Retirement Benefits

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Retirement Benefits

Note 13 — Retirement Benefits

Defined Benefit Plans

WTW sponsors both qualified and non-qualified defined benefit pension plans throughout the world. The majority of our plan assets and obligations are in the U.S. and the U.K. We have also included disclosures related to defined benefit plans in certain other countries, including Canada, France, Germany, Switzerland and Ireland. Together, these disclosed funded and unfunded plans represent 98% of WTW’s pension obligations and are presented herein.

As part of these obligations, in the U.S., the U.K. and Canada, we have non-qualified plans that provide for the additional pension benefits that would be covered under the qualified plan in the respective country were it not for statutory maximums. The non-qualified plans are unfunded.

The significant plans within each grouping are described below:

United States

Legacy Willis – This plan was frozen in 2009. Approximately 600 WTW employees in the United States have a frozen accrued benefit under this plan.

WTW Plan – Substantially all U.S. employees are eligible to participate in this plan. Benefits are provided under a stable value pension plan design. The original stable value design came into effect on January 1, 2012. Plan participants prior to July 1, 2017 earn benefits without having to make employee contributions, and all newly-eligible employees after that date were required to contribute 2% of pay on an after-tax basis to participate in the plan. Effective January 1, 2024, stable value benefits are earned under the same contributory formula for all eligible colleagues. To participate, plan participants are required to contribute 2% of eligible earnings (base salary only) on an after-tax basis.

United Kingdom

Legacy Willis – This plan covers approximately 400 WTW employees in the U.K. The plan is now closed to new entrants. New employees in the U.K. are offered the opportunity to join a defined contribution plan.

Legacy Towers Watson – Benefit accruals earned under the Legacy Watson Wyatt defined benefit plan (predominantly pension benefits) ceased on February 28, 2015, although benefits earned prior to January 1, 2008 retain a link to salary until the employee leaves the Company. Benefit accruals earned under the legacy Towers Perrin defined benefit plan (predominantly lump sum benefits) were frozen on March 31, 2008. All participants now accrue defined contribution benefits.

Legacy Miller – This plan is no longer with WTW following the divestiture of its Miller business in March 2021 (see Note 3 — Acquisitions and Divestitures for further information). The plan provided retirement benefits based on members’ salaries at the point at which they ceased to accrue benefits under the scheme.

Other

Canada (WTW) – Participants accrue qualified and non-qualified benefits based on a career-average benefit formula. Additionally, participants can choose to make voluntary contributions to purchase enhancements to their pension.

France (legacy broking business) – The mandatory retirement indemnity plan is a termination benefit which provides lump sum benefits at retirement. There is no vesting before the retirement date, and the benefit formula is determined through the collective bargaining agreement and the labor code. All employees with permanent employment contracts are eligible.

Germany – The defined benefit plans are closed to new entrants and include certain legacy employee populations hired before 2011. These benefits are primarily account-based, with some long-service participants continuing to accrue benefits according to grandfathered final-average-pay formulas.

Ireland (Legacy Willis) – Benefit accruals ceased effective from December 31, 2019; however accrued benefits for active employees are indexed to salary increases (to a maximum annual salary of €150,000) until the member leaves the Company. A future service retirement provision is being provided on a defined contribution basis.

Ireland (Legacy Towers Watson) – Benefit accruals ceased effective from May 1, 2015; however accrued benefits for active employees are indexed to salary increases (to a maximum annual salary of €160,000) until the member leaves the Company. A future service retirement provision is being provided on a defined contribution basis.

Switzerland (WTW) – The defined benefit plans require all employees with local employment contracts to participate. The Company provides benefits in excess of the mandatory minimum required under Swiss occupational pension law. Participants continue to accrue benefits until retirement or upon leaving the Company.

