All of our employees are eligible to participate in our tax-qualified, defined contribution retirement plan that provides for periodic cash contributions by us based on annual cash compensation and employee deferrals.

Certain salaried employees participate in supplemental plans that restore benefits lost due to government limitations on qualified plans. As of December 31, 2019 and 2018, we recognized $37 million and $36 million in other long-term liabilities for these supplemental plans, respectively.

Participation in defined benefit pension plans sponsored by us is limited. During 2019, approximately 70 employees accrued benefits under these plans, all of whom were union employees. Effective December 31, 2015, the plans were amended such that participants other than union employees no longer earn benefits for service after December 31, 2015.

Pension costs for the defined benefit pension plans, determined by independent actuarial valuations, are funded by us through payments to trust funds, which are administered by independent trustees.

We provide postretirement medical and dental benefits for our eligible former employees and their dependents. Our former employees are required to make monthly contributions to the plan, but the benefits are primarily funded by us as claims are paid during the year.

The following tables show the amounts recognized in our balance sheets related to pension and postretirement benefit plans, as well as plans that we or our subsidiaries sponsor, and their funding status, obligations and plan asset fair values:



	As of December 31,
	2019			2018			2019			2018
	Pension Benefits						Postretirement Benefits
Amounts recognized in the balance sheet:	(in millions)
Accrued liabilities	$	—		$	—		$	(3	)	$	(2	)
Other long-term liabilities	(18		)	(14		)	(113		)	(82		)
	$	(18	)	$	(14	)	$	(116	)	$	(84	)

Amounts recognized in accumulated other comprehensive (loss) income:	$	(6	)	$	(10	)	$	(17	)	$	4



	As of December 31,
	2019			2018			2019			2018
	Pension Benefits						Postretirement Benefits
Changes in the benefit obligation:	(in millions)
Benefit obligation—beginning of year	$	56		$	65		$	84		$	93
Service cost—benefits earned during the period	1			1			4			4
Interest cost on projected benefit obligation	2			2			4			4
Actuarial loss (gain)	11			(2		)	19			(14		)
Cost of special termination benefits	—			—			6			—
Curtailment	—			—			2			—
Benefits paid	(25		)	(10		)	(3		)	(3		)
Benefit obligation—end of year	$	45		$	56		$	116		$	84

Changes in plan assets:
Fair value of plan assets—beginning of year	$	42		$	46		$	—		$	—
Actual gain (loss) on plan assets	7			(2		)	—			—
Employer contributions	3			8			3			3
Benefits paid	(25		)	(10		)	(3		)	(3		)
Fair value of plan assets—end of year	$	27		$	42		$	—		$	—
Unfunded status	$	(18	)	$	(14	)	$	(116	)	$	(84	)

The following table sets forth our defined benefit pension plans with accumulated benefit obligations in excess of plan assets for the years ended December 31:



	2019		2018
	(in millions)
Projected Benefit Obligation	$	45	$	56
Accumulated Benefit Obligation	$	41	$	53
Fair Value of Plan Assets	$	27	$	42



	For the years ended December 31,
	2019			2018			2017			2019		2018		2017
	Pension Benefits									Postretirement Benefits
Net periodic benefit costs:	(in millions)
Service cost—benefits earned during the period	$	1		$	1		$	1		$	4	$	4	$	3
Interest cost on projected benefit obligation	2			2			2			4		4		4
Expected return on plan assets	(2		)	(3		)	(3		)	—		—		—
Cost of special termination benefits	—			—			—			6		—		—
Amortization of net actuarial loss	1			2			2			—		—		—
Settlement costs	9			4			5			—		—		—
Net periodic benefit cost	$	11		$	6		$	7		$	14	$	8	$	7



	For the years ended December 31,
	2019			2018			2017			2019			2018		2017
Amounts recognized in other comprehensive income (loss):	Pension Benefits									Postretirement Benefits
Amounts recognized in other comprehensive income (loss):	(in millions)
Net actuarial (loss) gain	$	(6	)	$	(3	)	$	(4	)	$	(19	)	$	14	$	(12	)
Settlement costs	9			4			5			(2		)	—		—
Amortization of net actuarial gain/loss	1			2			2			—			—		—
Total recognized in other comprehensive income (loss)	$	4		$	3		$	3		$	(21	)	$	14	$	(12	)



