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Retirement Plans and Other Retiree Benefits
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Retirement Plans and Other Retiree Benefits Retirement Plans and Other Retiree Benefits
Retirement Plans

The Company and certain of its U.S. and foreign subsidiaries maintain defined benefit retirement plans. Benefits under these plans are based primarily on years of service and employees’ earnings.

In the U.S., effective January 1, 2014, the Company provides virtually all future retirement benefits through the Company’s defined contribution plan. As a result, service after December 31, 2013 is not considered for participants in the Company’s principal U.S. defined benefit retirement plan. Participants in the Company’s principal U.S. defined benefit retirement plan whose retirement benefit was determined under the cash balance formula continue to earn interest credits on their vested balances as of December 31, 2013 but no longer receive pay credits. Participants whose retirement benefit was determined under the final average earnings formula or career average earnings formula continue to have their accrued benefit adjusted for pay increases until termination of employment.
In the Company’s principal U.S. plans and certain funded foreign plans, funds are contributed to trusts in accordance with regulatory limits to provide for current service and for any unfunded projected benefit obligation over a reasonable period. The target asset allocation for the Company’s defined benefit plans is as follows:
  United StatesInternational
Asset Category
Equity securities21 %38 %
Fixed income securities74 %46 %
Real estate and other investments5 %16 %
Total100 %100 %

At December 31, 2020, the allocation of the Company’s plan assets and the level of valuation input, as applicable, for each major asset category were as follows:
 Level of Valuation
Input		Pension Plans 
  United StatesInternationalOther Retiree
Benefit Plans
     
Cash and cash equivalentsLevel 1$50 $12 $— 
U.S. common stocksLevel 1— 1 — 
International common stocksLevel 1— 8 — 
Pooled funds(1)
Level 165 117 — 
Fixed income securities(2)
Level 21,117 59 2 
Guaranteed investment contracts(3)
Level 21 55 — 
  1,233 252 2 
Investments valued using NAV per share(4)
  
Domestic, developed and emerging markets equity funds  456 183 1 
Fixed income funds(5)
  136 225 — 
Hedge funds(6)
  — 6 — 
Multi-asset funds(7)
  77 2 — 
Real estate funds(8)
34 30 — 
  703 446 1 
Other assets and liabilities, net(9)
(15)— — 
Total Investments$1,921 $698 $3 
At December 31, 2019, the allocation of the Company’s plan assets and the level of valuation input, as applicable, for each major asset category were as follows:
 Level of Valuation
Input		Pension Plans 
  United StatesInternationalOther Retiree
Benefit Plans
    
Cash and cash equivalentsLevel 1$41 $15 $1 
U.S. common stocksLevel 149 3 1 
International common stocksLevel 1— 3 — 
Pooled funds(1)
Level 129 104 2 
Fixed income securities(2)
Level 21,067 14 20 
Guaranteed investment contracts(3)
Level 21 42 — 
  1,187 181 24 
Investments valued using NAV per share(4)
  
Domestic, developed and emerging markets equity funds  328 165 7 
Fixed income funds(5)
  177 196 3 
Hedge funds(6)
  3 17 — 
Multi-asset funds(7)
  155 2 2 
Real estate funds(8)
41 25 1 
704 405 13 
Other assets and liabilities, net(9)
(85)— — 
Total Investments  $1,806 $586 $37 
_______
(1)Pooled funds primarily invest in U.S. and foreign equity securities, debt and money market securities.
(2)The fixed income securities are traded over-the-counter and certain of these securities lack daily pricing or liquidity and as such are classified as Level 2. As of both December 31, 2020 and 2019, approximately 50% of the U.S. pension plan fixed income portfolio was invested in U.S. treasury or agency securities, with the remainder invested in other government bonds and corporate bonds.
(3)The guaranteed investment contracts (“GICs”) represent contracts with insurance companies measured at the cash surrender value of each contract. The Level 2 valuation reflects that the cash surrender value is based principally on a referenced pool of investment funds with active redemption.
(4)Investments that are measured at fair value using net asset value (“NAV”) per share as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the value of the underlying investments owned, minus its liabilities, divided by the number of shares outstanding. There are no unfunded commitments related to these investments. Redemption notice period primarily ranges from 0-3 months and redemption frequency windows range from daily to quarterly.
(5)Fixed income funds primarily invest in U.S. government and investment grade corporate bonds.
(6)Consists of investments in underlying hedge fund strategies that are primarily implemented through the use of long and short equity and fixed income securities and derivative instruments such as futures and options.
(7)Multi-asset funds primarily invest across a variety of asset classes, including global stocks and bonds, as well as alternative strategies.
(8)Real estate is valued using the NAV per unit of funds that are invested in real estate property. The investment value of the real estate property is determined quarterly using independent market appraisals as determined by the investment manager.
(9)This category primarily includes unsettled trades for investments purchased and sold and dividend receivables.
Equity securities in the U.S. plans include investments in the Company’s common stock representing 0% and 3% of U.S. plan assets at December 31, 2020 and December 31, 2019, respectively. In 2020 and 2019, the U.S. plans sold 739,869 and 588,334 shares, respectively, of the Company’s common stock to the Company. No shares of the Company’s stock were purchased by the U.S. plans in 2020 or 2019. The plans received dividends on the Company’s common stock of $0 in 2020 and $2 in 2019.

