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Retirement-Related Benefits (Tables)

12 Months Ended

Dec. 31, 2020

Pre-tax cost for all retirement-related plans


($ in millions)
	U.S. Plans						Non-U.S. Plans						Total
For the year ended December 31:	2020		2019		2018		2020		2019		2018		2020		2019		2018
Defined benefit pension plans	$	167	$	(153)	$	542	$	1,178	$	955	$	1,284	$	1,345	$	803	$	1,827
Retention Plan		11		11		17		—		—		—		11		11		17
Total defined benefit pension plans (income)/cost	$	178	$	(142)	$	559	$	1,178	$	955	$	1,284	$	1,355	$	813	$	1,843
IBM 401(k) Plus Plan and non-U.S. plans	$	585	$	588	$	588	$	447	$	427	$	412	$	1,032	$	1,015	$	1,000
Excess 401(k)		27		26		24		—		—		—		27		26		24
Total defined contribution plans cost	$	612	$	613	$	612	$	447	$	427	$	412	$	1,058	$	1,040	$	1,024
Nonpension postretirement benefit plans cost	$	145	$	154	$	147	$	58	$	65	$	51	$	203	$	219	$	198
Total retirement-related benefits net periodic cost	$	934	$	624	$	1,319	$	1,683	$	1,448	$	1,747	$	2,617	$	2,072	$	3,066

Summary of the total PBO for defined benefit plans, APBO for nonpension postretirement benefit plans, fair value of plan assets and associated funded status


($ in millions)
	Benefit Obligations				Fair Value of Plan Assets				Funded Status*
At December 31:	2020		2019		2020		2019		2020		2019
U.S. Plans
Overfunded plans
Qualified PPP	$	50,375	$	48,471	$	54,386	$	51,784	$	4,011	$	3,313
Underfunded plans
Excess PPP	$	1,556	$	1,473	$	—	$	—	$	(1,556)	$	(1,473)
Retention Plan		306		288		—		—		(306)		(288)
Nonpension postretirement benefit plan		3,791		3,857		15		3		(3,776)		(3,854)
Total underfunded U.S. plans	$	5,653	$	5,618	$	15	$	3	$	(5,638)	$	(5,615)
Non-U.S. Plans
Overfunded plans
Qualified defined benefit pension plans**	$	20,649	$	18,371	$	24,246	$	21,921	$	3,597	$	3,550
Nonpension postretirement benefit plans		21		19		22		21		1		2
Total overfunded non-U.S. plans	$	20,670	$	18,390	$	24,269	$	21,942	$	3,599	$	3,552
Underfunded plans
Qualified defined benefit pension plans**	$	25,160	$	23,222	$	19,586	$	18,398	$	(5,574)	$	(4,824)
Nonqualified defined benefit pension plans		7,180		6,731		—		—		(7,180)		(6,731)
Nonpension postretirement benefit plans		755		828		31		44		(723)		(785)
Total underfunded non-U.S. plans	$	33,095	$	30,782	$	19,617	$	18,442	$	(13,478)	$	(12,340)
Total overfunded plans	$	71,044	$	66,861	$	78,654	$	73,726	$	7,610	$	6,865
Total underfunded plans	$	38,747	$	36,399	$	19,632	$	18,445	$	(19,116)	$	(17,955)

*	Funded status is recognized in the Consolidated Balance Statement as follows: Asset amounts as prepaid pension assets; (Liability) amounts as compensation and benefits (current liability) and retirement and nonpension postretirement benefit obligations (noncurrent liability).

