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Pension and Other Postretirement Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Changes in benefit obligations and plan assets and funded status amounts The following table presents the changes in benefit obligations, plan assets, the net funded status, and the pretax pension and OPEB amounts recorded in AOCI on the Consolidated balance sheets for the Firm’s defined benefit pension and OPEB plans, and the weighted-average actuarial annualized assumptions for the projected and accumulated postretirement benefit obligations.
As of or for the year ended December 31,
Defined benefit
pension plans
OPEB plans(h)
(in millions)
2018
 
2017
 
2018
 
2017
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation, beginning of year
$
(16,700
)
 
$
(15,594
)
 
$
(684
)
 
$
(708
)
Benefits earned during the year
(354
)
 
(330
)
 
—

 
—

Interest cost on benefit obligations
(556
)
 
(598
)
 
(24
)
 
(28
)
Plan amendments
(29
)
 
—

 
—

 
—

Plan curtailment
123

 
—

 
—

 
—

Employee contributions
(7
)
 
(7
)
 
(15
)
 
(16
)
Net gain/(loss)
938

(g) 
(721
)
(g) 
40

 
(4
)
Benefits paid
873

 
841

 
69

 
76

Plan settlements
15

 
30

 
—

 
—

Expected Medicare Part D subsidy receipts
NA

 
NA

 
—

 
(1
)
Foreign exchange impact and other
185

 
(321
)
 
2

 
(3
)
Benefit obligation, end of year(a)
$
(15,512
)
 
$
(16,700
)
 
$
(612
)
 
$
(684
)
Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets, beginning of year
$
19,603

 
$
17,703

 
$
2,757

 
$
1,956

Actual return on plan assets
(548
)
 
2,356

 
(28
)
 
233

Firm contributions
75

 
78

 
2

 
602

Employee contributions
7

 
7

 
15

 
—

Benefits paid
(873
)
 
(841
)
 
(113
)
 
(34
)
Plan settlements
(15
)
 
(30
)
 
—

 
—

Foreign exchange impact and other
(197
)
 
330

 
—

 
—

Fair value of plan assets, end of year (a)(b)(c)
$
18,052

 
$
19,603

 
$
2,633

 
$
2,757

Net funded status (d)(e)
$
2,540


$
2,903

 
$
2,021

 
$
2,073

Accumulated benefit obligation, end of year
$
(15,494
)
 
$
(16,530
)
 
NA

 
NA

Pretax pension and OPEB amounts recorded in AOCI
Net gain/(loss)
$
(3,134
)

$
(2,800
)
 
$
184


$
271

Prior service credit/(cost)
(23
)

6

 
—


—

Accumulated other comprehensive income/(loss), pretax, end of year
$
(3,157
)

$
(2,794
)
 
$
184


$
271

Weighted-average actuarial assumptions used to determine benefit obligations
Discount Rate (f)
0.60 - 4.30 %

