Retirement-Related Benefits

6 Months Ended

Jun. 30, 2022

Retirement-Related Benefits

Retirement-Related Benefits

18. Retirement-Related Benefits:

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

					Yr. to Yr.
(Dollars in millions)					Percent
For the three months ended June 30:	2022		2021		Change
Retirement-related plans — cost:
Defined benefit and contribution pension plans — cost	$	456	$	600	(24.0)	%
Nonpension postretirement plans — cost		33		44	(25.0)
Total	$	489	$	644	(24.1)	%

					Yr. to Yr.
(Dollars in millions)					Percent
For the six months ended June 30:	2022		2021		Change
Retirement-related plans — cost:
Defined benefit and contribution pension plans — cost	$	934	$	1,219	(23.4)	%
Nonpension postretirement plans — cost		66		88	(25.0)
Total	$	1,000	$	1,307	(23.5)	%

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

Cost/(Income) of Pension Plans

(Dollars in millions)	U.S. Plans				Non-U.S. Plans
For the three months ended June 30:	2022		2021		2022		2021
Service cost	$	—	$	—	$	59	$	68
Interest cost*		302		277		131		108
Expected return on plan assets*		(475)		(451)		(259)		(279)
Amortization of prior service costs/(credits)*		2		4		3		(5)
Recognized actuarial losses*		179		249		260		352
Curtailments and settlements*		—		—		11		16
Multi-employer plans		—		—		3		5
Other costs/(credits)*		—		—		6		3
Total net periodic pension (income)/cost of defined benefit plans	$	8	$	80	$	215	$	268
Cost of defined contribution plans		141		151		92		101
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$	149	$	231	$	307	$	369

(Dollars in millions)	U.S. Plans				Non-U.S. Plans
For the six months ended June 30:	2022		2021		2022		2021
Service cost	$	—	$	—	$	123	$	133
Interest cost*		603		555		270		216
Expected return on plan assets*		(950)		(901)		(532)		(559)
Amortization of prior service costs/(credits)*		4		8		7		(7)
Recognized actuarial losses*		359		498		537		708
Curtailments and settlements*		—		—		19		34
Multi-employer plans		—		—		7		11
Other costs/(credits)*		—		—		15		15
Total net periodic pension (income)/cost of defined benefit plans	$	15	$	160	$	446	$	551
Cost of defined contribution plans		282		302		190		206
Total defined benefit and contribution pension plans cost recognized in the Consolidated Income Statement	$	298	$	462	$	636	$	757

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

The following tables provide 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 June 30:	2022		2021		2022		2021
Service cost	$	1	$	2	$	1	$	1
Interest cost*		18		16		9		8
Expected return on plan assets*		—		—		(1)		(1)
Amortization of prior service costs/(credits)*		1		1		0		0
Recognized actuarial losses*		2		13		1		4
Curtailments and settlements*		—		—		—		0
Total nonpension postretirement plans cost recognized in the Consolidated Income Statement	$	23	$	32	$	10	$	13

(Dollars in millions)	U.S. Plan				Non-U.S. Plans
For the six months ended June 30:	2022		2021		2022		2021
Service cost	$	2	$	4	$	2	$	2
Interest cost*		37		32		18		16
Expected return on plan assets*		—		—		(1)		(2)
Amortization of prior service costs/(credits)*		2		2		0		0
Recognized actuarial losses*		4		26		2		8
Curtailments and settlements*		—		—		—		0
Total nonpension postretirement plans cost recognized in the Consolidated Income Statement	$	46	$	64	$	20	$	25

* 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 2022 from the amounts disclosed in the 2021 Annual Report.

The table below includes contributions to the following plans:

(Dollars in millions)	Plan Contributions
For the six months ended June 30:		2022	2021
U.S. and non-U.S. nonpension postretirement benefit plans	$	202	$	191
Non-U.S. DB and multi-employer plans*		43		42
Total plan contributions	$	245	$	233

* Amounts reported net of refunds.

During the six months ended June 30, 2022 and 2021, the company contributed $182 million and $235 million of U.S. Treasury Securities, respectively, to the non-U.S. DB plans and nonpension postretirement benefit plans. Additionally, during the six months ended June 30, 2022 and 2021, the company contributed $261 million and $249 million in U.S. Treasury securities, respectively, to the Active Medical Trust. Contributions made with U.S. Treasury securities are considered a non-cash transaction.