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Retirement Benefits
12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Retirement Benefits Retirement Benefits
Pension and Postretirement Health Care Benefits Plans
U.S. Pension Benefit Plans
The Company’s non-contributory U.S. defined benefit plan (the "U.S. Pension Plan") provides benefits to U.S. employees hired prior to January 1, 2005, who became eligible after one year of service. The Company also has an additional non-contributory supplemental retirement benefit plan, the Motorola Supplemental Pension Plan ("MSPP"), which provided supplemental benefits to individuals by replacing benefits that are lost by such individuals under the retirement formula due to application of the limitations imposed by the Internal Revenue Code. In December 2008, the Company amended the U.S. Pension Plan and MSSP (together the "U.S. Pension Plans") such that, effective March 1, 2009: (i) no participant shall accrue any benefit or additional benefit on or after March 1, 2009, and (ii) no compensation increases earned by a participant on or after March 1, 2009 shall be used to compute any accrued benefit.
In December 2019, the Company completed a voluntary lump-sum election window offered to certain participants of the U.S. Pension Plan. The aggregate dollar amount of lump-sum elections by approximately 6,300 participants was $836 million, and accordingly, this amount was paid out of plan assets prior to December 31, 2019.  These actions resulted in a reduction of our projected benefit obligation, absent of actuarial losses experienced from decreases in interest rates, of $1.0 billion and a settlement loss of $359 million recorded within “Other charges” on the Consolidated Statement of Operations.
Postretirement Health Care Benefits Plan
Certain health care benefits are available to eligible domestic employees hired prior to January 1, 2002 and meeting certain age and service requirements upon termination of employment (the “Postretirement Health Care Benefits Plan”). As of January 1, 2005, the Postretirement Health Care Benefits Plan was closed to new participants. After a series of amendments, all eligible retirees under the age of 65 will be provided an annual subsidy per household, versus per individual, toward the purchase of their own health care coverage from private insurance companies and for the reimbursement of eligible health care expenses. All eligible retirees over the age of 65 are entitled to one fixed-rate subsidy capped at $560 per participant.
These series of amendments to the Postretirement Health Care Benefits Plan resulted in a reduction in the postretirement benefit obligation. A substantial portion of the decrease related to prior service credits and will be amortized as a credit to the Consolidated Statements of Operations over approximately five years, or the period in which the remaining employees eligible for the plan qualify for benefits under the plan.


Non U.S. Pension Benefit Plans
The Company also provides defined benefit plans which cover non-U.S. employees in certain jurisdictions, principally the U.K. and Germany (the “Non-U.S. Pension Benefit Plans”). Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate.
In June 2015, the Company amended its Non-U.S. defined benefit plan within the United Kingdom by closing future benefit accruals to all participants effective December 31, 2015.
During the years ended December 31, 2017, the Company offered lump-sum settlements to certain participants in the Non-U.S. defined benefit plan within the United Kingdom. The lump-sum settlements were targeted to certain participants who had accrued a pension benefit, but had not yet started receiving pension benefit payments. As a result of the actions taken, the Company recorded settlement losses of $48 million in 2017, respectively, which are recorded within Other income (expense) within the Consolidated Statement of Operations.
During 2019, the Motorola Solutions United Kingdom defined benefit plan trustees decided to exercise their discretion on early retirement benefit reductions. This action resulted in a reduction of the projected benefit obligation of approximately $83 million related to prior service credits that will be amortized as a credit to the Consolidated Statements of Operations over approximately twenty-nine years, or the period in which the remaining employees eligible for the plan qualify for benefits under the plan.
Net Periodic Cost (Benefit)
The net periodic cost (benefit) for pension and Postretirement Health Care Benefits plans was as follows:
 
U.S. Pension Benefit Plans
 
Non U.S. Pension Benefit Plans
 
Postretirement Health Care Benefits Plan
Years ended December 31
2019
 
2018
 
2017
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Service cost
$

 
$

 
$

 
$
2

 
$
3

 
$
3

 
$

 
$

 
$

Interest cost
202

 
186

 
185

 
36

 
38

 
40

 
3

 
2

 
3

Expected return on plan assets
(275
)
 