**	Non-U.S. qualified plans represent plans funded outside of the U.S. Non-U.S. nonqualified plans are unfunded.

Components of net periodic (income)/cost of the company's retirement-related benefit plans


($ in millions)
	Defined Benefit Pension Plans
	U.S. Plans						Non-U.S. Plans
For the year ended December 31:	2020		2019		2018		2020		2019		2018
Service cost	$	—	$	—	$	—	$	392	$	370	$	413
Interest cost⁽¹⁾		1,501		1,882		1,719		563		847		830
Expected return on plan assets⁽¹⁾		(2,169)		(2,599)		(2,701)		(1,275)		(1,588)		(1,342)
Amortization of transition assets⁽¹⁾		—		—		—		—		0		0
Amortization of prior service costs/(credits)⁽¹⁾		16		16		16		(8)		(23)		(83)
Recognized actuarial losses⁽¹⁾		829		559		1,525		1,406		1,249		1,401
Curtailments and settlements⁽¹⁾		—		—		—		52		41		11
Multi-employer plans		—		—		—		29		32		38
Other costs/(credits)		—		—		—		18		28		16
Total net periodic (income)/cost	$	178	$	(142)	$	559	$	1,178	$	955	$	1,284


($ in millions)
	Nonpension Postretirement Benefit Plans
	U.S. Plan						Non-U.S. Plans
For the year ended December 31:	2020		2019		2018		2020		2019		2018
Service cost	$	9	$	10	$	13	$	5	$	5	$	5
Interest cost⁽¹⁾		103		145		132		36		55		45
Expected return on plan assets⁽¹⁾		—		—		0		(4)		(5)		(6)
Amortization of transition assets⁽¹⁾		—		—		—		0		—		0
Amortization of prior service costs/(credits)⁽¹⁾		4		(2)		(7)		0		0		0
Recognized actuarial losses⁽¹⁾		29		1		10		21		10		6
Curtailments and settlements⁽¹⁾		—		—		—		0		0		0
Other costs/(credits)		—		—		—		0		—		—
Total net periodic cost	$	145	$	154	$	147	$	58	$	65	$	51

(1)	These components of net periodic pension costs are included in other (income) and expense in the Consolidated Income Statement.

Changes in benefit obligations


($ in millions)
	Defined Benefit Pension Plans								Nonpension Postretirement Benefit Plans
	U.S. Plans				Non-U.S. Plans				U.S. Plan				Non-U.S. Plans
	2020		2019		2020		2019		2020		2019		2020		2019
Change in benefit obligation
Benefit obligation at January 1	$	50,232	$	47,812	$	48,324	$	45,770	$	3,857	$	3,912	$	848	$	705
Service cost		—		—		392		370		9		10		5		5
Interest cost		1,501		1,882		563		847		103		145		36		55
Plan participants' contributions		—		—		23		23		56		57		—		—
Acquisitions/divestitures, net		1		—		50		(32)		—		—		0		0
Actuarial losses/(gains)		4,071		4,040		2,766		3,467		135		148		(3)		141
Benefits paid from trust		(3,445)		(3,378)		(1,946)		(1,902)		(369)		(389)		(4)		(6)
Direct benefit payments		(123)		(124)		(420)		(403)		0		(6)		(24)		(27)
Foreign exchange impact		—		—		3,283		134		—		—		(82)		(1)
Amendments/curtailments/ settlements/other		0		—		(47)		50		—		(21)		(1)		(23)
Benefit obligation at December 31	$	52,237	$	50,232	$	52,989	$	48,324	$	3,791	$	3,857	$	775	$	848
Change in plan assets
Fair value of plan assets at January 1	$	51,784	$	48,213	$	40,319	$	36,758	$	3	$	29	$	65	$	65
Actual return on plan assets		6,046		6,949		2,571		4,896		0		1		4		7
Employer contributions		—		—		182		243		325		304		—		—
Acquisitions/divestitures, net		1		—		97		(25)		—		—		—		—
Plan participants' contributions		—		—		23		23		56		57		—		—
Benefits paid from trust		(3,445)		(3,378)		(1,946)		(1,902)		(369)		(389)		(4)		(6)
Foreign exchange impact		—		—		2,599		333		—		—		(10)		(1)
Amendments/curtailments/ settlements/other		—		—		(13)		(7)		0		—		0		0
Fair value of plan assets at December 31	$	54,386	$	51,784	$	43,832	$	40,319	$	15	$	3	$	53	$	65
Funded status at December 31	$	2,149	$	1,551	$	(9,157)	$	(8,005)	$	(3,776)	$	(3,854)	$	(722)	$	(783)
Accumulated benefit obligation*	$	52,237	$	50,232	$	52,513	$	47,645		N/A		N/A		N/A		N/A

* Represents the benefit obligation assuming no future participant compensation increases.

