Employee Benefits

6 Months Ended

Jun. 27, 2020

Retirement Benefits [Abstract]

Employee Benefits

Employee benefitsThe Company sponsors a number of U.S. and foreign pension plans as well as other nonpension postretirement and postemployment plans to provide various benefits for its employees. These plans are described within the footnotes to the Consolidated Financial Statements included in the Company’s 2019 Annual Report on Form 10-K. Components of Company plan benefit expense for the periods presented are included in the tables below.

Pension

	Quarter ended				Year-to-date period ended
(millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Service cost	$	9	$	9	$	18	$	18
Interest cost	33		44		68		89
Expected return on plan assets	(85)		(83)		(170)		(168)
Amortization of unrecognized prior service cost	2		2		4		4
Recognized net (gain) loss	43		10		57		11
Net periodic benefit cost	$	2	$	(18)	$	(23)	$	(46)
Curtailment (gain) loss	(7)		—		(7)		—
Total pension (income) expense	$	(5)	$	(18)	$	(30)	$	(46)

Other nonpension postretirement

	Quarter ended				Year-to-date period ended
(millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Service cost	$	4	$	4	$	7	$	7
Interest cost	8		10		16		20
Expected return on plan assets	(23)		(21)		(46)		(42)
Amortization of unrecognized prior service cost	(3)		(2)		(5)		(4)
Total postretirement benefit (income) expense	$	(14)	$	(9)	$	(28)	$	(19)

Postemployment

	Quarter ended				Year-to-date period ended
(millions)	June 27, 2020		June 29, 2019		June 27, 2020		June 29, 2019
Service cost	$	1	$	1	$	2	$	2
Interest cost	—		1		—		1
Recognized net (gain) loss	(1)		(1)		(2)		(2)
Total postemployment benefit expense	$	—	$	1	$	—	$	1

For the quarter and year-to-date periods ended June 27, 2020, the Company recognized a gain of $6 million and loss of $8 million, respectively, related to the remeasurement of a U.S. pension plan as current year distributions are expected to exceed service and interest costs resulting in settlement accounting for that particular plan. The amount of the remeasurement recognized was due primarily to changes in the discount rate relative to the previous measurement.

During the second quarter of 2020, the Company recognized a curtailment gain of $7 million, as certain U.S. pension plan benefits were frozen for a portion of the population. The Company remeasured the benefit obligation for the impacted pension plan, resulting in a mark-to-market loss of $49 million. The loss was due primarily to a lower discount rate partially offset by plan asset returns in excess of the expected rate of return.

For the quarter and year-to-date periods ended June 29, 2019, the Company recognized a loss of $10 million and $11 million, respectively, related to the remeasurement of a U.S. pension plan as current year distributions were expected to exceed service and interest costs, resulting in settlement accounting for that particular plan. The amount of the remeasurement loss recognized was due primarily to an unfavorable change in the discount rate.

Company contributions to employee benefit plans are summarized as follows:

(millions)	Pension		Nonpension postretirement		Total
Quarter ended:
June 27, 2020	$	—	$	6	$	6
June 29, 2019	$	3	$	4	$	7
Year-to-date period ended:
June 27, 2020	$	3	$	9	$	12
June 29, 2019	$	4	$	8	$	12
Full year:
Fiscal year 2020 (projected)	$	7	$	19	$	26
Fiscal year 2019 (actual)	$	10	$	18	$	28

Plan funding strategies may be modified in response to management's evaluation of tax deductibility, market conditions, and competing investment alternatives.

Multi-employer pension plan exit liability

During the second quarter of 2020, the Company adjusted the estimated withdrawal liability associated with a plan withdrawn from during the third quarter of 2019. The adjustment resulted in a gain of $5 million during the second quarter and resulted from a July 2020 agreement with the plan under which the Company paid $7 million in full settlement of the withdrawal liability.