XML 135 R37.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Retirement Plans (Tables)
 12 Months Ended
Dec. 31, 2019
Compensation And Retirement Disclosure [Abstract]  
Change in Benefit Obligation, Fair Value of Plan Assets, and Funded Status of Pension Plans and Postretirement Medical Plan

The following table summarizes the benefit obligations, the fair value of plan assets, and the funded status of our pension and postretirement medical plans:

 

 

Funded

 

 

Unfunded

 

 

Postretirement

 

 

 

Pension Plans

 

 

Pension Plan

 

 

Medical Plan

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(In millions)

 

Change in Benefit Obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1,

 

$

2,492

 

 

$

2,765

 

 

$

216

 

 

$

249

 

 

$

59

 

 

$

87

 

Service cost

 

 

33

 

 

 

30

 

 

 

11

 

 

 

12

 

 

 

2

 

 

 

2

 

Interest cost

 

 

82

 

 

 

84

 

 

 

7

 

 

 

7

 

 

 

2

 

 

 

3

 

Actuarial (gains) loss (a)

 

 

401

 

 

 

(237

)

 

 

22

 

 

 

(29

)

 

 

19

 

 

 

(24

)

Single premium annuity contract payment

 

 

(249

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Benefit payments (b)

 

 

(113

)

 

 

(110

)

 

 

(14

)

 

 

(19

)

 

 

(7

)

 

 

(7

)

Plan curtailments

 

 

—

 

 

 

(10

)

 

 

—

 

 

 

(4

)

 

 

—

 

 

 

(2

)

Plan amendments

 

 

—

 

 

 

4

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency exchange rate changes

 

 

21

 

 

 

(34

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31, (c)

 

 

2,667

 

 

 

2,492

 

 

 

242

 

 

 

216

 

 

 

75

 

 

 

59

 

Change in Fair Value of Plan Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1,

 

$

2,568

 

 

$

2,732

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Actual return on plan assets

 

 

462

 

 

 

(77

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Employer contributions

 

 

40

 

 

 

59

 

 

 

14

 

 

 

19

 

 

 

7

 

 

 

7

 

Single premium annuity contract payment

 

 

(249

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Benefit payments (b)

 

 

(113

)

 

 

(110

)

 

 

(14

)

 

 

(19

)

 

 

(7

)

 

 

(7

)

Foreign currency exchange rate changes

 

 

24

 

 

 

(36

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31,

 

 

2,732

 

 

 

2,568

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded Status (Plan assets greater (less) than benefit obligations) at December 31,

 

$

65

 

 

$

76

 

 

$

(242

)

 

$

(216

)

 

$

(75

)

 

$

(59

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrecognized Net Actuarial (Gains) Losses

 

$

756

 

 

$

778

 

 

$

65

 

 

$

47

 

 

$

(12

)

 

$

(32

)

(a)

Changes in discount rates resulted in actuarial losses of approximately $465 million in 2019 (2018: $235 million of actuarial gains from changes in discount rates).

(b)

Benefit payments include lump-sum settlement payments of approximately $27 million in 2019 (2018: $32 million).

(c)

At December 31, 2019, the accumulated benefit obligation for the funded and unfunded defined benefit pension plans was $2,580 million and $194 million, respectively (2018: $2,424 million and $171 million, respectively).
Pension Plans and Postretirement Medical Plan Amounts Recognized in Consolidated Balance Sheet

  Amounts recognized in the Consolidated Balance Sheet at December 31 consisted of the following:

 

 

Funded

 

 

Unfunded

 

 

Postretirement

 

 

 

Pension Plans

 

 

Pension Plan

 

 

Medical Plan

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(In millions)

 

Noncurrent assets

 

$

71

 

 

$

76

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Current liabilities

 

 

—

 

 

 

—

 

 

 

(32

)

 

 

(30

)

 

 

(8

)

 

 

(9

)

Noncurrent liabilities

 

 

(6

)

 

 

—

 

 

 

(210

)

 

 

(186

)

 

 

(67

)

 

 

(50

)

Pension assets / (accrued benefit liability)

 

$

65

 

 

$

76

 

 

$

(242

)

 

$

(216

)

 

$

(75

)

 

$

(59

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive loss, pre-tax (a)

 

$

756

 

 

$

778

 

 

$

65

 

 

$

47

 

 

$

(12

)

 

$

(32

)

(a)

The after‑tax deficit reflected in Accumulated other comprehensive income (loss) was $601 million at December 31, 2019 (2018: $581 million deficit).

