Retirement Plans

9 Months Ended

Sep. 30, 2024

Retirement Benefits [Abstract]

Retirement Plans

9. Retirement Plans

Components of net periodic benefit cost (income) consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In millions)
Service cost	$	11	$	9	$	32	$	28
Interest cost (a)	25		25		71		75
Expected return on plan assets (a)	(41)		(39)		(117)		(118)
Amortization of unrecognized net actuarial losses (a)	2		—		3		1
Prior service cost (a)	35		—		35		—
Net periodic benefit cost (income)	$	32	$	(5)	$	24	$	(14)

(a)  These other components of net periodic benefit cost (income), are included in Other, net in the Statement of Consolidated Income, and total $21 million and $(8) million for the three and nine months ended September 30, 2024, compared with $(14) million and $(42) million for the three and nine months ended September 30, 2023.

In September 2024, the board of trustees for our U.K. pension plan purchased a bulk annuity policy from an insurer for £361 million covering all benefits payable under the plan. The bulk annuity policy is an asset of the plan. The plan retains responsibility for all liabilities associated with member and beneficiary benefits until such time a buy-out transaction is executed with the insurer. Concurrent with the purchase of the bulk annuity policy, the plan was amended to augment benefits for certain members and beneficiaries to equalize the minimum level of pension inflation protection.

Due to the amendments to our U.K. pension plan, the funded status of the plan was remeasured at September 30, 2024, resulting in a total decrease in the funded status of $77 million. The augmentation of benefits generated prior service cost of $35 million, which was recognized immediately in earnings as a component of net periodic benefit cost (income), and the remaining reduction in the funded status of $42 million was recognized as an actuarial loss in Other comprehensive income (loss) and primarily relates to the valuation of the benefit obligation using annuity pricing, and an update to the fair value of plan assets. At September 30, 2024, the funded status of the plan before any applicable taxes was $85 million, representing the excess of the fair value of plan assets over the benefit obligation.

Should a buy-out transaction be executed that settles the entirety of the plan’s benefit obligation, a settlement loss will be recorded to recognize all cumulative net actuarial losses within Accumulated other comprehensive income (loss) associated with the plan. At September 30, 2024, cumulative net actuarial losses associated with the U.K. pension plan were $219 million (pre-tax).