Pension and Other Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefit Plans

Pension and Other Postretirement Benefit Plans

The Company has defined benefit pension plans covering eligible employees in the United States and in certain of its international subsidiaries. The net periodic benefit cost of such plans consisted of the following components: 

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
($ in millions)	U.S.		International		U.S.		International		U.S.		International		U.S.		International
Service cost	$	96	$	77	$	76	$	58	$	270	$	225	$	221	$	178
Interest cost	107		35		115		44		323		103		343		133
Expected return on plan assets	(193)		(104)		(202)		(106)		(581)		(310)		(613)		(320)
Amortization of unrecognized prior service credit	(12)		(3)		(12)		(3)		(37)		(9)		(37)		(9)
Net loss amortization	75		32		43		16		228		94		113		47
Termination benefits	1		1		3		—		5		2		7		1
Curtailments	1		—		5		—		4		(1)		6		—
Settlements	2		—		—		—		11		2		—		—
	$	77	$	38	$	28	$	9	$	223	$	106	$	40	$	30

The Company anticipates that in 2020 it will contribute approximately $200 million and $375 million to its U.S. and international pension plans, respectively, of which $184 million and $123 million, respectively, was contributed in the first nine months of the year.

The Company provides medical benefits, principally to its eligible U.S. retirees and similar benefits to their dependents, through its other postretirement benefit plans. The net credit of such plans consisted of the following components: 

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2020		2019		2020		2019
Service cost	$	13	$	12	$	39	$	36
Interest cost	14		17		43		52
Expected return on plan assets	(19)		(18)		(56)		(54)
Amortization of unrecognized prior service credit	(18)		(20)		(54)		(59)
Net gain amortization	(5)		(3)		(13)		(7)
Termination benefits	—		1		—		1
Curtailments	—		(3)		(1)		(4)
	$	(15)	$	(14)	$	(42)	$	(35)

In connection with restructuring actions (see Note 4), termination charges were recorded on pension plans related to expanded eligibility for certain employees exiting Merck. Also, in connection with these restructuring actions, curtailments were recorded on pension and other postretirement benefit plans and settlements were recorded on certain U.S. and international pension plans as reflected in the tables above.

The components of net periodic benefit cost (credit) other than the service cost component are included in Other (income) expense, net (see Note 13), with the exception of certain amounts for termination benefits, curtailments and

settlements, which are recorded in Restructuring costs if the event giving rise to the termination benefits, curtailment or settlement is related to restructuring actions as noted above.