N/A–Not applicable

Changes in plan assets


($ in millions)
	Defined Benefit Pension Plans								Nonpension Postretirement Benefit Plans
	U.S. Plans				Non-U.S. Plans				U.S. Plan				Non-U.S. Plans
	2020		2019		2020		2019		2020		2019		2020		2019
Change in benefit obligation
Benefit obligation at January 1	$	50,232	$	47,812	$	48,324	$	45,770	$	3,857	$	3,912	$	848	$	705
Service cost		—		—		392		370		9		10		5		5
Interest cost		1,501		1,882		563		847		103		145		36		55
Plan participants' contributions		—		—		23		23		56		57		—		—
Acquisitions/divestitures, net		1		—		50		(32)		—		—		0		0
Actuarial losses/(gains)		4,071		4,040		2,766		3,467		135		148		(3)		141
Benefits paid from trust		(3,445)		(3,378)		(1,946)		(1,902)		(369)		(389)		(4)		(6)
Direct benefit payments		(123)		(124)		(420)		(403)		0		(6)		(24)		(27)
Foreign exchange impact		—		—		3,283		134		—		—		(82)		(1)
Amendments/curtailments/ settlements/other		0		—		(47)		50		—		(21)		(1)		(23)
Benefit obligation at December 31	$	52,237	$	50,232	$	52,989	$	48,324	$	3,791	$	3,857	$	775	$	848
Change in plan assets
Fair value of plan assets at January 1	$	51,784	$	48,213	$	40,319	$	36,758	$	3	$	29	$	65	$	65
Actual return on plan assets		6,046		6,949		2,571		4,896		0		1		4		7
Employer contributions		—		—		182		243		325		304		—		—
Acquisitions/divestitures, net		1		—		97		(25)		—		—		—		—
Plan participants' contributions		—		—		23		23		56		57		—		—
Benefits paid from trust		(3,445)		(3,378)		(1,946)		(1,902)		(369)		(389)		(4)		(6)
Foreign exchange impact		—		—		2,599		333		—		—		(10)		(1)
Amendments/curtailments/ settlements/other		—		—		(13)		(7)		0		—		0		0
Fair value of plan assets at December 31	$	54,386	$	51,784	$	43,832	$	40,319	$	15	$	3	$	53	$	65
Funded status at December 31	$	2,149	$	1,551	$	(9,157)	$	(8,005)	$	(3,776)	$	(3,854)	$	(722)	$	(783)
Accumulated benefit obligation*	$	52,237	$	50,232	$	52,513	$	47,645		N/A		N/A		N/A		N/A

* Represents the benefit obligation assuming no future participant compensation increases.

