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Benefit Plans
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Benefit Plans Benefit Plans
Pension Plans – Several non-contributory defined benefit plans are maintained for eligible employees. For benefits in certain plans, the accrued pension balance is credited with interest based on specified annual interest rates (which are established annually for all participants). The benefits for another plan which covers salaried employees are based on formulas which include, among others, years of service and average pay. The Company’s funding policy is to make contributions in accordance with applicable governmental regulatory requirements.

Other Postretirement Benefit Plans – Several postretirement benefit plans cover eligible employees and retirees. Participants generally become eligible after reaching age 55 with required years of service. Actual requirements for coverage vary by plan. Benefits for retirees who were covered by bargaining agreements vary by each unit and contract. Benefits for certain retirees are in the form of a health care account.

Benefits for retirees reaching age 65 are generally integrated with Medicare. Other retirees, based on plan provisions, must use Medicare as their primary coverage, with a portion of the unpaid amount being reimbursed by the employer; or are reimbursed for the Medicare Part B premium or have no Company coverage. The benefits provided are basically health and, for certain retirees, life insurance type benefits.

Certain of these benefit plans are funded and postretirement benefits are accrued during the active service of those employees who would become eligible for such benefits when they retire. December 31 is used as the measurement date for the plans.
Weighted average assumptions used to determine benefit obligations:

Pension BenefitsOther Postretirement Benefits
December 31202120202019202120202019
       
Discount rate2.6 %2.1 %3.0 %2.6 %2.2 %3.0 %
Interest crediting rate3.0 %3.0 %3.7 %  
Rate of compensation increase
0.0% to 3.0%
0.0% to 3.0%
3.0% to 5.5%
   

Weighted average assumptions used to determine net periodic benefit cost:

Pension BenefitsOther Postretirement Benefits
Year Ended December 31
202120202019202120202019
       
Discount rate2.1 %3.0 %4.0 %2.2 %2.9 %4.0 %
Expected long term rate of return on plan assets6.7 %7.2 %7.5 %2.8 %3.6 %3.6 %
Interest crediting rate3.0 %3.7 %3.7 %   
Rate of compensation increase
0.0% to 3.0%
0.0% to 3.0%
3.0% to 5.5%
   

In determining the discount rate assumption, current market and liability information is utilized, including a discounted cash flow analysis of the pension and postretirement obligations. In particular, the basis for the discount rate selection was the yield on indices of highly rated fixed income debt securities with durations comparable to that of plan liabilities. The yield curve was applied to expected future retirement plan payments to adjust the discount rate to reflect the cash flow characteristics of the plans. The yield curves and indices evaluated in the selection of the discount rate are comprised of high quality corporate bonds that are rated AA by an accepted rating agency.

The expected long term rate of return for plan assets is determined based on widely-accepted capital market principles, long term return analysis for global fixed income and equity markets as well as the active total return oriented portfolio management style. Long term trends are evaluated relative to market factors such as inflation, interest rates and fiscal and monetary policies, in order to assess the capital market assumptions as applied to the plan. Consideration of diversification needs and rebalancing is maintained.

Assumed health care cost trend rates:

December 31202120202019
    
Health care cost trend rate assumed for next year
4.0% to 7.0%
4.0% to 7.5%
4.0% to 8.0%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
4.0% to 5.0%
4.0% to 5.0%
4.0% to 5.0%
Year that the rate reaches the ultimate trend rate
2022-2026
2021-2026
2021-2026
Net periodic (benefit) cost components:

Pension Benefits
Other Postretirement Benefits
Year Ended December 31
202120202019202120202019
(In millions)      
       
Service cost$3 $3 $7 
Interest cost70 92 117 $1 $2 $2 
Expected return on plan assets(169)(173)(159)(3)(3)(3)
Amortization of unrecognized net loss49 48 45 (1)(1)
Settlements and curtailments3 10 1 (1)
Regulatory asset decrease3 
Net periodic (benefit) cost$(41)$(20)$11 $(2)$(3)$(2)

The following provides a reconciliation of benefit obligations and plan assets:

Pension Benefits
Other Postretirement Benefits
 2021202020212020
(In millions)    
     
Change in benefit obligation:    
     