Amounts Recognized in our Consolidated Financial Statements

The following schedules provide information concerning the defined benefit pension plans as of and for the years ended December 31, 2023 and 2022:

	2023									2022
	U.S.			U.K.			Other			U.S.			U.K.			Other
Change in Benefit Obligation
Benefit obligation, beginning of year	$	3,871		$	2,435		$	655		$	5,096		$	4,369		$	922
Service cost		56			6			14			77			12			22
Interest cost		195			120			28			119			70			15
Employee contributions		17			—			1			16			—			1
Actuarial losses/(gains)		201			(32	)		72			(1,186	)		(1,434	)		(221	)
Settlements		(11	)		—			(2	)		(25	)		(5	)		(2	)
Benefits paid		(230	)		(116	)		(35	)		(226	)		(130	)		(30	)
Other		(1	)		—			3			—			—			2
Foreign currency changes		—			145			26			—			(447	)		(54	)
Benefit obligation, end of year	$	4,098		$	2,558		$	762		$	3,871		$	2,435		$	655
Change in Plan Assets
Fair value of plan assets, beginning of     year	$	3,823		$	2,999		$	580		$	4,710		$	5,266		$	739
Actual return on plan assets		173			(3	)		67			(694	)		(1,622	)		(124	)
Employer contributions		31			13			36			42			33			38
Employee contributions		17			—			1			16			—			1
Settlements		(11	)		—			(2	)		(25	)		(5	)		(2	)
Benefits paid		(230	)		(116	)		(35	)		(226	)		(130	)		(30	)
Other		—			—			3			—			—			2
Foreign currency changes		—			176			23			—			(543	)		(44	)
Fair value of plan assets, end of year	$	3,803		$	3,069		$	673		$	3,823		$	2,999		$	580
Funded status at end of year	$	(295	)	$	511		$	(89	)	$	(48	)	$	564		$	(75	)
Accumulated Benefit Obligation	$	4,098		$	2,558		$	733		$	3,871		$	2,435		$	629
Components on the Consolidated    Balance Sheet
Pension benefits assets	$	—		$	516		$	52		$	179		$	569		$	57
Current liability for pension benefits	$	(24	)	$	(1	)	$	(5	)	$	(26	)	$	—		$	(5	)
Non-current liability for pension    benefits	$	(271	)	$	(4	)	$	(136	)	$	(201	)	$	(5	)	$	(127	)
	$	(295	)	$	511		$	(89	)	$	(48	)	$	564		$	(75	)

For the year ended December 31, 2023, bond yields decreased, driving decreases in the discount rates and increasing the benefit obligation for all plans although certain U.K. plans benefited from favorable changes in demographic assumptions and plan experience. The U.K. and Other plans also had unfavorable effects from foreign exchange, and the U.S. plan had a change in mortality assumptions, all of which increased their respective benefit obligations.

For the year ended December 31, 2022, bond yields increased, driving an increase in the discount rates and actuarial gains for all plans. The U.K. and Other plans also had favorable effects from foreign exchange on their benefit obligations.

Amounts recognized in accumulated other comprehensive loss as of December 31, 2023 and 2022 consist of:

	2023						2022
	U.S.		U.K.		Other		U.S.		U.K.		Other
Net actuarial loss	$	915	$	1,674	$	82	$	597	$	1,497	$	36
Net prior service loss/(gain)		—		19		8		—		6		9
Accumulated other comprehensive loss	$	915	$	1,693	$	90	$	597	$	1,503	$	45

The following table presents the projected benefit obligation and fair value of plan assets for our plans that have a projected benefit obligation in excess of plan assets as of December 31, 2023 and 2022:

	2023						2022
	U.S.		U.K.		Other		U.S.		U.K.		Other
Projected benefit obligation at end of year	$	4,098	$	5	$	324	$	939	$	5	$	278
Fair value of plan assets at end of year	$	3,803	$	—	$	182	$	713	$	—	$	145

The following table presents the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for our plans that have an accumulated benefit obligation in excess of plan assets as of December 31, 2023 and 2022.