(270
)
 
(229
)
 
(85
)
 
(92
)
 
(92
)
 
(10
)
 
(10
)
 
(10
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized net loss
46

 
57

 
44

 
15

 
15

 
16

 
4

 
4

 
5

Unrecognized prior service benefit

 

 

 

 

 

 
(15
)
 
(15
)
 
(18
)
Settlement loss
359

 

 

 

 

 
48

 

 

 

Net periodic cost (benefit)
$
332

 
$
(27
)
 
$

 
$
(32
)
 
$
(36
)
 
$
15

 
$
(18
)
 
$
(19
)
 
$
(20
)

The status of the Company’s plans is as follows: 
 
U.S. Pension Benefit Plans
 
Non U.S. Pension Benefit Plans
 
Postretirement Health Care Benefits Plan
  
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Change in benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at January 1
$
4,864

 
$
5,235

 
$
1,654

 
$
1,844

 
$
72

 
$
85

Service cost

 

 
2

 
3

 

 

Interest cost
202

 
186

 
36

 
38

 
3

 
2

Plan amendments

 

 
(83
)
 
10

 

 

Actuarial loss (gain)
609

 
(452
)
 
207

 
(97
)
 
4

 
(8
)
Foreign exchange valuation adjustment

 

 
44

 
(98
)
 

 

Benefit payments
(948
)
 
(105
)
 
(46
)
 
(46
)
 
(6
)
 
(7
)
Benefit obligation at December 31
$
4,727

 
$
4,864

 
$
1,814

 
$
1,654

 
$
73

 
$
72

Change in plan assets:
 
 
 
 
 
 
 
 
 
 
 
Fair value at January 1
$
3,673

 
$
3,614

 
$
1,438

 
$
1,590

 
$
133

 
$
151

Return on plan assets
873

 
(339
)
 
188

 
(28
)
 
33

 
(12
)
Company contributions
3

 
503

 
8

 
8

 

 

Foreign exchange valuation adjustment

 

 
53

 
(88
)
 

 

Benefit payments
(948
)
 
(105
)
 
(46
)
 
(44
)
 
(6
)
 
(6
)
Fair value at December 31
$
3,601

 
$
3,673

 
$
1,641

 
$
1,438

 
$
160

 
$
133

Funded status of the plan
$
(1,126
)
 
$
(1,191
)
 
$
(173
)
 
$
(216
)
 
$
87

 
$
61

Unrecognized net loss
1,935

 
2,329

 
648

 
543

 
42

 
74

Unrecognized prior service benefit

 

 
(84
)
 
11

 
(20
)
 
(35
)
Prepaid pension cost
$
809

 
$
1,138

 
$
391

 
$
338

 
$
109

 
$
100

Components of prepaid (accrued) pension cost:
 
 
 
 
 
 
 
 
 
 
 
Current benefit liability
$
(3
)
 
$
(3
)
 
$

 
$

 
$

 
$

Non-current benefit liability
(1,123
)
 
(1,188
)
 
(299
)
 
(265
)
 

 

Non-current benefit asset

 

