XML 65 R40.htm IDEA: XBRL DOCUMENT v3.20.4
Pensions and Other Benefit Plans (Tables)
 12 Months Ended
Jan. 03, 2021
Retirement Benefits [Abstract]  
Components of Net Periodic Benefit Cost
Net periodic benefit costs for the Company’s defined benefit retirement plans and other benefit plans for 2020, 2019 and 2018 include the following components:
 Retirement PlansOther Benefit Plans
(Dollars in Millions)202020192018202020192018
Service cost$1,380 1,163 1,283 287 274 269 
Interest cost955 1,096 996 133 185 148 
Expected return on plan assets(2,461)(2,322)(2,212)(7)(6)(7)
Amortization of prior service cost 2 4 3 (31)(31)(31)
Recognized actuarial losses (gains)891 579 852 142 129 123 
Curtailments and settlements23 73 1 — — — 
Net periodic benefit cost$790 593 923 524 551 502 
Rates Used to Develop Actuarial Present Value of Projected Benefit Obligation
The following table represents the weighted-average actuarial assumptions:
 Retirement PlansOther Benefit Plans
Worldwide Benefit Plans202020192018202020192018
Net Periodic Benefit Cost
Service cost discount rate2.82 %3.63 3.20 3.04 4.45 3.85 
Interest cost discount rate3.13 %4.13 3.60 3.08 4.25 3.62 
Rate of increase in compensation levels4.00 %3.99 3.98 4.25 4.29 4.29 
Expected long-term rate of return on plan assets8.12 %8.31 8.46 
Benefit Obligation
Discount rate2.14 %2.91 3.76 2.23 3.39 4.40 
Rate of increase in compensation levels4.00 %4.01 3.97 4.27 4.29 4.29 
Assumed Health Care Cost Trend Rates
The following table displays the assumed health care cost trend rates, for all individuals:
Health Care Plans20202019
Health care cost trend rate assumed for next year5.68 %5.87 %
Rate to which the cost trend rate is assumed to decline (ultimate trend)4.49 %4.50 %
Year the rate reaches the ultimate trend rate2040 2040 
Schedule of Net Funded Status
The following table sets forth information related to the benefit obligation and the fair value of plan assets at fiscal year-end 2020 and 2019 for the Company’s defined benefit retirement plans and other post-retirement plans:
 Retirement PlansOther Benefit Plans
(Dollars in Millions)2020201920202019
Change in Benefit Obligation
Projected benefit obligation — beginning of year$37,188 31,670 5,076 4,480 
Service cost1,380 1,163 287 274 
Interest cost955 1,096 133 185 
Plan participant contributions61 63 — — 
Amendments(1)
(1,780)— — — 
Actuarial (gains) losses(2)
5,716 5,178 (75)562 
Divestitures & acquisitions(88)(278)— — 
Curtailments, settlements & restructuring(24)(172)— — 
Benefits paid from plan(1,111)(1,555)(3)(396)(431)
Effect of exchange rates1,003 23 3 6 
Projected benefit obligation — end of year$43,300 37,188 5,028 5,076 
Change in Plan Assets
Plan assets at fair value — beginning of year$32,201 26,818 115 180 
Actual return on plan assets5,524 6,185 14 19 
Company contributions870 908 357 347 
Plan participant contributions61 63 — — 
Settlements(13)(16)— — 
Divestitures & acquisitions(84)(274)— — 
Benefits paid from plan assets(1,111)(1,555)(3)(396)(431)
Effect of exchange rates747 72 — — 
Plan assets at fair value — end of year$38,195 32,201 90 115 
Funded status — end of year$(5,105)(4,987)(4,938)(4,961)
Amounts Recognized in the Company’s Balance Sheet consist of the following:
Non-current assets$656 551 — — 
Current liabilities(125)(113)(418)(397)
Non-current liabilities(5,636)(5,425)(4,520)(4,564)
Total recognized in the consolidated balance sheet — end of year$(5,105)(4,987)(4,938)(4,961)
Amounts Recognized in Accumulated Other Comprehensive Income consist of the following:
Net actuarial loss$10,860 8,835 1,463 1,685 
Prior service cost (credit)(1)
(1,797)(8)(44)(75)
Unrecognized net transition obligation— — — — 
Total before tax effects$9,063 8,827 1,419 1,610 
Accumulated Benefit Obligations — end of year$40,356 33,416 
(1)In January 2021, the Company announced that, effective on January 1, 2026, all eligible U.S. non-union employees, regardless of hire date, will earn benefits under the Retirement Value formula. This amendment does not affect the benefits accrued under the Final Average Pay formula for service before January 1, 2026.