	2023						2022
	U.S.		U.K.		Other		U.S.		U.K.		Other
Projected benefit obligation at end of year	$	4,098	$	5	$	324	$	939	$	5	$	238
Accumulated benefit obligation at end of year	$	4,098	$	5	$	309	$	939	$	5	$	228
Fair value of plan assets at end of year	$	3,803	$	—	$	182	$	713	$	—	$	106

The components of the net periodic benefit income and other amounts recognized in other comprehensive (income)/loss for the years ended December 31, 2023, 2022 and 2021 for the defined benefit pension plans are as follows:

	2023									2022									2021
	U.S.			U.K.			Other			U.S.			U.K.			Other			U.S.			U.K.			Other
Components of net periodic    benefit (income)/cost:
Service cost	$	56		$	6		$	14		$	77		$	12		$	22		$	79		$	17		$	24
Interest cost		195			120			28			119			70			15			94			56			12
Expected return on plan    assets		(304	)		(162	)		(38	)		(331	)		(144	)		(38	)		(312	)		(170	)		(37	)
Amortization of unrecognized    prior service (credit)/cost		—			(12	)		1			—			(12	)		1			—			(17	)		1
Amortization of unrecognized    actuarial loss		13			48			—			14			29			3			37			27			6
Settlement		1			—			(1	)		4			1			(1	)		1			2			2
Curtailment gain		—			—			—			—			—			—			—			(1	)		—
Other		—			—			—			—			—			—			1			—			—
Net periodic benefit (income)/cost	$	(39	)	$	—		$	4		$	(117	)	$	(44	)	$	2		$	(100	)	$	(86	)	$	8
Other changes in plan assets     and benefit obligations     recognized in other     comprehensive (income)/loss:
Net actuarial (gain)/loss	$	332		$	133		$	43		$	(161	)	$	332		$	(59	)	$	(328	)	$	140		$	(61	)
Amortization of unrecognized    actuarial loss		(13	)		(48	)		—			(14	)		(29	)		(3	)		(37	)		(27	)		(6	)
Prior service cost		—			—			—			—			—			—			—			—			12
Amortization of unrecognized     prior service credit/(cost)		—			12			(1	)		—			12			(1	)		—			17			(1	)
Settlement		(1	)		—			1			(4	)		(1	)		1			(1	)		(2	)		(2	)
Curtailment gain		—			—			—			—			—			—			—			1			—
Plan (disposal)/addition		—			—			—			—			—			—			—			(34	)		8
Total recognized in other    comprehensive (income)/loss		318			97			43			(179	)		314			(62	)		(366	)		95			(50	)
Total recognized in net periodic     benefit (income)/cost and other     comprehensive (income)/loss	$	279		$	97		$	47		$	(296	)	$	270		$	(60	)	$	(466	)	$	9		$	(42	)

Assumptions Used in the Valuations of the Defined Benefit Pension Plans

The determination of the Company’s obligations and annual expense under the plans is based on a number of assumptions that, given the longevity of the plans, are long-term in focus. A change in one or a combination of these assumptions could have a material impact on our projected benefit obligation. However, certain of these changes, such as changes in the discount rate and actuarial assumptions, are not recognized immediately in net income, but are instead recorded in other comprehensive income. The accumulated gains and losses not yet recognized in net income are amortized into net income as a component of the net periodic benefit cost/(income) generally based on the average working life expectancy or remaining life expectancy, where appropriate, of each of the plan’s active participants to the extent that the net gains or losses as of the beginning of the year exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation.

The Company considers several factors prior to the start of each fiscal year when determining the appropriate annual assumptions, including economic forecasts, relevant benchmarks, historical trends, portfolio composition and peer company comparisons. These assumptions, used to determine our pension liabilities and pension expense, are reviewed annually by senior management and changed when appropriate. A discount rate will be changed annually if underlying rates have moved, whereas an expected long-term return on assets will be changed less frequently as longer-term trends in asset returns emerge or long-term target asset allocations are revised. To calculate the discount rate, we use the granular approach to determining service and interest costs. The expected rate of return assumptions for all plans are supported by an analysis of the weighted-average yield expected to be achieved based upon the anticipated makeup of the plans’ investments. Other material assumptions include rates of participant mortality, and the expected long-term rate of compensation and pension increases.