N/A–Not applicable

Accumulated benefit obligation


($ in millions)
	Defined Benefit Pension Plans								Nonpension Postretirement Benefit Plans
	U.S. Plans				Non-U.S. Plans				U.S. Plan				Non-U.S. Plans
	2020		2019		2020		2019		2020		2019		2020		2019
Change in benefit obligation
Benefit obligation at January 1	$	50,232	$	47,812	$	48,324	$	45,770	$	3,857	$	3,912	$	848	$	705
Service cost		—		—		392		370		9		10		5		5
Interest cost		1,501		1,882		563		847		103		145		36		55
Plan participants' contributions		—		—		23		23		56		57		—		—
Acquisitions/divestitures, net		1		—		50		(32)		—		—		0		0
Actuarial losses/(gains)		4,071		4,040		2,766		3,467		135		148		(3)		141
Benefits paid from trust		(3,445)		(3,378)		(1,946)		(1,902)		(369)		(389)		(4)		(6)
Direct benefit payments		(123)		(124)		(420)		(403)		0		(6)		(24)		(27)
Foreign exchange impact		—		—		3,283		134		—		—		(82)		(1)
Amendments/curtailments/ settlements/other		0		—		(47)		50		—		(21)		(1)		(23)
Benefit obligation at December 31	$	52,237	$	50,232	$	52,989	$	48,324	$	3,791	$	3,857	$	775	$	848
Change in plan assets
Fair value of plan assets at January 1	$	51,784	$	48,213	$	40,319	$	36,758	$	3	$	29	$	65	$	65
Actual return on plan assets		6,046		6,949		2,571		4,896		0		1		4		7
Employer contributions		—		—		182		243		325		304		—		—
Acquisitions/divestitures, net		1		—		97		(25)		—		—		—		—
Plan participants' contributions		—		—		23		23		56		57		—		—
Benefits paid from trust		(3,445)		(3,378)		(1,946)		(1,902)		(369)		(389)		(4)		(6)
Foreign exchange impact		—		—		2,599		333		—		—		(10)		(1)
Amendments/curtailments/ settlements/other		—		—		(13)		(7)		0		—		0		0
Fair value of plan assets at December 31	$	54,386	$	51,784	$	43,832	$	40,319	$	15	$	3	$	53	$	65
Funded status at December 31	$	2,149	$	1,551	$	(9,157)	$	(8,005)	$	(3,776)	$	(3,854)	$	(722)	$	(783)
Accumulated benefit obligation*	$	52,237	$	50,232	$	52,513	$	47,645		N/A		N/A		N/A		N/A

* Represents the benefit obligation assuming no future participant compensation increases.

N/A–Not applicable

Net funded status


($ in millions)
	Defined Benefit Pension Plans								Nonpension Postretirement Benefit Plans
	U.S. Plans				Non-U.S. Plans				U.S. Plan				Non-U.S. Plans
At December 31:	2020		2019		2020		2019		2020		2019		2020		2019
Prepaid pension assets	$	4,011	$	3,313	$	3,597	$	3,550	$	0	$	0	$	1	$	2
Current liabilities—compensation and benefits		(122)		(120)		(366)		(313)		(346)		(346)		(34)		(33)
Noncurrent liabilities—retirement and nonpension postretirement benefit obligations		(1,740)		(1,641)		(12,388)		(11,242)		(3,430)		(3,507)		(690)		(752)
Funded status—net	$	2,149	$	1,551	$	(9,157)	$	(8,005)	$	(3,776)	$	(3,854)	$	(722)	$	(783)

Pre-tax net loss and prior service costs/(credits) and transition (assets)/liabilities recognized in OCI and changes in pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI


($ in millions)
	Defined Benefit Pension Plans								Nonpension Postretirement Benefit Plans
	U.S. Plans				Non-U.S. Plans				U.S. Plan				Non-U.S. Plans
	2020		2019		2020		2019		2020		2019		2020		2019
Net loss at January 1	$	16,608	$	17,476	$	17,272	$	18,452	$	551	$	405	$	287	$	172
Current period loss/(gain)		194		(309)		1,338		109		135		147		(2)		125
Curtailments and settlements		—		—		(52)		(41)		—		—		0		0
Amortization of net loss included in net periodic (income)/cost		(829)		(559)		(1,406)		(1,249)		(29)		(1)		(21)		(10)
Net loss at December 31	$	15,972	$	16,608	$	17,151	$	17,272	$	656	$	551	$	264	$	287
Prior service costs/(credits) at January 1	$	41	$	57	$	297	$	172	$	34	$	52	$	(4)	$	4
Current period prior service costs/(credits)		—		—		37		102		—		(21)		—		(8)
Curtailments, settlements and other		—		—		0		—		—		—		—		—
Amortization of prior service (costs)/credits included in net periodic (income)/cost		(16)		(16)		8		23		(4)		2		0		0
Prior service costs/(credits) at December 31	$	24	$	41	$	342	$	297	$	30	$	34	$	(4)	$	(4)
Transition (assets)/liabilities at January 1	$	—	$	—	$	0	$	0	$	—	$	—	$	0	$	0
Amortization of transition assets/(liabilities) included in net periodic (income)/cost		—		—		0		0		—		—		0		—
Transition (assets)/liabilities at December 31	$	—	$	—	$	0	$	0	$	—	$	—	$	0	$	0
Total loss recognized in accumulated other comprehensive income/(loss)*	$	15,997	$	16,648	$	17,493	$	17,569	$	687	$	585	$	260	$	283

* Refer to note S, “Equity Activity,” for the total change in AOCI, and the Consolidated Statement of Comprehensive Income for the components of net periodic (income)/cost, including the related tax effects, recognized in OCI for the retirement-related benefit plans.