 
0.60 - 3.70 %

 
4.20
%
 
3.70
%
Rate of compensation increase (f)
2.25 – 3.00

 
2.25 – 3.00

 
NA

 
NA
Interest crediting rate(f)
1.81 - 4.90%

 
1.81 - 4.90%

 
NA

 
NA
Health care cost trend rate:
Assumed for next year
NA

 
NA

 
5.00

 
5.00

Ultimate
NA

 
NA

 
5.00

 
5.00

Year when rate will reach ultimate
NA

 
NA

 
2019
 
2018

(a)
At December 31, 2018 and 2017, included non-U.S. benefit obligations of $(3.3) billion and $(3.8) billion, and plan assets of $3.5 billion and $3.9 billion, respectively, predominantly in the U.K.
(b)
At both December 31, 2018 and 2017, approximately $302 million of U.S. defined benefit pension plan assets included participation rights under participating annuity contracts.
(c)
At December 31, 2018 and 2017, defined benefit pension plan amounts that were not measured at fair value included $340 million and $377 million, respectively, of accrued receivables, and $503 million and $587 million, respectively, of accrued liabilities, for U.S. plans.
(d)
Represents plans with an aggregate overfunded balance of $5.1 billion and $5.6 billion at December 31, 2018 and 2017, respectively, and plans with an aggregate underfunded balance of $547 million and $612 million at December 31, 2018 and 2017, respectively.
(e)
For pension plans with a projected benefit obligation exceeding plan assets, the projected benefit obligation and fair value of plan assets was $1.3 billion and $762 million at December 31, 2018, respectively and $1.4 billion and $811 million at December 31, 2017, respectively. For pension plans with an accumulated benefit obligation exceeding plan assets, the accumulated benefit obligation and fair value of plan assets was $1.3 billion and $762 million at December 31, 2018, respectively, and $1.4 billion and $811 million at December 31, 2017, respectively. For OPEB plans with a projected benefit obligation exceeding plan assets, the projected benefit obligation was $26 million and $32 million at December 31, 2018 and December 31, 2017, respectively, they had no plan assets.
(f)
For the U.S. defined benefit pension plans, the discount rate assumption is 4.30% and 3.70% for 2018 and 2017, respectively, and the rate of compensation increase and the interest crediting rate are 2.30% and 4.90%, respectively, for both 2018 and 2017.
(g)
At December 31, 2018 and 2017, the gain/(loss) was primarily attributable to the change in the discount rate.
(h)
Includes an unfunded postretirement benefit obligation of $26 million and $32 million at December 31, 2018 and 2017, respectively, for the U.K. plan.
Components of net periodic benefit costs reported in the Consolidated Statements of Income and other comprehensive income The following table presents the components of net periodic benefit costs reported in the Consolidated statements of income for the Firm’s U.S. and non-U.S. defined benefit pension, defined contribution and OPEB plans, and in other comprehensive income for the defined benefit pension and OPEB plans, and the weighted-average annualized actuarial assumptions for the net periodic benefit cost.
 
Pension plans
 
OPEB plans
Year ended December 31, (in millions)
2018

2017

2016

 
2018

2017

2016

Components of net periodic benefit cost
 
 
 
 
 
 
 
Benefits earned during the year
$
354

$
330

$
332

 
$
—

$
—

$
—

Interest cost on benefit obligations
556

598

629

 
24

28

31

Expected return on plan assets
(981
)
(968
)
(1,030
)
 
(103
)
(97
)
(105
)
Amortization:
 
 
 
 
 
 
 
Net (gain)/loss
103

250

257

 
—

—

—

Prior service cost/(credit)
(23
)
(36
)
(36
)
 
—

—

—

Curtailment (gain)/loss
21

—

—

 
—

—

—

Settlement (gain)/loss
2

2

4

 
—

—

—

Net periodic defined benefit cost(a)
$
32

$
176

$
156

 
$
(79
)
$
(69
)
$
(74
)
Other defined benefit pension plans(b)
20

24

25

 
NA

NA

NA

Total defined benefit plans
$
52

$
200

$
181

 
$
(79
)
$
(69
)
$
(74
)
Total defined contribution plans
872

814

789

 
NA

NA

NA

Total pension and OPEB cost included in noninterest expense
$
924

$
1,014

$
970

 
$
(79
)
$
(69
)
$
(74
)
Changes in plan assets and benefit obligations recognized in other comprehensive income
 
 
 
 
Prior service (credit)/cost arising during the year
29

—

—

 
—

—

—

Net (gain)/loss arising during the year
467

(669
)
395

 
91

(133
)
(29
)
Amortization of net loss
(103
)
(250
)
(257
)
 
—

—

—

Amortization of prior service (cost)/credit
23

36

36

 
—

—

—

Curtailment gain/(loss)
(21
)
—

—

 
—

—

—

Settlement gain/(loss)
(2
)
(2
)
(4
)
 
—

—

—

Foreign exchange impact and other
(30
)
54

(77
)
 
(4
)
—

—

Total recognized in other comprehensive income
$
363

$
(831
)
$
93

 
$
87

$
(133
)
$
(29
)
Total recognized in net periodic benefit cost and other comprehensive income
$
395