Other Retiree Benefits

The Company and certain of its subsidiaries provide health care and life insurance benefits for retired employees to the extent not provided by government-sponsored plans.

The Company uses a December 31 measurement date for its defined benefit and other retiree benefit plans. Summarized information for the Company’s defined benefit and other retiree benefit plans is as follows:
  Pension PlansOther Retiree Benefit Plans
 202020192020201920202019
  United StatesInternational  
Change in Benefit Obligations      
Benefit obligations at beginning of year$2,272 $2,147 $876 $787 $1,050 $876 
Service cost1 1 17 14 20 15 
Interest cost74 90 21 22 37 41 
Participants’ contributions— — 5 2 — — 
Acquisitions/plan amendments— — 30 3 — — 
Actuarial loss (gain)171 181 65 82 61 166 
Foreign exchange impact— — 46 8 (9)1 
Termination benefits3 7 — — — — 
Curtailments and settlements(3)— (7)(9)— — 
Benefit payments(155)(154)(40)(35)(47)(49)
Other— — — 2 — — 
Benefit obligations at end of year$2,363 $2,272 $1,013 $876 $1,112 $1,050 
Change in Plan Assets  
Fair value of plan assets at beginning of year$1,806 $1,568 $586 $510 $37 $54 
Actual return on plan assets243 262 59 76 2 8 
Company contributions30 130 36 30 11 24 
Participants’ contributions— — 5 2 — — 
Foreign exchange impact— — 26 12 — — 
Settlements and acquisitions(3)— 26 (9)— — 
Benefit payments(155)(154)(40)(35)(47)(49)
Other— — — — — — 
Fair value of plan assets at end of year$1,921 $1,806 $698 $586 $3 $37 
Funded Status  
Benefit obligations at end of year$2,363 $2,272 $1,013 $876 $1,112 $1,050 
Fair value of plan assets at end of year1,921 1,806 698 586 3 37 
Net amount recognized$(442)$(466)$(315)$(290)$(1,109)$(1,013)
Amounts Recognized in Balance Sheet    
Noncurrent assets$20 $— $18 $13 $— $— 
Current liabilities(30)(28)(14)(13)(45)(13)
Noncurrent liabilities(432)(438)(319)(290)(1,064)(1,000)
Net amount recognized$(442)$(466)$(315)$(290)$(1,109)$(1,013)
Amounts Recognized in Accumulated Other Comprehensive Income (Loss)
  
Actuarial loss$902 $910 $255 $238 $429 $388 
Transition/prior service cost1 1 7 7 — (1)
  $903 $911 $262 $245 $429 $387 
Accumulated benefit obligation$2,325 $2,236 $946 $816 $— $— 
  Pension PlansOther Retiree Benefit Plans
  202020192020201920202019
  United StatesInternational  
Weighted-Average Assumptions Used to Determine Benefit Obligations
      
Discount rate2.65 %3.40 %1.61 %2.06 %2.88 %3.56 %
Expected long-term rate of return on plan assets5.70 %6.30 %2.93 %3.38 %5.70 %6.30 %
Long-term rate of compensation increase3.50 %3.50 %2.62 %2.83 %3.50 %3.50 %
ESOP growth rate— %— %— %— %10.00 %10.00 %
Medical cost trend rate of increase— %— %— %— %6.00 %6.00 %
Interest Crediting Rate2.48 %3.21 %0.83 %0.85 %— %— %

The actuarial losses incurred during 2020 were primarily driven by a decrease in discount rates applied against future expected benefit payments that resulted in an increase in the benefit obligation for both the U.S. pension and Other retiree benefit plans. The actuarial gains recorded during 2019 for both the U.S. pension and other retiree benefit plans were primarily a result of an increase in discount rates applied against future estimated benefit payments.
The overall investment objective of the plans is to balance risk and return so that obligations to employees are met. The Company evaluates its expected long-term rate of return on plan assets on an annual basis. In determining the expected long-term rate of return, the Company considers the nature of the plans’ investments and the historical rates of return. The assumed expected long-term rate of return on plan assets as of December 31, 2020 for the U.S. plans was 5.70%. Average annual rates of return for the U.S. plans for the most recent 1-year, 5-year, 10-year, 15-year and 25-year periods were 15%, 9%, 8%, 7% and 7%, respectively. Similar assessments were performed in determining rates of return on international pension plan assets to arrive at the Company’s 2020 weighted-average expected long-term rate of return on plan assets of 2.93%.