Benefit obligation at January 1$3,243 $3,137 $51 $52 
Deconsolidation(98)
Service cost3 3 
Interest cost70 92 1 2 
Plan participants’ contributions4 4 
Actuarial (gain) loss(89)236 (2)3 
Benefits paid from plan assets(193)(189)(10)(10)
Settlements and curtailments(19)(40)
Foreign exchange(1)4 
Benefit obligation at December 31
$2,916 $3,243 $44 $51 
Change in plan assets:
Fair value of plan assets at January 1$2,739 $2,576 $96 $90 
Deconsolidation(85)
Actual return on plan assets355 327 8 
Company contributions20 61 3 4 
Plan participants' contributions4 4 
Benefits paid from plan assets(193)(189)(10)(10)
Settlements(19)(40)
Foreign exchange(1)4 
Fair value of plan assets at December 31
$2,816 $2,739 $93 $96 
Funded status$(100)$(504)$49 $45 
Pension Benefits
Other Postretirement Benefits
 2021202020212020
(In millions)    
     
Amounts recognized in the Consolidated Balance Sheets consist of:    
     
Other assets$90 $4 $62 $61 
Other liabilities(190)(508)(13)(16)
Net amount recognized$(100)$(504)$49 $45 
Amounts recognized in Accumulated other comprehensive income (loss), not yet recognized in net periodic (benefit) cost:
Net actuarial loss$837 $1,169 $(5)$(5)
Net amount recognized$837 $1,169 $(5)$(5)
Information for plans with projected and accumulated benefit obligations in excess of plan assets: (a)
Projected benefit obligation$292 $3,103 
Accumulated benefit obligation286 3,096 $13 $16 
Fair value of plan assets104 2,596 

(a)Changes in the values in the table above are due to a plan’s assets exceeding the obligation in 2021.

The benefit obligation for all defined benefit pension plans was $2.9 billion and $3.2 billion at December 31, 2021 and 2020. Changes for the years ended December 31, 2021 and 2020 include actuarial gains of $89 million and actuarial losses of $236 million primarily driven by changes in the discount rate used to determine the benefit obligations.

A total return approach is employed whereby a mix of equity, limited partnerships and fixed maturity securities are used to maximize the long term return of plan assets for a prudent level of risk and to manage cash flows according to plan requirements. The target allocation of plan assets is 40% to 60% invested in equity securities and limited partnerships, with the remainder primarily invested in fixed maturity securities. The intent of this strategy is to minimize expenses by generating investment returns that exceed the growth of the plan liabilities over the long run. Risk tolerance is established after careful consideration of the plan liabilities, plan funded status and corporate financial conditions. The investment portfolios contain a diversified blend of fixed maturity, equity and short term securities. Alternative investments, including limited partnerships, are used to enhance risk adjusted long term returns while improving portfolio diversification. At December 31, 2021, $162 million is committed to fund future capital calls from various third party limited partnership investments in exchange for an ownership interest in the related partnerships. Investment risk is monitored through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews.
The table below presents the estimated future minimum benefit payments at December 31, 2021.

Expected future benefit paymentsPension BenefitsOther Postretirement Benefits
(In millions)  
   
2022$223 $4 
2023209 4 
2024205 3 
2025204 3 
2026205 3 
2027 – 2031911 11 

In 2022, it is expected that contributions of approximately $16 million will be made to pension plans and $2 million to postretirement health care and life insurance benefit plans.

Pension plan assets measured at fair value on a recurring basis are summarized below.

December 31, 2021Level 1Level 2Level 3Total
(In millions)    
    
Plan assets at fair value:    
Fixed maturity securities:    
Corporate and other bonds$645 $8 $653 
States, municipalities and political subdivisions30 30 
Asset-backed110 110 
Total fixed maturities$— 785 8 793 
Equity securities801 141 942 
Short term investments47 47 
Fixed income mutual funds111 111 
Other assets2 8 10 
Total plan assets at fair value$961 $934 $8 $1,903 
Plan assets at net asset value: (a)
Equity securities20 
Limited partnerships893 
Total plan assets$961 $934 $8 $2,816 
December 31, 2020Level 1Level 2Level 3Total
(In millions)    
     