Components of Net Periodic Benefit Cost for Funded and Unfunded Pension Plans and Postretirement Medical Plan

The net periodic benefit cost for funded and unfunded pension plans, and the postretirement medical plan, is as follows:

 

 

Pension Plans

 

 

Postretirement Medical Plan

 

 

 

2019

 

 

2018

 

 

2017

 

 

2019

 

 

2018

 

 

2017

 

 

 

(In millions)

 

Service cost

 

$

44

 

 

$

42

 

 

$

49

 

 

$

2

 

 

$

2

 

 

$

4

 

Interest cost

 

 

89

 

 

 

91

 

 

 

102

 

 

 

2

 

 

 

3

 

 

 

3

 

Expected return on plan assets

 

 

(180

)

 

 

(194

)

 

 

(168

)

 

 

—

 

 

 

—

 

 

 

—

 

Amortization of unrecognized net actuarial losses (gains)

 

 

52

 

 

 

39

 

 

 

58

 

 

 

(1

)

 

 

(2

)

 

 

—

 

Settlement loss

 

 

93

 

 

 

4

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

—

 

Curtailment gain

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(2

)

 

 

—

 

Net Periodic Benefit Cost (a)

 

$

98

 

 

$

(18

)

 

$

60

 

 

$

3

 

 

$

1

 

 

$

7

 

(a)

Net non-service pension costs are included in Other, net in the Statement of Consolidated Income.  In 2019, net non-service pension costs amounted to an expense of $55 million (2018: $61 million of income; 2017: $14 million of expense).
Actuarial Assumptions Used For Pension Plans & Postretirement Medical Plan The weighted average actuarial assumptions used to determine Benefit obligations at December 31 and Net periodic benefit cost for the three years ended December 31 for our funded and unfunded pension plans were as follows:

 

 

2019

 

 

2018

 

 

2017

 

Benefit Obligations:

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

2.9

%

 

 

3.9

%

 

 

3.3

%

Rate of compensation increase

 

 

3.8

%

 

 

3.8

%

 

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Periodic Benefit Cost:

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

3.9

%

 

 

3.9

%

 

 

3.7

%

Interest cost

 

 

3.4

%

 

 

3.3

%

 

 

3.7

%

Expected return on plan assets

 

 

7.1

%

 

 

7.2

%

 

 

7.3

%

Rate of compensation increase

 

 

3.8

%

 

 

4.5

%

 

 

4.6

%

The actuarial assumptions used to determine Benefit obligations at December 31 for the postretirement medical plan were as follows:

 

 

2019

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

2.8

%

 

 

3.9

%

 

 

3.2

%

Initial health care trend rate

 

 

6.5

%

 

 

6.9

%

 

 

7.3

%

Ultimate trend rate

 

 

4.5

%

 

 

4.5

%

 

 

4.5

%

Year in which ultimate trend rate is reached

 

 

2038

 

 

 

2038

 

 

 

2038

 
Fair Value of Financial Assets of Funded Pension Plans

Fair value:  The following tables provide the fair value of the financial assets of the funded pension plans at December 31, 2019 and 2018 in accordance with the fair value measurement hierarchy described in Note 1, Nature of Operations, Basis of Presentation and Summary of Accounting Policies.

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Net Asset

Value (d)

 

 

Total

 

 

 

(In millions)

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Short-Term Investment Funds

 

$

57

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

57

 

Equities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. equities (domestic)

 

 

638

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

638

 

International equities (non-U.S.)

