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Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Schedule of Pension and Other Employee Benefit Costs
Pension and other employee benefit costs per the consolidated statements of earnings consisted of the following for December 31, 2019, 2018 and 2017:

(in millions)
2019
 
2018
 
2017
Net pension costs (income)
$
(18
)
 
$
(51
)
 
$
(20
)
Net postemployment costs
100

 
80

 
85

Net postretirement costs
7

 
12

 
13

Total pension and other employee benefit costs
$
89

 
$
41

 
$
78
Change in Benefit Obligations The projected benefit obligations, plan assets and funded status of PMI’s pension plans, and the accumulated benefit obligation and net amount accrued for PMI's postretirement health care plans, at December 31, 2019 and 2018, were as follows:
 
Pension(1)
 
Postretirement
(in millions)
2019
 
2018
 
2019
 
2018
Benefit obligation at January 1
$
9,152

 
$
9,028

 
$
209

 
$
248

Service cost
214

 
210

 
2

 
4

Interest cost
118

 
109

 
7

 
9

Net benefits paid
(250
)
 
(218
)
 
(8
)
 
(8
)
Settlement and curtailment
50

 
1

 


 
—

Actuarial losses (gains)
1,430

 
210

 
27

 
(34
)
Currency
29

 
(196
)
 
—

 
(9
)
Deconsolidation of RBH
(166
)
 
—

 
(42
)
 
—

Other
35

 
8

 
(5
)
 
(1
)
Benefit obligation at December 31,
10,612

 
9,152

 
190

 
209

Fair value of plan assets at January 1,
6,888

 
7,598

 
 
 
 
Actual return on plan assets
1,211

 
(447
)
 
 
 
 
Employer contributions
200

 
110

 
 
 
 
Standard employee contributions
44

 
24

 
 
 
 
Net benefits paid
(250
)
 
(218
)
 
 
 
 
Settlement and curtailment
—

 
—

 
 
 
 
Currency
7

 
(179
)
 
 
 
 
Deconsolidation of RBH
(172
)
 
—

 
 
 
 
Fair value of plan assets at December 31,
7,928

 
6,888

 
 
 
 
Net pension and postretirement liability recognized at December 31,
$
(2,684
)
 
$
(2,264
)
 
$
(190
)
 
$
(209
)


(1) Primarily non-U.S. based defined benefit retirement plans.
Pension and Postretirement Liabilities Recognized in Consolidated Balance Sheets
At December 31, 2019 and 2018, the amounts recognized on PMI's consolidated balance sheets for the pension and postretirement plans were as follows:
 
Pension
 
Postretirement
(in millions)
2019
 
2018
 
2019
 
2018
Other assets
$
43

 
$
37

 
 
 
 
Accrued liabilities — employment costs
(23
)
 
(20
)
 
$
(8
)
 
$
(10
)
Long-term employment costs
(2,704
)
 
(2,281
)
 
(182
)
 
(199
)
 
$
(2,684
)
 
$
(2,264
)
 
$
(190
)
 
$
(209
)
Schedule of Assumptions Used
The following weighted-average assumptions were used to determine PMI’s net pension and postretirement health care costs:
 
Pension
 
Postretirement
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Discount rate - service cost
2.14
%
 
1.92
%
 
1.68
%
 
3.97
%
 
3.79
%
 
3.68
%
Discount rate - interest cost
1.35

 
1.25

 
1.27

 
3.97

 
3.79

 
3.68

Expected rate of return on plan assets
4.70

 
4.76

 
4.80

 
 
 
 
 
 
Rate of compensation increase
1.86

 
1.65

 
1.68

 
 
 
 
 
 
Interest crediting rate
3.40

 
3.40

 
3.40

 
 
 
 
 
 
Health care cost trend rate
 
 
 
 
 
 
6.17

 
6.17

 
7.15


The following weighted-average assumptions were used to determine PMI’s pension and postretirement benefit obligations at December 31:
 
Pension
 
Postretirement
 
2019
 
2018
 
2019
 
2018
Discount rate
0.83
%
 
1.61
%
 
3.28
%
 
3.97
%
Rate of compensation increase
1.82

 
1.86

 
 
 
 
Interest crediting rate
3.20

 
3.40

 
 
 
 
Health care cost trend rate assumed for next year
 
 
 
 
6.21

 
6.17

Ultimate trend rate
 
 
 
 
5.09

 
4.59

Year that rate reaches the ultimate trend rate
 
 
 
 
2023
 
2040
Components of Net Periodic Benefit Cost
Net periodic pension and postretirement health care costs consisted of the following for the years ended December 31, 2019, 2018 and 2017:
 