(2)The actuarial losses for retirement plans in 2020 and 2019 was primarily related to decreases in discount rates.
(3)In 2019, the Company offered a voluntary lump-sum payment option for certain eligible former employees who are vested participants of the U.S. Qualified Defined Benefit Pension Plan. The distribution of the lump-sums was completed by the end of fiscal 2019. The amount distributed in 2019 was approximately $514 million.
 Retirement PlansOther Benefit Plans
(Dollars in Millions)2020201920202019
Amounts Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
Net periodic benefit cost$790 593 524 551 
Net actuarial (gain) loss2,616 1,084 (81)550 
Amortization of net actuarial loss(891)(579)(142)(129)
Prior service cost (credit)(1,780)— — — 
Amortization of prior service (cost) credit(2)(4)31 31 
Effect of exchange rates293 1 1 1 
Total loss/(income) recognized in other comprehensive income, before tax$236 502 (191)453 
Total recognized in net periodic benefit cost and other comprehensive income$1,026 1,095 333 1,004 
Information Related to the Benefit Obligation and the Fair Value of Plan Assets
The following table displays the funded status of the Company's U.S. Qualified & Non-Qualified pension plans and international funded and unfunded pension plans at December 31, 2020 and December 31, 2019, respectively:

U.S. PlansInternational Plans
Qualified PlansNon-Qualified PlansFunded PlansUnfunded Plans
(Dollars in Millions)20202019202020192020201920202019
Plan Assets$25,554 21,398 — — 12,641 10,803 — — 
Projected Benefit Obligation25,466 22,034 2,748 2,544 14,541 12,132 545 478 
Accumulated Benefit Obligation24,158 19,831 2,495 2,115 13,210 11,040 493 430 
Over (Under) Funded Status
Projected Benefit Obligation$88 (636)(2,748)(2,544)(1,900)(1,329)(545)(478)
Accumulated Benefit Obligation1,396 1,567 (2,495)(2,115)(569)(237)(493)(430)
Projected Future Benefit Payments from Company's Retirement and Other Benefit Plans
The following table displays the projected future benefit payments from the Company’s retirement and other benefit plans:
(Dollars in Millions)202120222023202420252026-2030
Projected future benefit payments
Retirement plans$1,257 1,292 1,388 1,424 1,494 8,795 
Other benefit plans $427 440 453 465 417 2,273 
Projected Future Minimum Contributions to the Company's U.S. and International Unfunded Retirement Plans
The following table displays the projected future minimum contributions to the unfunded retirement plans. These amounts do not include any discretionary contributions that the Company may elect to make in the future.
(Dollars in Millions)202120222023202420252026-2030
Projected future contributions$110 116 121 130 136 787 
Company' Retirement Plan Asset Allocation and Target Allocations
The Company’s retirement plan asset allocation at the end of 2020 and 2019 and target allocations for 2021 are as follows:
Percent of
Plan Assets		Target
Allocation
 202020192021
Worldwide Retirement Plans
Equity securities66 %74 %67 %
Debt securities34 26 33 
Total plan assets100 %100 %100 %
Schedule of Defined Benefit Plans Disclosures
The following table sets forth the Retirement Plans' investments measured at fair value as of December 31, 2020 and December 31, 2019:
Quoted Prices
in Active
Markets for
Identical Assets		Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs(1)
Investments Measured at Net Asset Value
 (Level 1)(Level 2)(Level 3)Total Assets
(Dollars in Millions)2020201920202019202020192020201920202019
Short-term investment funds$127 119 763 405 — — — — 890 524 
Government and agency securities— — 5,023 4,140 — — — — 5,023 4,140 
Debt instruments— — 3,931 3,452 — — — — 3,931 3,452 
Equity securities14,375 12,483 2 2 — — — — 14,377 12,485 
Commingled funds— — 4,690 3,338 160 181 8,236 7,580 13,086 11,099 
Other assets— — 11 9 21 19 856 473 888 501 
Investments at fair value$14,502 12,602 14,420 11,346 181 200 9,092 8,053 38,195 32,201 

(1) The activity for the Level 3 assets is not significant for all years presented.