On October 26, 2018, the High Court in London in the case of Lloyds Pension Group Trustees Limited v Lloyds Bank PLC, confirmed that the UK defined benefit pension plans are required to equalize pension benefits to take into account unequal guaranteed minimum pension benefits accrued during the period 1990-1997. As a result of this court decision, IBM recorded an increase of $125 million to the PBO for the IBM UK defined benefit plan, which represents approximately 1 percent of the UK PBO. This amount was recorded as prior service cost in OCI for the year ended December 31, 2018. In 2020, the High Court issued a follow on judgment to the 2018 ruling which did not have a material impact to the PBO as of December 31, 2020.

Assumptions used to measure the net periodic (income)/cost and year-end benefit obligations



	Defined Benefit Pension Plans
	U.S. Plans						Non-U.S. Plans
	2020		2019		2018		2020		2019		2018
Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31
Discount rate	3.10	%	4.10	%	3.40	%	1.19	%	1.85	%	1.76	%
Expected long-term returns on plan assets	4.50	%	5.25	%	5.25	%	3.37	%	4.38	%	3.62	%
Rate of compensation increase	N/A		N/A		N/A		2.60	%	2.18	%	2.41	%
Interest crediting rate	2.70	%	3.60	%	2.30	%	0.28	%	0.30	%	0.30	%
Weighted-average assumptions used to measure benefit obligations at December 31
Discount rate	2.20	%	3.10	%	4.10	%	0.86	%	1.19	%	1.85	%
Rate of compensation increase	N/A		N/A		N/A		2.50	%	2.60	%	2.18	%
Interest crediting rate	1.10	%	2.70	%	3.60	%	0.26	%	0.28	%	0.30	%

N/A–Not applicable



	Nonpension Postretirement Benefit Plans
	U.S. Plan						Non-U.S. Plans
	2020		2019		2018		2020		2019		2018
Weighted-average assumptions used to measure net periodic cost for the year ended December 31
Discount rate	2.80	%	3.90	%	3.30	%	4.98	%	7.48	%	7.28	%
Expected long-term returns on plan assets	N/A		N/A		N/A		7.51	%	8.64	%	8.91	%
Interest crediting rate	2.70	%	3.60	%	2.30	%	N/A		N/A		N/A
Weighted-average assumptions used to measure benefit obligations at December 31
Discount rate	1.80	%	2.80	%	3.90	%	4.46	%	4.98	%	7.48	%
Interest crediting rate	1.10	%	2.70	%	3.60	%	N/A		N/A		N/A

N/A–Not applicable

Defined benefit pension plans' asset classes and their associated fair value

The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2020. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries.


($ in millions)
	U.S. Plan								Non-U.S. Plans
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity
Equity securities⁽¹⁾	$	2,714	$	0	$	—	$	2,714	$	474	$	0	$	—	$	474
Equity mutual funds⁽²⁾		105		—		—		105		0		—		—		0
Fixed income
Government and related⁽³⁾		—		21,375		—		21,375		—		9,760		2		9,762
Corporate bonds⁽⁴⁾		—		18,217		542		18,759		—		3,725		—		3,725
Mortgage and asset-backed securities		—		612		—		612		—		3		—		3
Fixed income mutual funds⁽⁵⁾		470		—		—		470		—		—		—		—
Insurance contracts⁽⁶⁾		—		—		—		—		—		6,675		—		6,675
Cash and short-term investments⁽⁷⁾		76		1,001		—		1,077		352		651		—		1,002
Real estate		—		—		—		—		—		—		298		298
Derivatives⁽⁸⁾		(3)		18		—		15		69		521		—		590
Other mutual funds⁽⁹⁾		—		—		—		—		29		—		—		29
Subtotal		3,363		41,222		542		45,128		923		21,335		300		22,559
Investments measured at net asset value using the NAV practical expedient⁽¹⁰⁾		—		—		—		9,579		—		—		—		21,313
Other⁽¹¹⁾		—		—		—		(321)		—		—		—		(39)
Fair value of plan assets	$	3,363	$	41,222	$	542	$	54,386	$	923	$	21,335	$	300	$	43,832

