Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2020

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 Pension Plans				Unfunded Pension Plan				Postretirement Medical Plan
	2020		2019		2020		2019		2020		2019

	(In millions)
Change in Benefit Obligation
Balance at January 1,	$	2,667	$	2,492	$	242	$	216	$	75	$	59
Service cost	37		33		13		11		3		2
Interest cost	68		82		5		7		1		2
Actuarial (gains) loss (a)	385		401		26		22		(8)		19
Single premium annuity contract payment	—		(249)		—		—		—		—
Benefit payments (b)	(93)		(113)		(17)		(14)		(6)		(7)



Foreign currency exchange rate changes	21		21		—		—		—		—
Balance at December 31, (c)	3,085		2,667		269		242		65		75
Change in Fair Value of Plan Assets
Balance at January 1,	$	2,732	$	2,568	$	—	$	—	$	—	$	—
Actual return on plan assets	378		462		—		—		—		—
Employer contributions	4		40		17		14		6		7
Single premium annuity contract payment	—		(249)		—		—		—		—
Benefit payments (b)	(93)		(113)		(17)		(14)		(6)		(7)
Foreign currency exchange rate changes	22		24		—		—		—		—
Balance at December 31,	3,043		2,732		—		—		—		—

Funded Status (Plan assets greater (less) than benefit obligations) at December 31,	$	(42)	$	65	$	(269)	$	(242)	$	(65)	$	(75)

Unrecognized Net Actuarial (Gains) Losses	$	900	$	756	$	86	$	65	$	(19)	$	(12)

(a)Changes in discount rates resulted in actuarial losses of $387 million in 2020 (2019: $465 million). Changes in mortality assumptions resulted in actuarial gains of $18 million in 2020 (2019: $13 million).

(b)Benefit payments include lump-sum settlement payments of $23 million in 2020 (2019: $27 million).

(c)At December 31, 2020, the accumulated benefit obligation for the funded and unfunded defined benefit pension plans was $2,993 million and $228 million, respectively (2019: $2,580 million and $194 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 Pension Plans				Unfunded Pension Plan				Postretirement Medical Plan
	2020		2019		2020		2019		2020		2019

	(In millions)
Noncurrent assets	$	45	$	71	$	—	$	—	$	—	$	—
Current liabilities	—		—		(49)		(32)		(7)		(8)
Noncurrent liabilities	(87)		(6)		(220)		(210)		(58)		(67)
Pension assets / (accrued benefit liability)	$	(42)	$	65	$	(269)	$	(242)	$	(65)	$	(75)

Accumulated other comprehensive loss, pre-tax (a)	$	900	$	756	$	86	$	65	$	(19)	$	(12)

(a)The after‑tax deficit reflected in Accumulated other comprehensive income (loss) was $759 million at December 31, 2020 (2019: $601 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
	2020		2019		2018		2020		2019		2018

	(In millions)
Service cost	$	50	$	44	$	42	$	3	$	2	$	2
Interest cost	73		89		91		1		2		3
Expected return on plan assets	(180)		(180)		(194)		—		—		—
Amortization of unrecognized net actuarial losses (gains)	48		52		39		(1)		(1)		(2)
Settlement loss	—		93		4		—		—		—
Curtailment gain	—		—		—		—		—		(2)

Net Periodic Benefit Cost / (Income) (a)	$	(9)	$	98	$	(18)	$	3	$	3	$	1

(a)Net non-service cost, which are included in Other, net in the Statement of Consolidated Income, were income of $59 million in 2020 (2019: $55 million of expense; 2018: $61 million of income).

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:


	2020	2019	2018
Benefit Obligations:
Discount rate	2.2%	2.9%	3.9%
Rate of compensation increase	3.8%	3.8%	3.8%

Net Periodic Benefit Cost:
Discount rate
Service cost	3.2%	3.9%	3.9%
Interest cost	2.6%	3.4%	3.3%
Expected return on plan assets	6.7%	7.1%	7.2%
Rate of compensation increase	3.8%	3.8%	4.5%

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


	2020	2019	2018
Discount rate	1.9%	2.8%	3.9%
Initial health care trend rate	6.0%	6.5%	6.9%
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

The following tables provide the fair value of the financial assets of the funded pension plans at December 31, 2020 and 2019 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 (c)		Total

	(In millions)
December 31, 2020
Cash and Short-Term Investment Funds	$	44	$	—	$	—	$	—	$	44
Equities:
U.S. equities (domestic)	585		—		—		164		749
International equities (non-U.S.)	94		43		—		352		489
Global equities (domestic and non-U.S.)	—		8		—		217		225
Fixed Income:
Treasury and government related (a)	—		350		—		49		399
Mortgage-backed securities (b)	—		116		—		70		186
Corporate	—		381		—		62		443
Other:
Hedge funds	—		—		—		73		73
Private equity funds	—		—		—		251		251
Real estate funds	23		—		—		161		184
Total investments	$	746	$	898	$	—	$	1,399	$	3,043
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 related (a)	—		372		—		56		428
Mortgage-backed securities (b)	—		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

(a)Includes securities issued and guaranteed by U.S. and non‑U.S. governments, and securities issued by governmental agencies and municipalities.

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

(c)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.

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):


2021	$	151
2022	134
2023	133
2024	137
2025	130
Years 2026 to 2030	687