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Pension and Other Postretirement Employee Benefit Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Pension and Other Postretirement Employee Benefit Plans Pension and other postretirement employee benefit plans
The Firm has various defined benefit pension plans and OPEB plans that provide benefits to its employees in the U.S. and certain non-U.S. locations. The Firm also provides a qualified defined contribution plan in the U.S. and maintains other similar arrangements in certain non-U.S. locations.
The principal defined benefit pension plan in the U.S. is a qualified noncontributory plan that provides benefits to substantially all U.S. employees who were hired prior to December 2, 2017. The Firm has frozen the U.S. defined benefit pension plan (the “Plan Freeze”). Effective as of January 1, 2020 (and January 1, 2019 for new hires), new pay credits have been directed to the U.S. defined contribution plan. Interest credits will continue to accrue on the U.S. defined benefit pension plan. As a result of the Plan Freeze, a curtailment was triggered and a remeasurement of the U.S. defined benefit pension obligation and plan assets occurred as of November 30, 2018. The plan design change did not have a material impact on the U.S. defined benefit pension plan or the Firm’s Consolidated Financial Statements.
The Firm also has defined benefit pension plans that are offered in certain non-U.S. locations based on factors such as eligible compensation, age and/or years of service. It is the Firm’s policy to fund the pension plans in amounts sufficient to meet the requirements under applicable laws. The Firm does not anticipate at this time making any contribution to the U.S. defined benefit pension plan in 2021. The 2021 contributions to the non-U.S. defined benefit pension plans are expected to be $50 million, of which $35 million are contractually required.
The Firm also has a number of nonqualified noncontributory defined benefit pension plans that are unfunded. These plans provide supplemental defined pension benefits to certain employees.
The Firm offers postretirement medical and life insurance benefits to certain U.S. retirees and postretirement medical benefits to certain qualifying U.S. and U.K. employees.
The Firm partially defrays the cost of its U.S. OPEB obligation through corporate-owned life insurance (“COLI”) purchased on the lives of eligible employees and retirees. While the Firm owns the COLI policies, certain COLI proceeds (death benefits, withdrawals and other distributions) may be used only to reimburse the Firm for its net postretirement benefit claim payments and related administrative expense. The Firm has prefunded its U.S. postretirement benefit obligations. The U.K. OPEB plan is unfunded.   
Pension and OPEB accounting guidance generally requires that the difference between plan assets at fair value and the benefit obligation be measured and recorded on the balance sheet. Plans that are overfunded (excess of plan assets over benefit obligation) are recorded in other assets and plans that are underfunded (excess benefit obligation over plan assets) are recorded in other liabilities. Gains or losses resulting from changes in the benefit obligation and the fair value of plan assets are recorded in OCI and recognized as part of the net periodic benefit cost over subsequent periods as discussed in the Gains and losses section of this Note. Additionally, benefits earned during the year are reported in compensation expense; all other components of net periodic defined benefit costs are reported in other expense in the Consolidated statements of income.
The following table presents the pretax changes in benefit obligations, plan assets, the net funded status, and the amounts recorded in AOCI on the Consolidated balance sheets for the Firm’s defined benefit pension and OPEB plans.
As of or for the year ended December 31,Defined benefit
pension and OPEB plans
(in millions)20202019
Change in projected and accumulated benefit obligations, U.S. defined benefit pension plans
Benefit obligation, beginning of year$(13,277)$(12,173)
Benefits earned during the year(2)(327)
Interest cost on benefit obligations(422)(518)
Plan amendments— (5)
Net gain/(loss)(1,086)(944)
Benefits paid640 690 
Benefit obligations, end of year, U.S. defined benefit pension plans$(14,147)$(13,277)
Benefit obligations, other defined benefit pension and OPEB plans(4,990)(4,428)
Benefit obligations, end of year$(19,137)$(17,705)
Change in plan assets, U.S. defined benefit pension plans
Fair value of plan assets, beginning of year$16,329 $14,521 
Actual return on plan assets1,901 2,465 
Firm contributions29 33 
Benefits paid(640)(690)
Fair value of plan assets, end of year, U.S. defined benefit pension plans$17,619 $16,329 
Fair value of plan assets, other defined benefit pension and OPEB plans7,798 7,037 
Fair value of plan assets, end of year$25,417 $23,366 
Net funded status, U.S. defined benefit pension plans$3,472 $3,052 
Net funded status, other defined benefit pension and OPEB plans2,808 2,609 
Net funded status$6,280 $5,661 
Amounts recorded in accumulated other comprehensive income/(loss), U.S. defined benefit pension plans
Net gain/(loss), U.S. defined benefit pension plans$(1,558)$(1,745)
Prior service credit/(cost), U.S. defined benefit pension plans(4)(5)
Accumulated other comprehensive income/(loss), end of year, U.S. defined benefit pension plans$(1,562)$(1,750)
Accumulated other comprehensive income/(loss), other defined benefit pension and OPEB plans(24)(66)
Accumulated other comprehensive income/(loss)$(1,586)$(1,816)
The following table presents the weighted-average actuarial assumptions used to value the benefit obligations for the U.S. defined benefit pension plans.