$
(655
)
$
249

 
$
8

$
(202
)
$
(103
)
Weighted-average assumptions used to determine net periodic benefit costs
 
 
 
 
Discount rate(c)
0.60 - 4.50 %

0.60 - 4.30 %

0.90 – 4.50%

 
3.70
%
4.20
%
4.40
%
Expected long-term rate of return on plan assets (c)
0.70 - 5.50
0.70 - 6.00
0.80 – 6.50
 
4.00

5.00

5.75

Rate of compensation increase (c)
2.25 - 3.00
2.25 - 3.00
2.25 – 4.30
 
NA

NA

NA

Interest crediting rate(c)
1.81- 4.90%

1.81- 4.90%

1.56- 4.90%

 
NA

NA

NA

Health care cost trend rate
 
 
 
 
 
 
 
Assumed for next year
NA

NA

NA

 
5.00

5.00

5.50

Ultimate
NA

NA

NA

 
5.00

5.00

5.00

Year when rate will reach ultimate
NA

NA

NA

 
2018
2017
2017

(a)
Effective January 1, 2018, benefits earned during the year are reported in compensation expense; all other components of net periodic defined benefit costs are reported within other expense in the Consolidated statements of income.
(b)
Includes various defined benefit pension plans which are individually immaterial.
(c)
The rate assumptions for the U.S. defined benefit pension plans are at the upper end of the range, except for the rate of compensation increase, which is 2.30% for both 2018 and 2017, and 3.50% for 2016.
Schedule of effect of 25-basis point decline on estimated future defined benefit plan expense and postretirement benefit obligations The following table represents the effect of a 25-basis point decline in the two listed rates below on estimated 2019 defined benefit pension and OPEB plan expense, as well as the effect on the postretirement benefit obligations.

(in millions)
Defined benefit pension and OPEB plan expense
 
Benefit obligation
Expected long-term rate of return
$
51

 
NA

Discount rate
$
50

 
$
490
Weighted-average asset allocation of the fair values of total plan assets The following table presents the weighted-average asset allocation of the fair values of total plan assets at December 31 for the years indicated, as well as the respective approved asset allocation ranges by asset class.
Defined benefit pension plans(a)
OPEB plan(d)
 
Asset
 
% of plan assets
 
Asset
 
% of plan assets
December 31,
Allocation
 
2018
 
2017
 
Allocation
 
2018
 
2017
Asset class
 
 
 
 
 
 
 
 
 
 
Debt securities(b)
27-100%

 
48
%
 
42
%
 
30-70%

 
61
%
 
61
%
Equity securities
10-45

 
37

 
42

 
30-70

 
39

 
39

Real estate
0-10

 
2

 
3

 
—

 
—

 
—

Alternatives (c)
0-35

 
13

 
13

 
—

 
—

 
—

Total
100
%
 
100
%
 
100
%
 
100
%
 
100
%
 
100
%
(a)
Represents the U.S. defined benefit pension plan only, as that is the most significant plan.
(b)
Debt securities primarily includes cash and cash equivalents, corporate debt, U.S. federal, state, local and non-U.S. government, and mortgage-backed securities.
(c)
Alternatives primarily include limited partnerships.
(d)
Represents the U.S. OPEB plan only, as the U.K. OPEB plan is unfunded.
Pension and OPEB plan assets and liabilities measured at fair value
Pension and OPEB plan assets and liabilities measured at fair value
 
 
 
 
 
 
 
 
 
Defined benefit pension plans
 
2018
 
2017
December 31,
(in millions)
Level 1
 
Level 2
 
Level 3
 
Total fair value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Cash and cash equivalents
$
343