The following assumptions were used in the valuations of WTW’s defined benefit pension plans. The assumptions presented in each column represent the weighted-average of rates for all plans included in the U.S., U.K., and Other groups. The assumptions used to determine net periodic benefit cost for the fiscal years ended December 31, 2023, 2022 and 2021 were as follows:

	Years ended December 31,
	2023			2022			2021
	U.S.	U.K.	Other	U.S.	U.K.	Other	U.S.	U.K.	Other
Discount rate - PBO	5.4%	5.0%	4.3%	2.8%	1.9%	2.0%	2.5%	1.5%	1.7%
Discount rate - service cost	5.5%	5.0%	4.3%	3.0%	1.9%	2.4%	2.7%	1.6%	2.3%
Discount rate - interest cost on    service cost	5.3%	4.9%	4.3%	2.5%	1.8%	2.2%	2.0%	1.4%	2.0%
Discount rate - interest cost on PBO	5.2%	4.9%	4.3%	2.4%	1.8%	1.8%	1.8%	1.2%	1.3%
Expected long-term rate of return    on assets	8.2%	5.3%	6.5%	7.2%	3.0%	5.4%	7.2%	3.1%	5.4%
Rate of increase in compensation     levels	4.3%	3.4%	2.4%	4.3%	3.4%	2.3%	4.3%	3.0%	2.3%

The following tables present the assumptions used in the valuation to determine the projected benefit obligation for the fiscal years ended December 31, 2023 and 2022:

	December 31, 2023			December 31, 2022
	U.S.	U.K.	Other	U.S.	U.K.	Other
Discount rate	5.1%	4.7%	3.8%	5.4%	5.0%	4.3%
Rate of increase in compensation levels	4.3%	3.3%	2.4%	4.3%	3.4%	2.4%

The expected return on plan assets was determined on the basis of the weighted-average of the expected future returns of the various asset classes, using the target allocations shown below. The Company’s pension plan asset target allocations as of December 31, 2023 were as follows (note the French plan is unfunded):

	U.S.		U.K.		Switzerland	Canada	Germany	Ireland
Asset Category	WTW	Willis	Willis	Towers Watson	WTW	WTW	WTW	Willis	Towers Watson
Equity securities	23%	30%	—%	1%	53%	40%	34%	30%	40%
Debt securities	33%	33%	35%	19%	14%	50%	62%	28%	30%
Real estate	16%	11%	—%	1%	28%	5%	—%	3%	—%
Other	28%	26%	65%	79%	5%	5%	4%	39%	30%
Total	100%	100%	100%	100%	100%	100%	100%	100%	100%

Our investment strategy is designed to generate returns that will reduce the interest rate risk inherent in each of the plan’s benefit obligations and enable the plans to meet their future obligations. The precise amount for which these obligations will be settled depends on future events, including the life expectancy of the plan participants and salary inflation. The obligations are estimated using actuarial assumptions based on the current economic environment.

Each pension plan seeks to achieve total returns sufficient to meet expected future obligations when considered in conjunction with expected future contributions and prudent levels of investment risk and diversification. Each plan’s targeted asset allocation is generally determined through a plan-specific asset-liability modeling study. These comprehensive studies provide an evaluation of the projected status of asset and benefit obligation measures for each plan under a range of both positive and negative factors. The studies include a number of different asset mixes, spanning a range of diversification and potential equity exposures.