 

 

80

 

 

 

37

 

 

 

—

 

 

 

302

 

 

 

419

 

Global equities (domestic and non-U.S.)

 

 

—

 

 

 

8

 

 

 

—

 

 

 

196

 

 

 

204

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury and government issued (a)

 

 

—

 

 

 

210

 

 

 

—

 

 

 

—

 

 

 

210

 

Government related (b)

 

 

—

 

 

 

162

 

 

 

—

 

 

 

56

 

 

 

218

 

Mortgage-backed securities (c)

 

 

—

 

 

 

141

 

 

 

—

 

 

 

30

 

 

 

171

 

Corporate

 

 

—

 

 

 

293

 

 

 

—

 

 

 

82

 

 

 

375

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedge funds

 

 

—

 

 

 

—

 

 

 

—

 

 

 

65

 

 

 

65

 

Private equity funds

 

 

—

 

 

 

—

 

 

 

—

 

 

 

191

 

 

 

191

 

Real estate funds

 

 

27

 

 

 

—

 

 

 

—

 

 

 

157

 

 

 

184

 

Total investments

 

$

802

 

 

$

851

 

 

$

—

 

 

$

1,079

 

 

$

2,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Short-Term Investment Funds

 

$

3

 

 

$

47

 

 

$

—

 

 

$

—

 

 

$

50

 

Equities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. equities (domestic)

 

 

654

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

654

 

International equities (non-U.S.)

 

 

92

 

 

 

29

 

 

 

—

 

 

 

288

 

 

 

409

 

Global equities (domestic and non-U.S.)

 

 

2

 

 

 

203

 

 

 

—

 

 

 

—

 

 

 

205

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury and government issued (a)

 

 

—

 

 

 

240

 

 

 

—

 

 

 

—

 

 

 

240

 

Government related (b)

 

 

—

 

 

 

37

 

 

 

—

 

 

 

—

 

 

 

37

 

Mortgage-backed securities (c)

 

 

—

 

 

 

159

 

 

 

—

 

 

 

27

 

 

 

186

 

Corporate

 

 

—

 

 

 

272

 

 

 

—

 

 

 

31

 

 

 

303

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedge funds

 

 

—

 

 

 

—

 

 

 

—

 

 

 

135

 

 

 

135

 

Private equity funds

 

 

—

 

 

 

—

 

 

 

—

 

 

 

170

 

 

 

170

 

Real estate funds

 

 

49

 

 

 

—

 

 

 

—

 

 

 

111

 

 

 

160

 

Diversified commodities funds

 

 

—

 

 

 

19

 

 

 

—

 

 

 

—

 

 

 

19

 

Total investments

 

$

800

 

 

$

1,006

 

 

$

—

 

 

$

762

 

 

$

2,568

 

(a)

Includes securities issued and guaranteed by U.S. and non‑U.S. governments.

(b)

Primarily consists of securities issued by governmental agencies and municipalities.

(c)

Comprised of U.S. residential and commercial mortgage-backed securities.

(d)

Includes certain investments that have been valued using the net asset value (NAV) practical expedient, and therefore have not been categorized in the fair value hierarchy.  The inclusion of such amounts in the above table is intended to aid reconciliation of investments categorized in the fair value hierarchy to total pension plan assets.  In 2019, we elected to apply the NAV practical expedient to the plan’s investments in non-exchange traded Real Estate Funds and, as such, have presented investments in Real Estate Funds that were previously categorized as Level 3 at December 31, 2018 totaling $61 million on a basis consistent with 2019.
Estimated Future Benefit Payments for Funded and Unfunded Pension Plans and Postretirement Medical Plan

Estimated future benefit payments by the funded and unfunded pension plans, and the postretirement medical plan, which reflect expected future service, are as follows (in millions):

2020

 

$

127

 

2021

 

 

126

 

2022

 

 

128

 

2023

 

 

130

 

2024

 

 

133

 

Years 2025 to 2029

 

 

674