 
$
1

 
$
—

 
$
344

 
$
173

 
$
1

 
$
—

 
$
174

Equity securities
5,342

 
162

 
2

 
5,506

 
6,407

 
194

 
2

 
6,603

Mutual funds
—

 
—

 
—

 
—

 
325

 
—

 
—

 
325

Collective investment funds(a)
161

 
—

 
—

 
161

 
778

 
—

 
—

 
778

Limited partnerships(b)
40

 
—

 
—

 
40

 
60

 
—

 
—

 
60

Corporate debt securities(c)
—

 
3,540

 
3

 
3,543

 
—

 
2,644

 
4

 
2,648

U.S. federal, state, local and non-U.S. government debt securities
1,191

 
743

 
—

 
1,934

 
1,096

 
784

 
—

 
1,880

Mortgage-backed securities
82

 
272

 
3

 
357

 
92

 
100

 
2

 
194

Derivative receivables
—

 
143

 
—

 
143

 
—

 
203

 
—

 
203

Other(d)
885

 
80

 
302

 
1,267

 
2,353

 
60

 
302

 
2,715

Total assets measured at fair value(e)
$
8,044

 
$
4,941

 
$
310

 
$
13,295

 
$
11,284

 
$
3,986

 
$
310

 
$
15,580

Derivative payables
$
—

 
$
(96
)
 
$
—

 
$
(96
)
 
$
—

 
$
(141
)
 
$
—

 
$
(141
)
Total liabilities measured at fair value(e)
$
—

 
$
(96
)
 
$
—

 
$
(96
)
 
$
—

 
$
(141
)
 
$
—

 
$
(141
)

(a)
At December 31, 2018 and 2017, collective investment funds primarily included a mix of short-term investment funds, U.S. and non-U.S. equity investments (including index) and real estate funds.
(b)
Unfunded commitments to purchase limited partnership investments for the plans were $521 million and $605 million for 2018 and 2017, respectively.
(c)
Corporate debt securities include debt securities of U.S. and non-U.S. corporations.
(d)
Other consists primarily of mutual funds, money market funds and participating and non-participating annuity contracts. Mutual funds and money market funds are primarily classified within level 1 of the fair value hierarchy given they are valued using market observable prices. Participating and non-participating annuity contracts are classified within level 3 of the fair value hierarchy due to a lack of market mechanisms for transferring each policy and surrender restrictions.
(e)
At December 31, 2018 and 2017, excludes $5.0 billion and $4.4 billion of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, which are not required to be classified in the fair value hierarchy, $340 million and $377 million of defined benefit pension plan receivables for investments sold and dividends and interest receivables, $479 million and $561 million of defined benefit pension plan payables for investments purchased, and $24 million and $26 million of other liabilities, respectively.
Changes in level 3 fair value measurements using significant unobservable inputs
Changes in level 3 fair value measurements using significant unobservable inputs
 
 
 
 

(in millions)
 
Fair value, Beginning balance
 
Actual return on plan assets
 
Purchases, sales and settlements, net
 
Transfers in and/or out of level 3
 
Fair value, Ending balance
Realized gains/(losses)
 
Unrealized gains/(losses)
Year ended December 31, 2018
   U.S. defined benefit pension plan
       Annuity contracts and other (a)
 
$
310

 
$
—

 
$
—

 
$
(1
)
 
$
1

 
$
310

  U.S. OPEB plan
       COLI policies
 
$
2,157

 
$
—

 
$
(85
)
 
$
—

 
$
—

 
$
2,072

Year ended December 31, 2017
   U.S. defined benefit pension plan
       Annuity contracts and other (a)
 
$
396

 
$
—

 
$
1

 
$
(87
)
 
$
—

 
$
310

   U.S. OPEB plan
       COLI policies
 
$
1,957

 
$
—

 
$
200

 
$
—

 
$
—

 
$
2,157

(a)
Substantially all are participating and non-participating annuity contracts.
Estimated future benefit payments The following table presents benefit payments expected to be paid, which include the effect of expected future service, for the years indicated. The OPEB medical and life insurance payments are net of expected retiree contributions.
Year ended December 31,
(in millions)
 
Defined benefit pension plans
 
 
OPEB before Medicare Part D subsidy
 
Medicare Part D subsidy
2019
 
$
939

 
 
$
62

 
$
1

2020
 
932

 
 
60

 
1

2021
 
921

 
 
57

 
1

2022
 
920

 
 
55

 
1

2023
 
919

 
 
52

 
—

Years 2024–2028
 
4,529

 
 
223

 
2