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Pension and Postretirement Benefit Plans and Defined Contribution Plans (Tables)
 12 Months Ended
Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Schedule of Net Periodic Benefit Costs
The following table provides the annual cost/(income) and changes in Other comprehensive loss for our benefit plans:
 
 
Year Ended December 31,
 
 
Pension Plans
 
 
 
 
 
 
U.S.
Qualified(a)
 
U.S.
Supplemental
(Non-Qualified)(b)
 
International(c), (f)
 
Postretirement
Plans(d), (f)
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2014

 
2016

 
2015

 
2014

 
2016

 
2015

 
2014

 
2016

 
2015

 
2014

Service cost
 
$
257

 
$
287

 
$
253

 
$
18

 
$
22

 
$
20

 
$
165

 
$
186

 
$
199

 
$
41

 
$
55

 
$
55

Interest cost
 
646

 
676

 
697

 
53

 
54

 
57

 
233

 
307

 
394

 
101

 
117

 
169

Expected return on plan assets
 
(958
)
 
(1,089
)
 
(1,043
)
 
—

 
—

 
—

 
(381
)
 
(418
)
 
(459
)
 
(34
)
 
(53
)
 
(63
)
Amortization of:
 
 

 
 

 
 
 
 

 
 

 
 
 
 

 
 

 
 
 
 

 
 

 
 
Actuarial losses
 
395

 
346

 
63

 
37

 
44

 
29

 
93

 
122

 
97

 
32

 
38

 
6

Prior service credits
 
5

 
(5
)
 
(7
)
 
(1
)
 
(2
)
 
(2
)
 
(3
)
 
(7
)
 
(7
)
 
(174
)
 
(146
)
 
(57
)
Curtailments
 
10

 
3

 
2

 
1

 
—

 
—

 
(2
)
 
5

 
—

 
(26
)
 
(31
)
 
(7
)
Settlements
 
90

 
556

 
52

 
28

 
34

 
28

 
9

 
81

 
22

 
—

 
—

 
—

Special termination benefits
 
—

 
—

 
—

 
—

 
—

 
—

 
1

 
1

 
8

 
—

 
—

 
—

Net periodic benefit costs/(income) reported in Income
 
444

 
773

 
16

 
137

 
153

 
132

 
115

 
277

 
254

 
(59
)
 
(21
)
 
102

(Income)/cost reported in Other comprehensive loss(e)
 
253

 
(396
)
 
2,768

 
121

 
(143
)
 
163

 
640

 
(542
)
 
260

 
3

 
(540
)
 
(174
)
(Income)/cost recognized in Comprehensive income
 
$
697

 
$
378

 
$
2,784

 
$
258

 
$
10

 
$
294

 
$
755

 
$
(265
)
 
$
514

 
$
(56
)
 
$
(560
)
 