U.S. defined benefit
pension plans
As of December 31, 20202019
Discount rate
 2.50%
 3.30%
Rate of compensation increase
 NA
 NA
Interest crediting rate
 4.65
 4.65
Gains and losses
For the Firm’s defined benefit pension plans, fair value is used to determine the expected return on plan assets. Amortization of net gains and losses is included in annual net periodic benefit cost if, as of the beginning of the year, the net gain or loss exceeds 10% of the greater of the projected benefit obligation or the fair value of the plan assets. Any excess is amortized over the average expected remaining lifetime of plan participants, which for the U.S. defined benefit pension plans is currently 37 years and for the non-U.S. defined benefit pension plans is the period appropriate for the affected plan. For the years ended December 31, 2020 and 2019, the net gain was primarily attributable to a market-driven increase in the fair value of plan assets, predominantly offset by a decrease in the discount rate.
The following table presents the components of net periodic benefit costs reported in the Consolidated statements of income for the Firm’s defined benefit pension, defined contribution and OPEB plans, and in other comprehensive income for the defined benefit pension and OPEB plans.
Pension and OPEB plans
Year ended December 31, (in millions)202020192018
Components of net periodic benefit cost, U.S. defined benefit pension plans
Benefits earned during the year$2 $327 $323 
Interest cost on benefit obligations422 518 478 
Expected return on plan assets(634)(776)(836)
Amortization:
Net (gain)/loss6 147 80 
Prior service (credit)/cost— — (21)
Curtailment (gain)/loss— — 21 
Net periodic defined benefit plan cost/(credit), U.S. defined benefit pension plans$(204)$216 $45 
Other defined benefit pension and OPEB plans(81)(72)(72)
Total net periodic defined benefit plan cost/(credit)$(285)$144 $(27)
Total defined contribution plans1,332 952 872 
Total pension and OPEB cost included in noninterest expense$1,047 $1,096 $845 
Changes recognized in other comprehensive income, U.S. defined benefit pension plans
Prior service (credit)/cost arising during the year— 5 — 
Net (gain)/loss arising during the year(181)(745)453 
Amortization of net (loss)/gain(6)(147)(80)
Amortization of prior service (cost)/credit— — 21 
Curtailment (loss)/gain— — (21)
Total recognized in other comprehensive income, U.S. defined benefit pension plans$(187)$(887)$373 
Other defined benefit pension and OPEB plans(27)(270)77 
Total recognized in other comprehensive income$(214)$(1,157)$450 
Total recognized in net periodic defined benefit plan cost/(credit) and other comprehensive income$(499)$(1,013)$423 
The following table presents the weighted-average actuarial assumptions used to determine the net periodic benefit costs for the U.S. defined benefit pension plans.
U.S. defined benefit pension plans
Year ended December 31, (in millions)202020192018
Discount rate
3.30%
4.30%
3.70 / 4.50%
Expected long-term rate of return on plan assets
4.00
5.50
5.50
Rate of compensation increase
NA
2.30
2.30
Interest crediting rate
4.65
4.90
4.90
Plan assumptions
The Firm’s expected long-term rate of return for defined benefit pension plan assets is a blended weighted average, by asset allocation of the projected long-term returns for the various asset classes, taking into consideration local market conditions and the specific allocation of plan assets. Returns on asset classes are developed using a forward-looking approach and are not strictly based on historical returns. Consideration is also given to current market conditions and the portfolio mix of each plan.
The discount rate used in determining the benefit obligation under the U.S. defined benefit pension plan was provided by the Firm’s actuaries. This rate was selected by reference to the yields on portfolios of bonds with maturity dates and coupons that closely match each of the plan’s projected cash flows.
At December 31, 2020, the Firm decreased the discount rates used to determine its benefit obligations for the U.S. defined benefit pension plans in light of current market interest rates, which is expected to decrease expense by approximately $64 million in 2021. The 2021 expected long-term rate of return on U.S. defined benefit pension plan assets is 3.00%.
The following table represents the effect of a 25-basis point decline in the expected long-term rate of return of 3.00% and discount rate of 2.50%.
Effect on U.S. defined benefit pension plans

(in millions)		Pension expenseBenefit obligation
Expected long-term rate of return
$43 NA
Discount rate
(20)404 




Investment strategy and asset allocation
The assets of the Firm’s defined benefit pension plans are held in various trusts and are invested in well-diversified portfolios of equity and fixed income securities, cash and cash equivalents, and alternative investments. The trust-owned assets of the Firm’s U.S. OPEB plan are invested primarily in fixed income securities. COLI policies used to partially defray the cost of the Firm’s U.S. OPEB plan are invested in separate accounts of an insurance company and are allocated to investments intended to replicate equity and fixed income indices.