(1)Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $6 million, representing 0.010 percent of the U.S. Plan assets. Non-U.S. Plans include IBM common stock of $1 million, representing 0.003 percent of the non-U.S. Plans assets.

(2)Invests in predominantly equity securities.

(3)Includes debt issued by national, state and local governments and agencies.

(4)Non-U.S. Plans include IBM corporate bonds of $5 million representing 0.012 percent of the non-U.S. Plans assets.

(5)Invests predominantly in fixed income securities.

(6) Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans.

(7)Includes cash, cash equivalents and short-term marketable securities.

(8)Includes interest rate derivatives, forwards, exchange traded and other over-the-counter derivatives.

(9)Invests in both equity and fixed-income securities.

(10)Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships.

(11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.

The U.S. nonpension postretirement benefit plan assets of $15 million were invested primarily in cash equivalents, categorized as Level 1 in the fair value hierarchy. The non-U.S. nonpension postretirement benefit plan assets of $53 million, primarily in Brazil, and, to a lesser extent, in Mexico and South Africa, were invested primarily in government and related fixed-income securities and corporate bonds, categorized as Level 2 in the fair value hierarchy.

The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2019. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries.


($ in millions)
	U.S. Plan								Non-U.S. Plans
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity
Equity securities⁽¹⁾	$	1,943	$	—	$	—	$	1,943	$	2,209	$	0	$	—	$	2,209
Equity mutual funds⁽²⁾		85		—		—		85		—		—		—		—
Fixed income
Government and related⁽³⁾		—		21,134		—		21,134		—		10,288		2		10,290
Corporate bonds⁽⁴⁾		—		16,666		518		17,185		—		2,124		—		2,124
Mortgage and asset-backed securities		—		630		—		630		—		19		—		19
Fixed income mutual funds⁽⁵⁾		386		—		—		386		—		—		—		—
Insurance contracts		—		—		—		—		—		1,862		—		1,862
Cash and short-term investments⁽⁶⁾		54		848		—		903		204		644		—		849
Real estate		—		—		—		—		—		—		328		328
Derivatives⁽⁷⁾		0		6		—		6		18		969		—		987
Other mutual funds⁽⁸⁾		—		—		—		—		25		0		—		25
Subtotal		2,469		39,284		518		42,271		2,456		15,907		330		18,693
Investments measured at net asset value using the NAV practical expedient⁽⁹⁾		—		—		—		9,519		—		—		—		21,653
Other⁽¹⁰⁾		—		—		—		(6)		—		—		—		(26)
Fair value of plan assets	$	2,469	$	39,284	$	518	$	51,784	$	2,456	$	15,907	$	330	$	40,319

(1)Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $2 million, representing 0.004 percent of the U.S. Plan assets. Non-U.S. Plans include IBM common stock of $10 million, representing 0.02 percent of the non-U.S. Plans assets.

(2)Invests in predominantly equity securities.

(3)Includes debt issued by national, state and local governments and agencies.

(4)The U.S. Plan includes IBM corporate bonds of $37 million, representing 0.07 percent of the U.S. Plan assets. Non-U.S. Plans include IBM corporate bonds of $8 million representing 0.02 percent of the non-U.S. Plans assets.

(5)Invests in predominantly fixed-income securities.

(6)Includes cash and cash equivalents and short-term marketable securities.

(7)Includes interest rate derivatives, forwards, exchange traded and other over-the-counter derivatives.