The medical cost trend rate of increase assumed in measuring the expected cost of benefits is projected to decrease from 6.00% in 2021 to 4.75% by 2026, remaining at 4.75% for the years thereafter.
Pension plans with projected benefit obligations in excess of plan assets and plans with accumulated benefit obligations in excess of plan assets as of December 31 consisted of the following:
  20202019
Benefit Obligation Exceeds Fair Value of Plan Assets  
Projected benefit obligation$1,092 $2,862 
Fair value of plan assets299 2,094 
Accumulated benefit obligation882 875 
Fair value of plan assets134 166 

Other Retiree Benefit plans with accumulated postretirement benefit obligation in excess of plan assets as of December 31 consisted of the following:
  20202019
Benefit Obligation Exceeds Fair Value of Plan Assets  
Accumulated postretirement benefit obligation$1,112 $958 
Fair value of plan assets3 37 

Summarized information regarding the net periodic benefit costs for the Company’s defined benefit and other retiree benefit plans is as follows:
  Pension PlansOther Retiree Benefit Plans
  202020192018202020192018202020192018
  United StatesInternational   
Components of Net Periodic Benefit Cost
         
Service cost$1 $1 $1 $17 $14 $14 $20 $15 $16 
Interest cost74 90 86 21 22 21 37 41 38 
Expected return on plan assets
(111)(103)(115)(22)(19)(21)(2)(3)(2)
Amortization of transition and prior service costs (credits)
— — — — 1 — — — — 
Amortization of actuarial loss
46 51 47 9 9 8 18 11 14 
Net periodic benefit cost$10 $39 $19 $25 $27 $22 $73 $64 $66 
Other postretirement charges
4 7 9 — 1 2 — — — 
Total pension cost$14 $46 $28 $25 $28 $24 $73 $64 $66 
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost
         
Discount rate3.40 %4.38 %3.73 %

2.06 %2.80 %2.53 %3.56 %4.43 %3.80 %
Expected long-term rate of return on plan assets6.30 %6.60 %6.60 %3.38 %4.06 %4.04 %6.30 %6.60 %6.60 %
Long-term rate of compensation increase
3.50 %3.50 %3.50 %2.83 %2.86 %2.79 %— %— %— %
ESOP growth rate— %— %— %— %— %— %10.00 %10.00 %10.00 %
Medical cost trend rate of increase— %— %— %— %— %— %6.00 %6.00 %6.00 %
Interest Crediting Rate3.21 %4.26 %3.73 %0.85 %0.85 %0.85 %— %— %— %
The service related component of pension and other postretirement benefit costs is included in Operating profit. The non-service related components (interest cost, expected return on assets and amortization of actuarial gains and losses) are included in the line item “Non-service related postretirement costs,” which is below Operating profit.

Other postretirement charges in 2020, 2019 and 2018 include pension and other benefit enhancements amounting to $3, $7 and $9, respectively. Other postretirement charges from 2019 and 2018 were incurred pursuant to the Global Growth and Efficiency Program. Other postretirement charges in 2019 also include charges of $1, in part due to retirements under the Global Growth and Efficiency Program.

The Company made voluntary contributions of $0, $113 and $67 in 2020, 2019 and 2018, respectively, to its U.S. retirement plans.

Expected Contributions and Benefit Payments

The Company does not expect to make any voluntary contributions to its U.S. postretirement plans for the year ending December 31, 2021. Actual funding may differ from current estimates depending on the variability of the market value of the assets as compared to the obligation and other market or regulatory conditions.

Benefit payments expected to be paid from the Company’s assets to participants in unfunded plans are estimated to be approximately $90 for the year ending December 31, 2021.

Total benefit payments expected to be paid to participants in both funded and unfunded plans are estimated as follows:
  Pension Plans 
Years Ended December 31,United StatesInternationalOther Retiree Benefit PlansTotal
2021$154 $42 $49 $245 
2022156 41 49 246 
2023157 42 50 249 
2024156 46 51 253 
2025155 45 52 252 
2026-2030741 244 269 1,254