 
126

 
49

 
87

 
61

Deferred income taxes
463

 
561

 
60

 
55

 
9

 
10

Accumulated other comprehensive loss
1,472

 
1,768

 
504

 
499

 
13

 
29

Prepaid pension cost
$
809

 
$
1,138

 
$
391

 
$
338

 
$
109

 
$
100


The benefit obligation and plan assets for the Company's U.S. Pension Benefit Plan and Postretirement Health Care Benefit Plan are measured as of December 31, 2019. The Company utilizes a five-year, market-related asset value method of recognizing asset related gains and losses.
Under relevant accounting rules, when almost all of the plan participants are considered inactive, the amortization period for certain unrecognized gains and losses changes from the average remaining service period to the average remaining lifetime of the participants. As such, the Company amortizes gains and losses over periods ranging from ten to thirty-one years. Prior service costs will be amortized over periods ranging from two to five years. Benefits under all pension plans are valued based on the projected unit credit cost method.
The net periodic cost for 2020 will include amortization of the unrecognized net loss for the U.S. Pension Benefit Plans and Non U.S. Pension Benefit Plans, currently included in Accumulated other comprehensive loss, of $58 million and $12 million, respectively. It is estimated that the 2020 net periodic expense for the Postretirement Health Care Benefits Plan will include amortization of net periodic benefits of $11 million, comprised of unrecognized net losses and prior service benefits, currently included in Accumulated other comprehensive loss.
Actuarial Assumptions
Certain actuarial assumptions such as the discount rate and the long-term rate of return on plan assets have a significant effect on the amounts reported for net periodic cost and the benefit obligation. The assumed discount rates reflect the prevailing market rates of a universe of high-quality, non-callable, corporate bonds currently available that, if the obligation were settled at the measurement date, would provide the necessary future cash flows to pay the benefit obligation when due. The long-term rates of return on plan assets represent an estimate of long-term returns on an investment portfolio consisting of a mixture of equities, fixed income, cash and other investments similar to the actual investment mix. In determining the long-term return on plan assets, the Company considers long-term rates of return on the asset classes (both historical and forecasted) in which the Company expects the plan funds to be invested.
The Company uses a full yield curve approach to estimate interest and service cost components of net periodic cost (benefit) for defined pension benefit pension and other post-retirement benefit plans. The full yield curve approach requires the application of the specific spot rate along the yield curve used in the determination of the projected benefit obligation to the relevant projected cash flows.
Weighted average actuarial assumptions used to determine costs for the plans at the beginning of the fiscal year were as follows: 
 
U.S. Pension Benefit Plans
 
Non U.S. Pension Benefit Plans
 
Postretirement Health Care Benefits Plan
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Discount rate
4.25
%
 
3.57
%
 
2.37
%
 
2.08
%
 
3.85
%
 
3.16
%
Investment return assumption
6.85
%
 
6.95
%
 
5.23
%
 
5.18
%
 
6.90
%
 
7.00
%

Weighted average actuarial assumptions used to determine benefit obligations for the plans were as follows: 
 
U.S. Pension Benefit Plans
 
Non U.S. Pension Benefit Plans
 
Postretirement Health Care Benefits Plan
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Discount rate
3.32
%
 
4.47
%
 
1.82
%
 
2.67
%
 
3.15
%
 
4.29
%
Future compensation increase rate
n/a

 
n/a

 
0.52
%
 
0.52
%
 
n/a

 
n/a


The accumulated benefit obligations for the plans were as follows: 
 
U.S. Pension Benefit Plans
 
Non U.S. Pension Benefit Plans
December 31
2019
 
2018
 
2019
 
2018
Accumulated benefit obligation
$
4,727

 
$
4,864

 
$
1,809

 
$
1,649


The Company used "Mortality Improvement Scale MP-2018" to calculate the 2019 U.S. projected benefit obligations and the "Mortality Improvement Scale MP-2017" to calculate the 2018 U.S. projected benefit obligations.
Investment Policy
The individual plans have adopted an investment policy designed to meet or exceed the expected rate of return on plan assets assumption. To achieve this, the plans retain professional advisors and investment managers that invest plan assets into various classes including, but not limited to: equity and fixed income securities, cash, cash equivalents, hedge funds, infrastructure/utilities, insurance contracts, leveraged loan funds and real estate. The Company uses long-term historical actual return experience with consideration of the expected investment mix of the plans’ assets, as well as future estimates of long-term investment returns, to develop its expected rate of return assumption used in calculating the net periodic cost. The individual plans have target mixes for these asset classes, which are readjusted periodically when an asset class weighting deviates from the target mix, with the goal of achieving the required return at a reasonable risk level.
The weighted-average asset allocations by asset categories for all pension and the Postretirement Health Care Benefits plans were as follows:
 
All Pension Benefit Plans
 
Postretirement Health Care Benefits Plan
December 31
2019
 
2018
 
2019
 
2018
Target Mix:
 
 
 