The investment policies for the assets of the Firm’s defined benefit pension plans are to optimize the risk-return relationship as appropriate to the needs and goals of each plan. Assets are managed by a combination of internal and external investment managers. The Firm regularly reviews the asset allocations and asset managers, as well as other factors that could impact the portfolios, which are rebalanced when deemed necessary.
Investments held by the Firm’s defined benefit pension and OPEB plans include financial instruments which are exposed to various risks such as interest rate, market and credit risks. Exposure to a concentration of credit risk is mitigated by the broad diversification of both U.S. and non-U.S. investments. Additionally, the investments in each of the collective investment funds and/or registered investment companies are further diversified into various financial instruments. As of December 31, 2020, assets held by the Firm’s defined benefit pension and OPEB plans do not include securities issued by JPMorgan Chase or its affiliates, except through indirect exposures through investments in ETFs, mutual funds and collective investment funds managed by third-parties. The defined benefit pension and OPEB plans hold investments that are sponsored or managed by affiliates of JPMorgan Chase in the amount of $2.7 billion and $3.1 billion, as of December 31, 2020 and 2019, respectively.
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.
U.S. defined benefit pension plan(c)
Asset% of plan assets
December 31,Allocation20202019
Asset class
Debt securities(a)
42-100%
77 %74 %
Equity securities
0-40
15 16 
Real estate
0-4
1 1 
Alternatives(b)
0-15
7 9 
Total100 %100 %100 %
(a)Debt securities primarily includes cash and cash equivalents, corporate debt, U.S. federal, state, local and non-U.S. government, asset-backed and mortgage-backed securities.
(b)Alternatives primarily include limited partnerships.
(c)Represents the U.S. defined benefit pension plan only as it is the most significant plan. The other U.S. defined benefit pension plans are unfunded. The weighted-average asset allocation for the U.S. OPEB plan was 59% debt securities and 41% equity securities and 60% debt securities and 40% equity securities at December 31, 2020 and 2019, respectively.
Fair value measurement of the plans’ assets and liabilities
Refer to Note 2 for information on fair value measurements, including descriptions of level 1, 2, and 3 of the fair value hierarchy and the valuation methods employed by the Firm.
Pension plan assets and liabilities measured at fair value
Defined benefit pension and OPEB plans
20202019
December 31,
(in millions)
Level 1Level 2Level 3Total fair valueLevel 1Level 2Level 3Total fair value
Equity securities
$2,353 $— $2 $2,355 $2,259 $3 $2 $2,264 
Corporate debt securities— 7,414 11 7,425 — 6,474 2 6,476 
U.S. federal, state, local and non-U.S. government debt securities
1,395 360 — 1,755 1,616 401 — 2,017 
Mortgage-backed securities461 1,184 31 1,676 312 681 4 997 
Other(a)
788 861 201 1,850 718 49 250 1,017 
U.S. defined benefit pension plans(b)
$4,997 $9,819 $245 $15,061 $4,905 $7,608 $258 $12,771 
Other defined benefit pension and OPEB
plans(c)
2,034 2,565 2,707 7,306 1,834 2,307 2,431 6,572 
Total assets measured at fair value$7,031 $12,384 $2,952 $22,367 $6,739 $9,915 $2,689 $19,343 
(a)Other consists primarily of mutual funds, money market funds and participating annuity contracts.
(b)At December 31, 2020 and 2019, excludes $3.2 billion and $3.9 billion, respectively, of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, and $606 million and $343 million, respectively, of net defined benefit pension plan payables, primarily for investments sold and purchased, which are not required to be classified in the fair value hierarchy. Investments in level 3 of the valuation hierarchy include $199 million and $250 million of participating annuity contracts at December 31, 2020 and 2019, respectively.
(c)At December 31, 2020 and 2019, excludes $487 million and $465 million, respectively, of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient. Investments in level 3 of the valuation hierarchy include $2.7 billion and $2.4 billion of COLI policies at December 31, 2020 and 2019, respectively.
Changes in level 3 fair value measurements using significant unobservable inputsInvestments classified in level 3 of the valuation hierarchy increased $263 million in 2020 from $2.7 billion to $3.0 billion, consisting of $343 million in unrealized gains, partially offset by $113 million in settlements. In addition, there were transfers into level 3 of $33 million. In 2019, there was an increase of $307 million from $2.4 billion to $2.7 billion, consisting of $401 million in unrealized gains, partially offset by $85 million in settlements
Estimated future benefit payments
The following table presents benefit payments expected to be paid for the U.S. defined benefit pension plans for the years indicated.
Year ended December 31,
(in millions)		U.S. defined benefit pension plans
2021$912 
2022918 
2023897 
2024847 
2025829 
Years 2026–20303,843