)
 
(1,685
)
 
(156
)
 
(148
)
Acquired plan assets
 
—

 
2,293

 
—

 
58

Other
 
5

 
(20
)
 
1

 
1

Fair value of plan assets at end of year
 
30,646

 
27,150

 
1,392

 
1,247

Projected Benefit Obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
32,231

 
31,967

 
1,930

 
2,110

Service cost
 
367

 
404

 
16

 
21

Interest cost
 
1,360

 
1,226

 
80

 
76

Participant contributions
 
8

 
9

 
24

 
25

Actuarial loss (gain)
 
4,708

 
(2,561
)
 
159

 
(211
)
Benefits paid
 
(1,763
)
 
(1,685
)
 
(156
)
 
(148
)
Acquired benefit obligation
 
—

 
2,895

 
—

 
50

Other
 
3

 
(24
)
 
(5
)
 
7

Projected benefit obligation at end of year
 
36,914

 
32,231

 
2,048

 
1,930

Funded status
 
$
(6,268
)
 
$
(5,081
)
 
$
(656
)
 
$
(683
)
 
 
 
 
 
 
 
 
 
Classification of amounts recognized in the consolidated statements of financial position
 
 
 
 
 
 
 
 
Non-current assets
 
$
124

 
$
77

 
$
151

 
$
124

Current liability
 
(173
)
 
(164
)
 
(47
)
 
(46
)
Non-current liability
 
(6,219
)
 
(4,994
)
 
(760
)
 
(761
)
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
 
2019
 
2018
Projected benefit obligation
 
$
34,715

 
$
30,259

Accumulated benefit obligation
 
34,305

 
29,961

Fair value of plan assets
 
28,324

 
25,101
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
  
 
2019
 
2018
 
2019
 
2018
Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
3.39
%
 
4.31
%
 
3.35
%
 
4.30
%
Initial cash balance crediting rate assumed for the next year
 
2.39
%
 
3.00
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
2.64
%
 
3.25
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2025

 
2024

 
 
 
 
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
5.90
%
 
6.20
%
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
 
 
 
 
 
2023

 
2023

Assumptions used to determine benefit cost for the year ended December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.31
%
 
3.68
%
 
4.30
%
 
3.66
%
Initial cash balance crediting rate assumed for the next year
 
3.00
%
 
2.75
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
3.25
%
 
3.00
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2024

 
2023

 
 
 
 
Expected long-term return on plan assets
 
8.00
%
 
8.00
%
 
7.67
%
 
7.65
%
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
6.20
%
 
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
 
 
 
 
 
2023

 
2023
Plan asset allocation
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, 2019:
  
 
Asset Allocation Ranges
Cash and cash equivalents
 
0% - 12%
Global public equities
 
30% - 50%
Fixed-income securities
 
20% - 40%
Alternative investments
 
18% - 38%

The table below provides the fair values of the company’s pension and Voluntary Employee Beneficiary Association (VEBA) trust plan assets at December 31, 2019 and 2018, by asset category. The table also identifies the level of inputs used to determine the fair value of assets in each category. See Note 1 for the definitions of these levels. Certain investments that are measured at fair value using NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy table. The total fair value of these investments is included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above. As of December 31, 2019 and 2018, there were no investments expected to be sold at a value materially different than NAV.
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
233

 
$
209

 
$
2,572

 
$
2,655

 
 
 
 
 
$
2,805

 
$
2,864

U.S. equities
 
3,341

 
2,859

 
 
 
 
 
 
 
 
 
3,341

 
2,859

International equities
 
3,271

 
2,711

 
 
 
 
 
$
2

 
$
1

 
3,273

 
2,712

Fixed-income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
 
20

 
26

 
2,716

 
1,501

 
 
 
 
 
2,736

 
1,527

U.S. Government Agency
 
 
 
 
 
297

 
322

 
 
 
 
 
297

 
322

Non-U.S. Government
 
 
 
 
 
194

 
206

 
 
 
 
 
194

 
206

Corporate debt
 
28

 
34

 
4,513

 
4,141

 
 
 
 
 
4,541

 
4,175

Asset backed
 
 
 
 
 
892

 
297

 
 
 
 
 
892

 
297

High yield debt
 
30

 
11

 
104

 
153

 
 
 
 
 
134

 
164

Bank loans
 
 
 
 
 
33

 
20

 
 
 
 
 
33

 
20

Other assets
 
(9
)
 
15

 
59

 
51

 
2

 
2

 
52

 
68

Investments valued using NAV as a practical expedient
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. equities
 
 
 
 
 
 
 
 
 
 
 
 
 
1,131

 
1,170

International equities
 
 
 
 
 
 
 
 
 
 
 
 
 
5,636

 
4,017

Fixed-income funds
 
 
 
 
 
 
 
 
 
 
 
 
 
438

 
1,386

Hedge funds
 
 
 
 
 
 
 
 
 
 
 
 
 
246

 
351

Opportunistic investments
 
 
 
 
 
 
 
 
 
 
 
 
 
1,459

 
1,367

Private equity funds
 
 
 
 
 
 
 
 
 
 
 
 
 
2,454

 
2,510

Real estate funds
 
 
 
 
 
 
 
 
 
 
 
 
 
2,376

 
2,382

Fair value of plan assets at the end of the year
 
$
6,914

 
$
5,865

 
$
11,380

 
$
9,346

 
$
4

 
$
3

 
$
32,038

 
$
28,397
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, 2019:
$ in millions
 
Pension Plans
 
Medical and Life Plans
 
Total
Year Ending December 31
 
 
 
 
 
 
2020
 
$
1,849

 
$
151

 
$
2,000

2021
 
1,898

 
150

 
2,048

2022
 
1,947

 
139

 
2,086

2023
 
1,991

 
138

 
2,129

2024
 
2,039

 
136

 
2,175

2025 through 2029
 
10,702

 
630

 
11,332