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Pension
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Pension Pension
A.About Our Plans
The Company sponsors U.S. and non-U.S. defined benefit pension plans; future benefit accruals for the domestic plans are frozen.
Accounting policy. The Company measures the assets and liabilities of its domestic pension plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the "corridor" method to account for changes in the benefit obligation when actual results differ from those assumed, or when assumptions change. These changes are called net unrecognized actuarial gains (losses). Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in Accumulated other comprehensive loss. When the unrecognized gain (loss) exceeds 10% of the benefit obligation, that excess is amortized to expense over the expected remaining lives of plan participants. The net plan expense is reported in Interest expense and other in the Consolidated Statements of Income.
For balance sheet purposes, we measure plan assets at fair value. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above. However, to measure pension benefit costs, we use a "market-related" asset valuation that differs from the actual fair value for domestic pension plan assets invested in non-fixed income investments. The "market-related" value recognizes the difference between actual and expected long-term returns in the portfolio over five years, a method that reduces the short-term impact of market fluctuations on pension costs. The market-related asset value was approximately $4.4 billion, compared with a fair value of approximately $4.8 billion at December 31, 2021.
B.Funded Status and Amounts Included in Accumulated Other Comprehensive Income
The following table summarizes the projected benefit obligations and assets related to our U.S. and non-U.S. pension plans as of and for the years ended December 31:
 Pension Benefits
(In millions)20212020
Change in benefit obligation
Benefit obligation, January 1$5,600 $5,314 
Service cost2 2 
Interest cost132 168 
Actuarial (gains) losses, net (1)
(189)416 
Benefits paid from plan assets(304)(285)
Benefits paid – other
(18)(15)
Benefit obligation, December 315,223 5,600 
Change in plan assets
Fair value of plan assets, January 14,623 4,441 
Actual return on plan assets522 449 
Benefits paid(304)(285)
Contributions5 18 
Fair value of plan assets, December 314,846 4,623 
Funded status$(377)$(977)
Liability in Consolidated Balance Sheets
Accrued expenses and other liabilities$(14)$(15)
Other non-current liabilities$(363)$(962)
(1) 2021 gain reflects an increase in the discount rate; 2020 loss reflects a decrease in the discount rate, partially offset by a favorable change in the mortality assumption.

We fund our qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006. The Company made immaterial contributions to the qualified pension plans in 2021. For 2022, contributions to the qualified pension plans are expected to be immaterial. Future years' contributions will ultimately be based on a wide range of factors including but not limited to asset returns, discount rates and funding targets. Non-qualified pension and other postretirement benefit plans are generally funded on a pay-as-you-go basis as there are no plan assets for these plans.
Benefit payments. The following benefit payments are expected to be paid in:
(In millions)Pension Benefits
2022$317 
2023$318 
2024$317 
2025$315 
2026$316 
2027-2031$1,532 

Amounts reflected in the pension liabilities shown above that have not yet been reported in net income and, therefore, have been included in Accumulated other comprehensive loss consisted of the following as of December 31:
 Pension Benefits
(In millions)20212020
Unrecognized net (losses)$(1,753)$(2,277)
Unrecognized prior service cost(5)(5)
Postretirement benefits liability adjustment$(1,758)$(2,282)
C.Cost of Our Plans
Net pension cost was as follows:
 Pension Benefits
(In millions)202120202019
Service cost$2 $2 $2 
Interest cost132 168 194 
Expected long-term return on plan assets(269)(260)(245)
Amortization of:
Prior actuarial losses, net78 78 59 
Litigation settlement – plan amendment— — 142 
Settlement loss4 — 10 
Net (benefit) cost$(53)$(12)$162 
The Cigna Pension Plan (the "Plan"), together with its Plan Sponsor, was a defendant in a class action lawsuit related to the Plan's conversion of certain employees from an annuity to a cash balance benefit in 1997. In the first quarter of 2019, the Plan implemented the court order resulting in an increase to the pension liability of $142 million. The Company reversed a litigation reserve for the expenses recognized for this matter in 2019 aggregating to the same amount resulting in no impact on net income.
D.Assumptions Used for Pension
 20212020
Discount rate:
Pension benefit obligation2.82%2.49%
Pension benefit cost2.49%3.30%
Expected long-term return on plan assets:
Pension benefit cost6.75%6.75%
Mortality table for pension obligationsWhite Collar mortality table with MP 2021 projection scaleWhite Collar mortality table with MP 2020 projection scale
The Company develops discount rates by applying actual annualized yields for high quality bonds by duration to the expected pension plan liability cash flows. The bond yields represent a diverse mix of actively traded high quality fixed-income securities that have an above average return at each duration as management believes this approach is representative of the yield achieved through plan asset investment strategy.
The expected long-term return on plan assets was developed considering historical long-term actual returns, expected long-term market conditions, plan asset mix and management's plan asset investment strategy.
E.Pension Plan Assets
As of December 31, 2021, pension assets included $4.5 billion invested in the separate accounts of Connecticut General Life Insurance Company, a subsidiary of the Company, as well as an additional $0.3 billion, primarily invested directly in funds offered by an unaffiliated insurance company.
The fair values of pension assets by category are as follows as of December 31, 2021 and 2020:
(In millions)20212020
Debt securities:
Federal government and agency$9 $9 
Corporate1,653 1,680 
Asset-backed108 53 
Fund investments731 380 
Total debt securities2,501 2,122 
Equity securities:
Domestic789 978 
International, including funds and pooled separate accounts (1)
358 471 
Total equity securities1,147 1,449 
Securities partnerships514 463 
Real estate funds, including pooled separate accounts (1)
334 219 
Commercial mortgage loans77 95 
Hedge funds— 1 
Guaranteed deposit account contract91 98 
Cash equivalents and other current assets, net182 176 
Total pension assets at fair value$4,846 $4,623 
(1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments.
The Company's current target investment allocation percentages (58% fixed income, 25% public equity securities and 17% in other investments, including private equity (securities partnerships) and real estate) are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of changes in market conditions. The Company will evaluate further allocation changes to equity securities, other investments and fixed income securities as funding levels change.
See Note 12 for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements. The Company classifies substantially all debt securities in Level 2 for pension plan assets. These assets are valued using recent trades of similar securities or are fund investments priced using their daily net asset value that is the exit price. A substantial portion of domestic equity securities within pension assets are classified as Level 1, while international equity funds within pension assets are predominantly classified in Level 2 using daily net asset value.
Securities partnerships, real estate and hedge funds are valued using net asset value as a practical expedient and are excluded from the fair value hierarchy. See Note 12 for additional disclosures related to these assets invested in the separate accounts of the Company's subsidiaries. Certain securities as described in Note 12, as well as commercial mortgage loans and guaranteed deposit account contracts, are classified in Level 3 because unobservable inputs used in their valuation are significant.
F.401(k) Plans
The Company sponsors a 401(k) plan in which the Company matches a portion of employees' pre-tax contributions. Participants in the plan may invest in various funds that invest in the Company's common stock, several diversified stock funds, a bond fund or a fixed-income fund.
The Company may elect to increase its matching contributions if the Company's annual performance meets certain targets. The Company's annual expense for these plans was as follows:
(In millions)202120202019
Expense$268 $243 $256