	For the years ended December 31,
	2019		2018		2019		2018
Benefit Obligation Assumptions:	Pension Benefits				Postretirement Benefits
Discount rate	3.16	%	4.22	%	3.48	%	4.57	%
Rate of compensation increase	4.00	%	4.00	%	—		—
Net Periodic Benefit Cost Assumptions:
Discount rate	4.22	%	3.53	%	4.57	%	3.87	%
Assumed long-term rate of return on assets	6.50	%	6.50	%	—		—
Rate of compensation increase	4.00	%	4.00	%	—		—

For pension plans and postretirement benefit plans that we or our subsidiaries sponsor, we based the discount rate on the Aon AA Above Median yield curve in both 2019 and 2018. The weighted-average rate of increase in future compensation levels is consistent with our past and anticipated future compensation increases for employees participating in retirement plans that determine benefits using compensation. The assumed long-term rate of return on assets is estimated with regard to current market factors but within the context of historical returns for the asset mix that exists at year end.

Effective in 2019, we adopted the Society of Actuaries Pri-2012 mortality assumptions reflecting the MP-2019 Mortality Improvement Scale, which plan sponsors in the U.S. use in the actuarial valuations that determine a plan sponsor’s pension and postretirement obligations. In 2018, we utilized the Society of Actuaries Adjusted RP-2014 Mortality Table reflecting the MP-2018 Mortality Improvement Scale. At December 31, 2019, the changes in the mortality assumptions did not significantly change the pension benefit obligations or the postretirement benefit obligations.

The postretirement benefit obligation was determined by application of the terms of medical and dental benefits, including the effect of established maximums on covered costs, together with relevant actuarial assumptions and healthcare cost trend rates projected at an assumed U.S. Consumer Price Index (CPI) increase of 1.86% and 1.78% as of December 31, 2019 and 2018, respectively. Under the terms of our postretirement plans, participants other than certain union employees pay for all medical cost increases in excess of increases in the CPI. For those union employees, we projected that, as of December 31, 2019, health care cost trend rates would decrease 0.25% per year from 6.50% in 2020 until they reach 4.50% in 2028 and remain at 4.50% thereafter.

The actuarial assumptions used could change in the near term as a result of changes in expected future trends and other factors that, depending on the nature of the changes, could cause increases or decreases in the plan assets and liabilities.

We employ a total return investment approach that uses a diversified blend of equity and fixed-income investments to optimize the long-term return of plan assets at a prudent level of risk. Equity investments were diversified across U.S. and non-U.S. stocks, as well as differing styles and market capitalizations. Other asset classes, such as private equity and real estate, may have been used with the goals of enhancing long-term returns and improving portfolio diversification. In 2019 and 2018, the target allocation of plan assets was 65% equity securities and 35% debt securities. Investment performance was measured and monitored on an ongoing basis through quarterly investment portfolio and manager guideline compliance reviews, annual liability measurements and periodic studies.



	Fair Value Measurements at December 31, 2019
	Level 1		Level 2		Level 3		Total
Asset Class:	(in millions)
Cash equivalents	$	—	$	—	$	—	$	—
Commingled funds:
Fixed income	—		3		—		3
U.S. equity	—		4		—		4
International equity	—		2		—		2
Mutual funds:
Bond funds	5		—		—		5
Blend funds	2		—		—		2
Value funds	2		—		—		2
Growth funds	2		—		—		2
Guaranteed deposit account	—		—		7		7
Total pension plan assets	$	11	$	9	$	7	$	27



	Fair Value Measurements at December 31, 2018
	Level 1		Level 2		Level 3		Total
Asset Class:	(in millions)
Cash equivalents	$	1	$	—	$	—	$	1
Commingled funds:
Fixed income	—		9		—		9
U.S. equity	—		9		—		9
International equity	—		5		—		5
Mutual funds:
Bond funds	5		—		—		5
Blend funds	2		—		—		2
Value funds	2		—		—		2
Growth funds	2		—		—		2
Guaranteed deposit account	—		—		7		7
Total pension plan assets	$	12	$	23	$	7	$	42

In 2020, we expect to contribute $4 million to our postretirement benefit plans and at least our minimum funding requirement of $2 million to our defined benefit pension plans. Estimated future undiscounted benefit payments, which reflect expected future service, as appropriate, are as follows:



	Pension Benefits		Postretirement Benefits
For the years ended December 31,	(in millions)
2020	$	10	$	4
2021	$	4	$	5
2022	$	2	$	5
2023	$	3	$	5
2024	$	2	$	5
2025 - 2029	$	11	$	27