In evaluating the strategic asset allocation choices, an emphasis is placed on the long-term characteristics of each individual asset class, such as expected return, volatility of returns and correlations with other asset classes within the portfolios. Consideration is also given to the proper long-term level of risk for each plan, the impact of the volatility and magnitude of plan contributions and costs, and the impact that certain actuarial techniques may have on the plan’s recognition of investment experience.

We monitor investment performance and portfolio characteristics on a quarterly basis to ensure that managers are meeting expectations with respect to their investment approach. There are also various restrictions and controls placed on managers, including prohibition from investing in our stock.

Fair Value of Plan Assets

The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value:

•Level 1: refers to fair values determined based on quoted market prices in active markets for identical assets;

•Level 2: refers to fair values estimated using observable market-based inputs or unobservable inputs that are corroborated by market data; and

•Level 3: includes fair values estimated using unobservable inputs that are not corroborated by market data.

The fair values of our U.S. plan assets by asset category at December 31, 2023 and 2022 are as follows:

	December 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset category:
Cash	$	29	$	—	$	—	$	29	$	15	$	—	$	—	$	15
Short-term securities		—		85		—		85		—		89		—		89
Pooled/commingled funds		—		—		—		2,146		—		—		—		1,945
Private equity		—		—		—		665		—		—		—		612
Hedge funds		—		—		—		878		—		—		—		1,160
Total assets	$	29	$	85	$	—	$	3,803	$	15	$	89	$	—	$	3,821

The fair values of our U.K. plan assets by asset category at December 31, 2023 and 2022 are as follows:

	December 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset category:
Cash	$	204	$	—	$	—	$	204	$	125	$	—	$	—	$	125
Government bonds		1,305		—		—		1,305		1,267		—		—		1,267
Corporate bonds		—		282		—		282		—		335		—		335
Other fixed income		—		377		—		377		—		189		—		189
Pooled/commingled funds		—		—		—		1,065		—		—		—		1,255
Private equity		—		—		—		14		—		—		—		20
Derivatives		—		254		—		254		—		229		—		229
Real estate		—		—		—		112		—		—		—		121
Insurance contracts		—		—		45		45		—		—		40		40
Total assets	$	1,509	$	913	$	45	$	3,658	$	1,392	$	753	$	40	$	3,581
Liability category:
Repurchase agreements		—		496		—		496		—		484		—		484
Derivatives		—		93		—		93		—		98		—		98
Net assets	$	1,509	$	324	$	45	$	3,069	$	1,392	$	171	$	40	$	2,999

The fair values of our Other plan assets by asset category at December 31, 2023 and 2022 are as follows:

	December 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Asset category:
Cash	$	2	$	—	$	—	$	2	$	3	$	—	$	—	$	3
Pooled/commingled funds		—		—		—		583		—		—		—		501
Hedge funds		—		—		—		36		—		—		—		32
Insurance contracts		—		—		5		5		—		—		5		5
Investment in multiple-    employer pension plan		—		—		47		47		—		—		39		39
Total assets	$	2	$	—	$	52	$	673	$	3	$	—	$	44	$	580

We evaluate the need to transfer between levels based upon the nature of the financial instrument and size of the transfer relative to the total net assets of the plans. There were no significant transfers between Levels 1, 2 or 3 in the fiscal years ended December 31, 2023 and 2022.

In accordance with ASC Subtopic 820-10, Fair Value Measurement and Disclosures, certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables are intended to permit reconciliation of the fair value hierarchy to the total fair value of plan assets.

Following is a description of the valuation methodologies used for investments at fair value:

Short-term securities: Valued at the net value of shares held by the Company at year end as reported by the sponsor of the funds.

Government bonds: Valued at the closing price reported in the active market in which the bond is traded.

Corporate bonds: Valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing values on yields currently available on comparable securities of issuers with similar credit ratings.

Other fixed income: Foreign and municipal bonds are valued using pricing models maximizing the use of observable inputs for similar securities.

Pooled / commingled funds: Valued at the net value of shares held by the Company at year end as reported by the manager of the funds. These funds are not exchange-traded and are not reported by level in the tables above.