Plan assets at fair value:    
Fixed maturity securities:    
Corporate and other bonds$643 $9 $652 
States, municipalities and political subdivisions32 32 
Asset-backed98 98 
Total fixed maturities$— 773 9 782 
Equity securities785 137 922 
Short term investments37 38 75 
Fixed income mutual funds139 139 
Other assets8 8 
Total plan assets at fair value$961 $956 $9 $1,926 
Plan assets at net asset value: (a)
Limited partnerships813 
Total plan assets$961 $956 $9 $2,739 

(a)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table for these investments are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

The limited partnership investments held within the plans are recorded at fair value, which represents the plans’ shares of the net asset value of each partnership, as determined by the general partner. Limited partnerships comprising 66% and 75% of the carrying value as of December 31, 2021 and 2020 employ hedge fund strategies that generate returns through investing in marketable securities in the public fixed income and equity markets and the remainder were primarily invested in private debt and equity. Within hedge fund strategies, approximately 76% were equity related, 20% pursued a multi-strategy approach and 4% were focused on distressed investments at December 31, 2021.

For a discussion of the valuation methodologies used to measure fixed maturity securities, equities and short term investments, see Note 4.

Other postretirement benefits plan assets measured at fair value on a recurring basis are summarized below.

December 31, 2021Level 1Level 2Level 3Total
(In millions)   
    
Fixed maturity securities:   
Corporate and other bonds$31 $31 
States, municipalities and political subdivisions32 32 
Asset-backed7 7 
Total fixed maturities$— 70 $— $70 
Short term investments4 4 
Fixed income mutual funds19 19 
Total$23 $70 $— $93 
December 31, 2020Level 1Level 2Level 3Total
(In millions)   
Fixed maturity securities:   
Corporate and other bonds$24 $24 
States, municipalities and political subdivisions14 14 
Asset-backed33 33 
Total fixed maturities$— 71 $— $71 
Short term investments5 5 
Fixed income mutual funds20 20 
Total$25 $71 $— $96 

There were no Level 3 assets at December 31, 2021 and 2020.

Savings Plans – Several contributory savings plans are maintained which allow employees to make regular contributions based upon a percentage of their salaries. Matching contributions are made up to specified percentages of employees’ contributions. Employer contributions to these plans amounted to $83 million, $90 million and $102 million for the years ended December 31, 2021, 2020 and 2019.

Stock-based Compensation – In 2016, shareholders approved the Loews Corporation 2016 Incentive Compensation Plan (the “2016 Loews Plan”) which replaced a previously existing plan. The aggregate number of shares of Loews Corporation common stock authorized under the 2016 Loews Plan is 6,000,000 shares, plus up to 3,000,000 shares that may be forfeited under the prior plan. The maximum number of shares of Loews Corporation common stock with respect to which awards may be granted to any individual in any calendar year is 500,000 shares. In accordance with the 2016 Loews Plan and the prior equity plan, Loews Corporation stock-based compensation consists of the following:

SARs: SARs were granted under the prior equity plan. The exercise price per share may not be less than the fair market value of the common stock on the date of grant. Generally, SARs vest ratably over a four-year period and expire in ten years.

Time-based Restricted Stock Units: Time-based restricted stock units (“RSUs”) are granted under the 2016 Loews Plan and represent the right to receive one share of Loews Corporation common stock for each vested RSU. Generally, RSUs vest 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date.

Performance-based Restricted Stock Units: Performance-based RSUs (“PSUs”) are granted under the 2016 Loews Plan and represent the right to receive one share of Loews Corporation common stock for each vested PSU, subject to the achievement of specified performance goals by the Company. Generally, performance-based RSUs vest, if performance goals are satisfied, 50% on the second anniversary of the grant date and 50% on the third anniversary of the grant date.

In 2021, Loews Corporation granted an aggregate of 223,664 RSUs and PSUs at a weighted average grant-date fair value of $47.68 per unit. 16,528 RSUs were forfeited during the year. 1,364,502 SARs were outstanding at December 31, 2021 with a weighted average exercise price of $42.15.

The Company recognized compensation expense in connection with stock-based compensation that decreased net income by $33 million, $37 million and $37 million for the years ended December 31, 2021, 2020 and 2019. Several of Loews Corporation’s subsidiaries also maintain their own stock-based compensation plans. Such amounts include Loews Corporation’s share of expense related to these plans.