Pension
 
Postretirement
(in millions)
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Service cost
$
214

 
$
210

 
$
208

 
$
2

 
$
4

 
$
4

Interest cost
118

 
109

 
108

 
7

 
9

 
8

Expected return on plan assets
(328
)
 
(349
)
 
(326
)
 
—

 
—

 
—

Amortization:
 
 
 
 
 
 
 
 
 
 
 
Net losses
189

 
172

 
186

 
—

 
4

 
5

Prior service cost
(1
)
 
2

 
6

 
—

 
(1
)
 
—

Settlement and curtailment
4

 
15

 
6

 
—

 
—

 
—

Net periodic pension and postretirement costs
$
196

 
$
159

 
$
188

 
$
9

 
$
16

 
$
17
Fair Value of Pension Plan Assets
The fair value of PMI’s pension plan assets at December 31, 2019 and 2018, by asset category was as follows:
Asset Category
(in millions)
At December 31, 2019
 
Quoted Prices 
In Active 
Markets for 
Identical
Assets/Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents
$
276

 
$
276

 


 


Equity securities:
 
 
 
 
 
 
 
U.S. securities
170

 
170

 


 


International securities
563

 
563

 


 


Investment funds(a)
6,125

 
4,625

 
$
1,500

 


International government bonds
197

 
137

 
60

 


Corporate bonds
282

 
282

 


 


Other
6

 
6

 


 


Total assets in the fair value hierarchy
$
7,619

 
$
6,059

 
$
1,560

 
$
—

Investment funds measured at net asset value(b)
309

 
 
 
 
 
 
Total assets
$
7,928

 
 
 
 
 
 

(a) Investment funds whose objective seeks to replicate the returns and characteristics of specified market indices (primarily MSCI — Europe, Switzerland, North America, Asia Pacific, Japan; Russell 3000; S&P 500 for equities, and Citigroup EMU and JP Morgan EMBI for bonds), primarily consist of mutual funds, common trust funds and commingled funds. Of these funds, 63% are invested in U.S. and international equities; 16% are invested in U.S. and international government bonds; 12% are invested in real estate and other money markets, and 9% are invested in corporate bonds.

(b) In accordance with FASB ASC Subtopic 820-10, certain investments 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 this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

Asset Category
(in millions)
At December 31, 2018
 
Quoted Prices 
In Active 
Markets for 
Identical
Assets/Liabilities
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents
$
84

 
$
84

 


 


Equity securities:
 
 
 
 
 
 
 
U.S. securities
139

 
139

 


 


International securities
442

 
442

 


 


Investment funds(a)
5,508

 
3,595

 
$
1,913

 


International government bonds
176

 
120

 
56

 


Corporate bonds
232

 
232

 


 


Other
19

 
19

 


 


Total assets in the fair value hierarchy
$
6,600

 
$
4,631

 
$
1,969

 
$
—

Investment funds measured at net asset value(b)
288

 
 
 
 
 
 
Total assets
$
6,888

 
 
 
 
 
 

(a) Investment funds whose objective seeks to replicate the returns and characteristics of specified market indices (primarily MSCI — Europe, Switzerland, North America, Asia Pacific, Japan; Russell 3000; S&P 500 for equities, and Citigroup EMU and Barclays Capital U.S. for bonds), primarily consist of mutual funds, common trust funds and commingled funds. Of these funds, 57% were invested in U.S. and international equities; 20% were invested in U.S. and international government bonds; 12% were invested in real estate and other money markets, and 11% were invested in corporate bonds.

(b) In accordance with FASB ASC Subtopic 820-10, certain investments 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 this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
Estimated Future Benefit Payments
The estimated future benefit payments from PMI pension plans at December 31, 2019, are as follows:
(in millions)
 
2020
$
317

2021
340

2022
341

2023
351

2024
361

2025 - 2029
2,008
Amounts Recorded in Accumulated Other Comprehensive Losses
The amounts recorded in accumulated other comprehensive losses at December 31, 2019, consisted of the following:
(in millions)
Pension
 
Post-
retirement
 
Post-
employment
 
Total
Net losses
$
(3,718
)
 
$
(63
)
 
$
(775
)
 
$
(4,556
)
Prior service cost
3

 
2

 
—

 
5

Net transition obligation
(4
)
 
—

 
—

 
(4
)
Deferred income taxes
520

 
24

 
182

 
726

Losses to be amortized
$
(3,199
)
 
$
(37
)
 
$
(593
)
 
$
(3,829
)

The amounts recorded in accumulated other comprehensive losses at December 31, 2018, consisted of the following:
(in millions)
Pension
 
