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Defined Benefit Pension Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Defined Benefit Pension Plans
Note 26. Defined Benefit Pension Plans
We sponsor several funded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of our U.S. employees are provided through a non-contributory, qualified defined benefit plan. We also sponsor defined benefit pension plans in Switzerland and Ireland. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate.
The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with our pension plans.
Pension Benefits
U.S.
Plans		 U.S.
Plans		 Non-U.S.
Plans		 Non-U.S.
Plans
20242023 20242023
(Dollars in millions)
Change in benefit obligation:
Benefit obligation at beginning of the year$171 $168 $186 $167 
Service cost— — 7 6 
Interest cost8 8 4 5 
Actuarial (gains) losses(10)5 (1)7 
Benefits paid and employee contributions(10)(10)— 2 
Settlements and curtailments(1)
— — (12)(16)
Foreign currency translation— — (12)11 
Other— — 8 4 
Benefit obligation at end of the year159 171 180 186 
Change in plan assets:    
Fair value of plan assets at beginning of the year173 169 175 152 
Actual return on plan assets1 14 16 16 
Employer contributions— — 5 7 
Benefits paid and employee contributions(10)(10)1 2 
Settlements and curtailments(1)
— — (11)(16)
Foreign currency translation— — (11)10 
Other— — 8 4 
Fair value of plan assets at end of year164 173 183 175 
Funded status of plans$5 $2 $3 $(11)
Amounts recognized in Consolidated Balance Sheet consist of:    
Non-current assets(2)
5 2 18 9 
Non-current liabilities(3)
— — (15)(20)
Net amount recognized$5 $2 $3 $(11)
(1)In Switzerland, the total lump sum benefit payments of $11 million and $16 million were greater than the service cost and interest cost for the years ended December 31, 2024 and 2023, respectively, therefore settlement accounting was applied. Following the settlement accounting, part of the previously unrecognized gain amounting to approximately $1 million and $1 million, respectively, was recognized as a gain on pension settlement.
(2)Included in Other assets in the Consolidated Balance Sheets.
(3)Included in Other liabilities in the Consolidated Balance Sheets.
Amounts recognized in AOCI associated with our pension and other postretirement benefit plans as of December 31, 2024 and 2023 are as follow:
Pension Benefits
U.S.
Plans		 U.S.
Plans		 Non-U.S.
Plans		 Non-U.S.
Plans
20242023 20242023
(Dollars in millions)
Prior service (credit) cost$— $— $(7)$(7)
Net actuarial loss (gain)9 11 (14)(12)
Net amount recognized$9 $11 $(21)$(19)
The components of net periodic benefit (income) cost for our pension and other postretirement benefit plans are as follow:
 Pension Benefits
 U.S. Plans Non-U.S. Plans
Net Periodic Benefit Cost202420232022202420232022
(Dollars in millions)
Service cost$— $— $1 $7 $6 $7 
Interest cost8 8 5 4 5 2 
Expected return on plan assets(8)(8)(9)(7)(9)(6)
Amortization of prior service (credit) cost— — — (1)(1)(1)
Recognition of actuarial (gains) losses— — — (8)(1)(27)
Settlements and curtailments— — — (1)(1)(1)
Net periodic benefit (income) cost$— $— $(3)$(6)$(1)$(26)
The components of net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for our pension and other postretirement benefit plans include the following components:
Other Changes in Plan Assets and Benefits Obligations Recognized in
Other Comprehensive (Income) Loss		U.S. PlansNon-U.S. Plans
202420232022202420232022
(Dollars in millions)
Actuarial (gains) losses$(3)$(1)$14 $(11)$— $(33)
Prior service (credit) cost— — — (1)— — 
Recognition of prior service credit (cost)— — — 1 1 1 
Recognition of actuarial gains (losses)— — — 9 2 30 
Foreign currency translation— — — 1 (2)— 
Total recognized in other comprehensive (income) loss$(3)$(1)$14 $(1)$1 $(2)
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss$(3)$(1)$11 $(7)$— $(28)
The main actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for the benefit plans are presented in the following table as weighted averages.
Pension Benefits
U.S. Plans Non-U.S. Plans
202420232022202420232022
Actuarial assumptions used to determine benefit obligations as of December 31:
Discount rate5.68 %5.02 %5.21 %2.21 %2.36 %2.91 %
Expected annual rate of compensation increase3.00 %3.00 %4.98 %2.11 %2.38 %4.93 %
Interest credited to accounts (1)
— %— %— %2.65 %2.65 %3.00 %
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31:
Discount rate—benefit obligation5.02 %5.21 %2.95 %2.36 %2.91 %0.80 %
Discount rate—service cost5.05 %5.23 %3.00 %2.36 %2.91 %0.82 %
Discount rate—interest cost4.91 %5.09 %2.38 %2.35 %2.94 %0.73 %
Expected rate of return on plan assets4.86 %4.98 %3.97 %4.42 %4.94 %3.36 %
Expected annual rate of compensation increase3.00 %3.00 %3.20 %2.38 %2.43 %1.99 %
(1)Only applicable to the defined benefit pension plan in Switzerland.