 
 
 
 
Equity securities
25
%
 
30
%
 
28
%
 
32
%
Fixed income securities
56
%
 
51
%
 
52
%
 
49
%
Cash and other investments
19
%
 
19
%
 
20
%
 
19
%
Actual Mix:
 
 
 
 
 
 
 
Equity securities
24
%
 
28
%
 
29
%
 
31
%
Fixed income securities
57
%
 
50
%
 
54
%
 
48
%
Cash and other investments
19
%
 
22
%
 
17
%
 
21
%

Within the equity securities asset class, the investment policy provides for investments in a broad range of publicly-traded securities including both domestic and foreign equities. Within the fixed income securities asset class, the investment policy provides for investments in a broad range of publicly-traded debt securities including: U.S. treasury issues, corporate debt securities, mortgage and asset-backed securities, as well as foreign debt securities. In the cash and other investments asset class, investments may include, but are not limited to: cash, cash equivalents, commodities, hedge funds, infrastructure/utilities, insurance contracts, leveraged loan funds and real estate.
Cash Funding
The Company made $3 million and $503 million of contributions to its U.S. Pension Benefit Plans during 2019 and 2018, respectively. The Company contributed $8 million to its Non U.S. Pension Benefit Plans during 2019 and 2018. The Company made no contributions to its Postretirement Health Care Benefits Plan in 2019 or 2018.
Expected Future Benefit Payments
The following benefit payments are expected to be paid: 
Year
U.S. Pension Benefit Plans
 
Non U.S. Pension Benefit Plans
 
Postretirement Health Care Benefits Plan
2020
$
133

 
$
48

 
$
7

2021
150

 
48

 
6

2022
169

 
49

 
6

2023
184

 
51

 
5

2024
201

 
52

 
5

2025-2029
1,261

 
276

 
22


Other Benefit Plans
Split-Dollar Life Insurance Arrangements
The Company maintains a number of endorsement split-dollar life insurance policies on now-retired officers under a frozen plan. The Company had purchased the life insurance policies to insure the lives of employees and then entered into a separate agreement with the employees that split the policy benefits between the Company and the employee. Motorola Solutions owns the policies, controls all rights of ownership, and may terminate the insurance policies. To effect the split-dollar arrangement, Motorola Solutions endorsed a portion of the death benefits to the employee and upon the death of the employee, the employee’s beneficiary typically receives the designated portion of the death benefits directly from the insurance company and the Company receives the remainder of the death benefits. It is currently expected that minimal cash payments will be required to fund these policies.
The net periodic pension cost for these split-dollar life insurance arrangements was $5 million for the years ended December 31, 2019, 2018 and 2017. The Company has recorded a liability representing the actuarial present value of the future death benefits as of the employees’ expected retirement date of $67 million and $61 million as of December 31, 2019 and December 31, 2018, respectively.
Deferred Compensation Plan
The Company maintains a deferred compensation plan (“the Plan”) for certain eligible participants. Under the Plan, participants may elect to defer base salary and cash incentive compensation in excess of 401(k) plan limitations. Participants under the Plan may choose to invest their deferred amounts in the same investment alternatives available under the Company's 401(k) plan. The Plan also allows for Company matching contributions for the following: (i) the first 4% of compensation deferred under the Plan, subject to a maximum of $50,000 for board officers, (ii) lost matching amounts that would have been made under the 401(k) plan if participants had not participated in the Plan, and (iii) discretionary amounts as approved by the Compensation and Leadership Committee of the board of directors.
Defined Contribution Plan
The Company has various defined contribution plans, in which all eligible employees may participate. In the U.S., the 401(k) plan is a contributory plan. Matching contributions are based upon the amount of the employees’ contributions. The Company’s expenses for material defined contribution plans for the years ended December 31, 2019, 2018 and 2017 were $32 million, $31 million and $28 million, respectively.
Under the 401(k) plan, the Company may make an additional discretionary matching contribution to eligible employees. For the years ended December 31, 2019, 2018, and 2017 the Company made no discretionary contributions.