Retirement-Related Benefits

3 Months Ended

Mar. 31, 2021

Retirement-Related Benefits

Retirement-Related Benefits

17. Retirement-Related Benefits:

The company offers defined benefit pension plans, defined contribution pension plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. The following table provides the pre-tax cost for all retirement-related plans.

					Yr. to Yr.
(Dollars in millions)					Percent
For the three months ended March 31:	2021		2020		Change
Retirement-related plans — cost:
Defined benefit and contribution pension plans — cost	$	672	$	584	15.2	%
Nonpension postretirement plans — cost		44		52	(14.5)
Total	$	717	$	636	12.8	%

The following table provides the components of the cost/(income) for the company’s pension plans.

Cost/(Income) of Pension Plans

(Dollars in millions)	U.S. Plan				Non-U.S. Plans
For the three months ended March 31:	2021		2020		2021		2020
Service cost	$	—	$	—	$	92	$	95
Interest cost (1)		277		375		111		129
Expected return on plan assets (1)		(451)		(542)		(291)		(309)
Amortization of prior service costs/(credits) (1)		4		4		(2)		(5)
Recognized actuarial losses (1)		249		207		375		342
Curtailments and settlements (1)		—		—		17		8
Multi-employer plans		—		—		8		7
Other costs/(credits) (1)		—		—		11		5
Total net periodic pension (income)/cost of defined benefit plans	$	80	$	44	$	322	$	274
Cost of defined contribution plans		151		155		119		110
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$	231	$	199	$	441	$	385

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

The following table provides the components of the cost for the company’s nonpension postretirement plans.

Cost of Nonpension Postretirement Plans

(Dollars in millions)	U.S. Plan				Non-U.S. Plans
For the three months ended March 31:	2021		2020		2021		2020
Service cost	$	2	$	2	$	1	$	1
Interest cost (1)		16		26		8		10
Expected return on plan assets (1)		—		—		(1)		(1)
Amortization of prior service costs/(credits) (1)		1		1		0		0
Recognized actuarial losses (1)		13		7		4		6
Curtailments and settlements (1)		—		—		—		0
Total nonpension postretirement plans cost recognized in the Consolidated Income Statement	$	32	$	36	$	12	$	16

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

The company does not anticipate any significant changes to the expected plan contributions in 2021 from the amounts disclosed in the 2020 Annual Report.

The table below includes contributions to the following plans:

(Dollars in millions)	Plan Contributions
For the three months ended March 31:	2021		2020
U.S. nonpension postretirement benefit plan	$	106	$	136
Non-U.S. DB and multi-employer plans		66		82
Total plan contributions	$	172	$	217

During the three months ended March 31, 2021 and 2020, the company contributed $150 million and $185 million of U.S Treasury Securities, respectively, to the non-U.S. DB plans and nonpension postretirement benefit plans.

Additionally, during the three months ended March 31, 2021 and 2020, the company contributed $129 million and $70 million of U.S. Treasury Securities, respectively, to the Active Medical Trust. Contributions made with U.S. Treasury securities are considered a non-cash transaction.