Post-
retirement
 
Post-
employment
 
Total
Net losses
$
(3,438
)
 
$
(41
)
 
$
(702
)
 
$
(4,181
)
Prior service cost
(27
)
 
3

 
—

 
(24
)
Net transition obligation
(4
)
 
—

 
—

 
(4
)
Deferred income taxes
379

 
20

 
164

 
563

Losses to be amortized
$
(3,090
)
 
$
(18
)
 
$
(538
)
 
$
(3,646
)

The amounts recorded in accumulated other comprehensive losses at December 31, 2017, consisted of the following:
(in millions)
Pension
 
Post-
retirement
 
Post-
employment
 
Total
Net losses
$
(2,624
)
 
$
(80
)
 
$
(617
)
 
$
(3,321
)
Prior service cost
(35
)
 
4

 
—

 
(31
)
Net transition obligation
(5
)
 
—

 
—

 
(5
)
Deferred income taxes
327

 
28

 
186

 
541

Losses to be amortized
$
(2,337
)
 
$
(48
)
 
$
(431
)
 
$
(2,816
)
Movements in Other Comprehensive Earnings (Losses)
The movements in other comprehensive earnings (losses) during the year ended December 31, 2019, were as follows:
(in millions)
Pension
 
Post-
retirement
 
Post-
employment
 
Total
Amounts transferred to earnings as components of net periodic benefit cost:
 
 
 
 
 
 
 
Amortization:
 
 
 
 
 
 
 
Net losses
$
198

 
$
3

 
$
77

 
$
278

Prior service cost
32

 
(1
)
 
—

 
31

Other income/expense:
 
 
 
 
 
 
 
Net losses
3

 
—

 
—

 
3

Deferred income taxes
(51
)
 
(1
)
 
(17
)
 
(69
)
 
182

 
1

 
60

 
243

Other movements during the year:
 
 
 
 
 
 
 
Net losses
(521
)
 
(27
)
 
(150
)
 
(698
)
Prior service cost
(2
)
 
—

 
—

 
(2
)
Deconsolidation of RBH (net of deferred income taxes)
26

 
1

 
 
 
27

Deferred income taxes
206

 
6

 
35

 
247

 
(291
)
 
(20
)
 
(115
)
 
(426
)
Total movements in other comprehensive earnings (losses)
$
(109
)
 
$
(19
)
 
$
(55
)
 
$
(183
)

The movements in other comprehensive earnings (losses) during the year ended December 31, 2018, were as follows:
(in millions)
Pension
 
Post-
retirement
 
Post-
employment
 
Total
Amounts transferred to earnings as components of net periodic benefit cost:
 
 
 
 
 
 
 
Amortization:
 
 
 
 
 
 
 
Net losses
$
180

 
$
5

 
$
62

 
$
247

Prior service cost
—

 
(1
)
 
—

 
(1
)
Net transition obligation
1

 
—

 
—

 
1

Other income/expense:
 
 
 
 
 
 
 
Net losses
14

 
—

 
—

 
14

Deferred income taxes
(28
)
 
(1
)
 
(14
)
 
(43
)
 
167

 
3

 
48

 
218

Other movements during the year:
 
 
 
 
 
 
 
Net losses
(1,008
)
 
34

 
(147
)
 
(1,121
)
Prior service cost
8

 
—

 
—

 
8

Deferred income taxes
80

 
(7
)
 
(8
)
 
65

 
(920
)
 
27

 
(155
)
 
(1,048
)
Total movements in other comprehensive earnings (losses)
$
(753
)
 
$
30

 
$
(107
)
 
$
(830
)

The movements in other comprehensive earnings (losses) during the year ended December 31, 2017, were as follows:
(in millions)
Pension
 
Post-
retirement
 
Post-
employment
 
Total
Amounts transferred to earnings as components of net periodic benefit cost:
 
 
 
 
 
 
 
Amortization:
 
 
 
 
 
 
 
Net losses
$
175

 
$
5

 
$
68

 
$
248

Prior service cost
5

 
—

 
—

 
5

Other income/expense:
 
 
 
 
 
 
 
Net losses
6

 
—

 
—

 
6

Deferred income taxes
(10
)
 
(1
)
 
(20
)
 
(31
)
 
176

 
4

 
48

 
228

Other movements during the year:
 
 
 
 
 
 
 
Net losses
509

 
(12
)
 
28

 
525

Prior service cost
13

 
—

 
—

 
13

Deferred income taxes
(13
)
 
5

 
(9
)
 
(17
)
 
509

 
(7
)
 
19

 
521

Total movements in other comprehensive earnings (losses)
$
685

 
$
(3
)
 
$
67

 
$
749