(8)Invests in both equity and fixed-income securities.

(9)Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships.

(10) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.

Reconciliation of the beginning and ending balances of Level 3 assets

The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended December 31, 2020 and 2019 for the U.S. Plan.


($ in millions)
	Total		*
Balance at January 1, 2020	$	518
Return on assets held at end of year		29
Return on assets sold during the year		0
Purchases, sales and settlements, net		(5)
Transfers, net		0
Balance at December 31, 2020	$	542

* Corporate bonds.


($ in millions)
			Mortgage and
	Corporate		Asset-Backed
	Bonds		Securities		Total
Balance at January 1, 2019	$	359	$	4	$	363
Return on assets held at end of year		40		—		40
Return on assets sold during the year		1		0		1
Purchases, sales and settlements, net		105		0		105
Transfers, net		13		(4)		9
Balance at December 31, 2019	$	518	$	—	$	518

The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended December 31, 2020 and 2019 for the non-U.S. Plans.


($ in millions)
	Government		Private
	and Related		Real Estate		Total
Balance at January 1, 2020	$	2	$	328	$	330
Return on assets held at end of year		0		(29)		(29)
Return on assets sold during the year		—		2		2
Purchases, sales and settlements, net		—		(14)		(14)
Transfers, net		—		4		4
Foreign exchange impact		0		7		7
Balance at December 31, 2020	$	2	$	298	$	300


($ in millions)
	Government		Private
	and Related		Real Estate		Total
Balance at January 1, 2019	$	2	$	339	$	341
Return on assets held at end of year		0		(11)		(11)
Return on assets sold during the year		0		4		4
Purchases, sales and settlements, net		(1)		(17)		(18)
Transfers, net		—		—		—
Foreign exchange impact		0		13		13
Balance at December 31, 2019	$	2	$	328	$	330

Schedule of contributions and direct benefit payments


($ in millions)
For the years ended December 31:	2020		2019
Non-U.S. DB plans	$	182	$	243
Nonpension postretirement benefit plans		325		304
Multi-employer plans		29		32
DC plans		1,058		1,040
Direct benefit payments		567		559
Total	$	2,161	$	2,177

Total expected benefit payments


($ in millions)
	Qualified		Nonqualified		Qualified		Nonqualified		Total Expected
	U.S. Plan		U.S. Plans		Non-U.S. Plans		Non-U.S. Plans		Benefit
	Payments		Payments		Payments		Payments		Payments
2021	$	3,522	$	123	$	2,093	$	364	$	6,102
2022		3,490		122		2,124		354		6,091
2023		3,451		121		2,140		361		6,073
2024		3,393		120		2,160		368		6,040
2025		3,333		118		2,189		373		6,012
2026-2030		15,062		545		10,529		1,943		28,078


($ in millions)
			Qualified		Nonqualified		Total Expected
	U.S. Plan		Non-U.S. Plans		Non-U.S. Plans		Benefit
	Payments		Payments		Payments		Payments
2021	$	364	$	16	$	25	$	405
2022		377		17		26		419
2023		380		18		25		423
2024		363		19		26		408
2025		339		20		25		385
2026-2030		1,296		119		123		1,538

Defined benefit pension plans with accumulated benefit obligations (ABO) in excess of plan assets


($ in millions)
	2020				2019
	Benefit		Plan		Benefit		Plan
At December 31:	Obligation		Assets		Obligation		Assets
Plans with PBO in excess of plan assets	$	34,202	$	19,586	$	31,714	$	18,398
Plans with ABO in excess of plan assets		33,051		18,956		30,882		18,127
Plans with plan assets in excess of PBO		71,024		78,632		66,842		73,705

Schedule of nonpension postretirement benefit plan with APBO in excess of plan assets


($ in millions)
	2020				2019
	Benefit		Plan		Benefit		Plan
At December 31:	Obligation		Assets		Obligation		Assets
Plans with APBO in excess of plan assets	$	4,545	$	45	$	4,685	$	47
Plans with plan assets in excess of APBO		21		22		19		21