Derivative investments: Valued at the closing level of the relevant index or security and interest accrual through the valuation date.

Private equity funds, real estate funds, hedge funds: The fair values for these investments are estimated based on the net asset values derived from the latest audited financial statements or most recent capital account statements provided by the private equity fund’s investment manager or third-party administrator.

Insurance contracts: The fair values are determined using model-based techniques that include option-pricing models, discounted cash flow models and similar techniques.

Investment in multiple-employer pension plan: The Company sponsors a pension plan for its Swiss employees in which assets of the plan are invested in a collective fund with multiple employers through a Swiss insurance company. WTW does not have rights to, nor does it have investment authority over, the individual assets of the plan. The fair value of the plan assets is estimated based on information provided by the collective fund.

Repurchase agreements: Valued at the repurchase obligation which includes an interest rate linked to the underlying fixed interest government bond portfolio. These agreements are short-term in nature (less than one year) and were entered into for the purpose of purchasing additional government bonds.

The following table reconciles the net plan investments to the total fair value of the plan assets:

	December 31,
	2023		2022
Net assets held in investments	$	7,545	$	7,400
Net receivable for investments purchased		—		2
Fair value of plan assets	$	7,545	$	7,402

Level 3 investments

As a result of the inherent limitations related to the valuations of the Level 3 investments, due to the unobservable inputs of the underlying funds, the estimated fair values may differ significantly from the values that would have been used had a market for those investments existed.

The following table sets forth a summary of changes in the fair value of the plans’ Level 3 assets for the fiscal year ended December 31, 2023:

	Level 3 Roll Forward
Beginning balance at December 31, 2022	$	84
Purchases		2
Unrealized gain		4
Foreign exchange		7
Ending balance at December 31, 2023	$	97

Contributions and Benefit Payments

Funding is based on actuarially-determined contributions and is limited to amounts that are currently deductible for tax purposes. Since funding calculations are based on different measurements than those used for accounting purposes, pension contributions are not equal to net periodic pension costs.

The following table sets forth our projected pension contributions to our qualified plans for fiscal year 2023, as well as the pension contributions to our qualified plans in fiscal years 2023 and 2022:

	2024 (Projected)		2023 (Actual)		2022 (Actual)
U.S.	$	—	$	—	$	1
U.K.	$	2	$	12	$	32
Other	$	9	$	24	$	25

Expected benefit payments from our defined benefit pension plans to current plan participants, including the effects of their expected future service, as appropriate, are as follows:

	Benefit Payments
Fiscal Year	U.S.		U.K.		Other		Total
2024	$	287	$	119	$	36	$	442
2025		287		121		32		440
2026		293		130		33		456
2027		290		135		34		459
2028		289		137		36		462
Years 2029 – 2033		1,380		744		210		2,334
	$	2,826	$	1,386	$	381	$	4,593

Defined Contribution Plans

We have defined contribution plans covering eligible employees in many countries. The most significant plans are in the U.S. and U.K. and are described here.

We have a U.S. defined contribution plan covering all eligible employees of WTW. The plan allowed participants to make pre-tax and Roth after-tax contributions, and the Company provided a 100% match on the first 1% of employee contributions and a 50% match on the next 5% of employee contributions. Effective January 2024, the Company provides to non-Benefits Delivery & Administration (‘BDA’) participants a non-elective company contribution of 3.5% of eligible earnings, regardless of the contributions they make to the plan. Participants employed in BDA business entities will continue under the prior formula. Employees vest in the Company match upon two years of service. All investment assets of the plan are held in a trust account administered by independent trustees.

Our U.K. pension plans provide for a defined contribution component as part of a master trust. We make contributions to the plan, a portion of which represents matching contributions made by the participants up to a maximum rate.

We had defined contribution plan expense for the years ended December 31, 2023, 2022 and 2021 amounting to $158 million, $148 million and $155 million, respectively.