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Employee Benefits
 9 Months Ended
Sep. 30, 2021
Retirement Benefits [Abstract]  
Employee Benefits
Note 9. Employee Benefits
We maintain non-contributory defined benefit pension plans for certain employees. In addition, we maintain postretirement health care and life insurance plans for certain retirees and their dependents, which are both contributory and non-contributory, and include a limit on our share of the cost for certain current and future retirees. In accordance with our accounting policy for pension and other postretirement benefits, operating expenses include service costs associated with pension and other postretirement benefits while other credits and/or charges based on actuarial assumptions, including projected discount rates, an estimated return on plan assets, and impact from health care trend rates are reported in Other income (expense), net. These estimates are updated in the fourth quarter to reflect actual return on plan assets and updated actuarial assumptions or upon a remeasurement event. The adjustment is recognized in the income statement during the fourth quarter or upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains and losses.

Net Periodic Benefit Cost (Income)
The following table summarizes the components of net periodic benefit cost (income) related to our pension and postretirement health care and life insurance plans:
(dollars in millions)
PensionHealth Care and Life
Three Months Ended September 30,2021202020212020
Service cost - Cost of services$59 $61 $24 $22 
Service cost - Selling, general and administrative expense8 15 4 5 
Service cost$67 $76 $28 $27 
Amortization of prior service cost (credit)$16 $16 $(223)$(242)
Expected return on plan assets(309)(295)(6)(7)
Interest cost102 124 72 108 
Remeasurement loss, net144 1,092 — — 
Other components$(47)$937 $(157)$(141)
Total$20 $1,013 $(129)$(114)
(dollars in millions)
PensionHealth Care and Life
Nine months ended September 30,2021202020212020
Service cost - Cost of services$186 $179 $71 $67 
Service cost - Selling, general and administrative expense26 43 14 15 
Service cost$212 $222 $85 $82 
Amortization of prior service cost (credit)$46 $46 $(670)$(725)
Expected return on plan assets(927)(888)(17)(20)
Interest cost296 401 217 322 
Remeasurement loss (gain), net(1,170)1,427 — — 
Other components$(1,755)$986 $(470)$(423)
Total$(1,543)$1,208 $(385)$(341)
The service cost component of net periodic benefit cost (income) is recorded in Cost of services and Selling, general and administrative expense in the condensed consolidated statements of income while the other components, including remeasurement adjustments, if any, are recorded in Other income (expense), net.

Severance Payments
During the three and nine months ended September 30, 2021, we paid severance benefits of an insignificant amount and $169 million, respectively. During the three and nine months ended September 30, 2021, we recorded pre-tax severance charges of $109 million and $124 million, respectively, both primarily due to a $103 million charge related to voluntary separations under our existing plans. At
September 30, 2021, we had a remaining severance liability of $529 million, a portion of which includes future contractual payments to separated employees.

Employer Contributions
During both the three and nine months ended September 30, 2021 and September 30, 2020, we made no contributions to our qualified pension plans and made insignificant contributions to our nonqualified pension plans. We do not expect mandatory pension funding through December 31, 2021. There have been no significant changes with respect to the nonqualified pension and other postretirement benefit plans contributions in 2021.

Remeasurement loss (gain), net
During the three and nine months ended September 30, 2021, we recorded a net pre-tax remeasurement loss of $144 million and a net pre-tax remeasurement gain of $1.2 billion, respectively in our pension plans triggered by settlements.

During the three months ended September 30, 2021, we recorded a pre-tax remeasurement loss of $144 million in our pension plans driven by a $667 million charge due to changes in our discount rate and other assumption changes, offset by a $523 million credit resulting from the difference between our estimated and our actual return on assets.

During the three months ended June 30, 2021, we recorded a pre-tax remeasurement gain of $1.3 billion in our pension plans triggered by settlements, primarily driven by a $1.2 billion credit mainly due to changes in our discount rate and changes in our lump sum interest rate assumptions used to determine the current year liabilities of our pension plans and a $122 million credit resulting from the difference between our estimated and our actual return on assets.

During the three and nine months ended September 30, 2020, we recorded net pre-tax remeasurement losses of $1.1 billion and $1.4 billion, respectively, in our pension plans triggered by settlements.

During the three months ended September 30, 2020, we recorded a net pre-tax remeasurement loss of $1.1 billion primarily driven by a $1.8 billion charge due to changes in our discount rate and lump sum interest rate assumptions used to determine the current year liabilities of our pension plans, offset by a $689 million credit resulting from the difference between our estimated and our actual return on assets.

During the three months ended June 30, 2020, we recorded a net pre-tax remeasurement loss of $153 million primarily driven by a $163 million charge mainly resulting from the difference between our estimated and our actual return on assets and changes in our lump sum interest rate assumptions used to determine the current year liabilities of our pension plans, offset by a credit due to changes in our discount rate.

During the three months ended March 31, 2020, we recorded a net pre-tax remeasurement loss of $182 million primarily driven by a $196 million charge mainly due to changes in our discount rate and lump sum interest rate assumptions used to determine the current year liabilities of our pension plans, offset by a credit resulting from the difference between our estimated and our actual return on assets.