The discount rates for the pension plans reflect the current rates at which the associated liabilities could be settled at the measurement date of December 31, 2024. To determine the discount rates, we use a modeling process that involves matching the expected cash outflows of our benefit plans to a yield curve constructed from a portfolio of high quality, fixed-income debt instruments. We use the single weighted-average yield of this hypothetical portfolio as a discount rate benchmark.
For both our U.S. and non-U.S. defined benefit pension plans, we estimate the service and interest cost components of net period benefit (income) cost by utilizing a full yield curve approach in the estimation of these cost components by applying the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows. This approach provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates.
For non-U.S. benefit plans, actuarial assumptions reflect economic and market factors relevant to each country.
The following amounts relate to our pension plans with accumulated benefit obligations exceeding the fair value of plan assets.
December 31,
U.S. Plans Non-U.S. Plans
2024202320242023
(Dollars in millions)
Projected benefit obligation$— $— $85 $87 
Accumulated benefit obligation— — 84 84 
Fair value of plan assets— — 78 76 
Our U.S. pension asset investment strategy focuses on maintaining a diversified portfolio using various asset classes in order to achieve market exposure and diversification on a risk adjusted basis. Our target allocations are as follows: 91% liability-hedging fixed income investments, 8% global equity securities, and 1% real estate investments. Fixed income investments include corporate and government issues with a target duration close to that of the plan liability. Global equity securities include mutual funds that invest in companies located both inside and outside the United States. The real estate fund invests in real estate investment trusts – companies that purchase office buildings, hotels and other real estate property. Our assets are reviewed on a daily basis to ensure that we are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.
Our non-U.S. pension assets are typically managed by decentralized fiduciary committees. Our non-U.S. investment policies are different for each country as local regulations, funding requirements, and financial and tax considerations are part of the funding and investment allocation process in each country.
The fair values of both our U.S. and non-U.S. pension plans assets by asset category are as follows:
U.S. Plans
December 31, 2024
Total Level 1 Level 2 Level 3
(Dollars in millions)
Cash and cash equivalents$3 $3 $— $— 
Equity funds12 — 12 — 
Government bond funds39 — 39 — 
Corporate bond funds93 — 93 — 
Liability driven investment fund13 — 13 — 
Real estate funds2 — 2 — 
Other2 — 2 — 
Total assets at fair value$164 $3 $161 $— 
U.S. Plans
December 31, 2023
TotalLevel 1Level 2Level 3
(Dollars in millions)
Cash and cash equivalents$3 $3 $— $— 
Equity funds7 — 7 — 
Government bond funds51 — 51 — 
Corporate bond funds103 — 103 — 
Real estate funds7 — 7 — 
Other2 — 2 — 
Total assets at fair value$173 $3 $170 $— 
Non-U.S. Plans
December 31, 2024
TotalLevel 1Level 2Level 3
(Dollars in millions)
Cash and cash equivalents$6 $6 $— $— 
Money market funds29 29 — — 
Equity funds49 — 49 — 
Government bond funds6 — 6 — 
Corporate bond funds13 — 13 — 
Real estate funds19 — 19 — 
Diversified mutual funds49 — 49 — 
Other12 — 12 — 
Total assets at fair value$183 $35 $148 $— 
Non-U.S. Plans
December 31, 2023
TotalLevel 1Level 2Level 3
(Dollars in millions)
Cash and cash equivalents$7 $7 $— $— 
Money market funds28 28 — — 
Equity funds56 — 56 — 
Government bond funds20 — 20 — 
Real estate funds17 — 17 — 
Diversified mutual funds40 — 40 — 
Other7 — 7 — 
Total assets at fair value$175 $35 $140 $— 
Equity funds, corporate bond funds, government bond funds, real estate funds, swap funds and short-term investments are valued either by bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Other includes private equity and hedge funds. These investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner.
Our general funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. We were not required to make any contributions to our U.S. pension plan in 2024. In 2024, contributions of $5 million were made to our non-U.S. pension plans to satisfy regulatory funding requirements. In 2025, we expect to make contributions of cash and/or marketable securities of approximately $5 million to our non-U.S. pension plans to satisfy regulatory funding standards. Contributions for both our U.S. and non-U.S. pension plans do not reflect benefits paid directly from Company assets.
Benefit payments, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows:
U.S.
Plans		Non-U.S.
Plans
(Dollars in millions)
2025$12 $4 
202612 5 
202712 5 
202812 6 
202912 7 
2030-203461 44