$
(72
)
(a) 
2016 v. 2015––The decrease in net periodic benefit costs for our U.S. qualified pension plans was primarily driven by (i) a year-over-year decrease in settlement activity compared to that of 2015 related to the non-recurring lump-sum settlement option to certain plan participants discussed in the 2015 v. 2014 analysis, below, (ii) lower service costs resulting from a higher discount rate, and (iii) lower interest costs resulting from a lower beginning benefit obligation. The aforementioned decreases were partially offset by (i) a lower expected return on plan assets resulting from both a lower expected rate of return, and a net decrease of approximately $1.1 billion in the asset base, due in part to lump-sum payments made in 2015 to certain terminated vested colleagues to settle Pfizer’s pension obligation, and (ii) an increase in the amounts amortized for actuarial losses, primarily resulting from the remeasurement in 2015 of Hospira’s U.S. qualified pension plan due to its plan termination.
2015 v. 2014––The increase in net periodic benefit costs for our U.S. qualified pension plans was primarily driven by (i) a non-recurring charge of $419 million related to the settlement of pension obligations in accordance with an offer to certain terminated employees who are vested in their pension benefits to elect a lump-sum payment to settle Pfizer’s pension obligation with those participants, or an annuity of their deferred vested pension benefits, and (ii) the increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation (which increased the amount of deferred actuarial losses), and, to a lesser extent, a 2014 change in mortality assumptions (reflecting a longer life expectancy for plan participants). The aforementioned increases were partially offset by (i) a greater expected return on plan assets resulting from an increased plan asset base due to a voluntary contribution of $1.0 billion made at the beginning of January 2015, which in turn was partially offset by a decrease in the expected rate of return on plan assets from 8.5% to 8.3% and (ii) lower interest costs resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.
(b) 
2016 v. 2015––The decrease in net periodic benefit costs for our U.S. supplemental (non-qualified) pension plans was primarily driven by (i) a decrease in the amounts amortized for actuarial losses resulting from the increase in 2015 in the discount rate used to determine the benefit obligation, (ii) lower settlement activity, and (iii) lower service costs resulting from a higher discount rate.
2015 v. 2014––The increase in net periodic benefit costs for our U.S. supplemental (non-qualified) pension plans was primarily driven by (i) an increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation, and (ii) higher settlement activity.
(c) 
2016 v. 2015––The decrease in net periodic benefit costs for our international pension plans was primarily driven by (i) lower service and interest costs, resulting from a change in our approach for measuring service and interest costs (see (f) below), (ii) lower settlement activity, and (iii) a decrease in the amounts amortized for actuarial losses resulting from large gains in 2015, which decreased the plan net loss position. The aforementioned decreases to our net periodic benefit costs were partially offset by a decrease in the expected return on plan assets due to a lower asset base and a lower expected rate of return on plan assets.
2015 v. 2014––The increase in net periodic benefit costs for our international pension plans was primarily driven by (i) a decrease in the expected return on plan assets due to a lower expected rate of return on plan assets, (ii) an increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation, and (iii) higher settlement charges due to the settlement of a pension plan in Sweden. The aforementioned increase in net periodic benefit costs was partially offset by the decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.
(d) 
2016 v. 2015––The increase in net periodic benefit income for our postretirement plans was primarily driven by (i) an increase in prior service credits due to the postretirement medical plan cap changes during 2016 and 2015, (ii) lower interest costs resulting from a lower benefit obligation, (iii) lower service costs resulting from a higher discount rate, and (iv) a decrease in the amounts amortized for actuarial losses resulting from the increase in 2015 in the discount rate used to determine the benefit obligation. The aforementioned changes were partially offset by (i) a decrease in expected return on plan assets, primarily resulting from a decrease in plan assets, reflecting payments by the plan for IRC Section 401(h) reimbursements to Pfizer for eligible 2014 and 2015 prescription drug expenses for certain retirees, and (ii) lower curtailment gains.
2015 v. 2014––The decrease in net periodic benefit costs for our postretirement plans was primarily driven by (i) the increase in the amounts amortized for prior service credits and (ii) an increase in curtailment gains resulting from the implementation of changes to certain retiree medical benefits to adopt programs eligible for the Medicare Part D plan subsidy, as allowed under the EGWP, and another plan change to establish benefit caps for certain plan participants, as well as (iii) a decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation. The aforementioned decreases were partially offset by an increase in actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.
(e) 
For details of the changes in Other comprehensive loss, see the benefit plan activity in the consolidated statements of comprehensive income.
(f) 
Effective January 1, 2016, the Company changed the approach used to measure service and interest costs for certain international pension and other postretirement benefit plans. For fiscal 2015 and 2014, the Company measured service and interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the respective plan obligations. For fiscal 2016, we elected to measure service and interest costs by applying the spot rates along the yield curve for certain international plans to the plans' liability cash flows. The Company believes the new approach provides a more precise measurement of service and interest costs by aligning the timing of the plans’ liability cash flows to the corresponding spot rates on the yield curve. This change does not affect the measurement of our plan obligations. We have accounted for this change as a change in accounting estimate and, accordingly, have accounted for it on a prospective basis. The reduction in expense for 2016 associated with this change in estimate was $42 million, primarily related to certain international pension plans, which was recognized evenly over each quarter of the year. The change in approach for the postretirement benefit plans was not material to the 2016 consolidated statement of income.
Schedule of Amounts in Accumulated Other Comprehensive Income/(Loss) Expected to be Amortized into 2014 Net Periodic Benefit Costs
The following table provides the amounts in Accumulated other comprehensive loss expected to be amortized into 2017 net periodic benefit costs:
  
 
Pension Plans
 
  
(MILLIONS OF DOLLARS)
 
U.S.
Qualified
 
U.S. Supplemental
(Non-Qualified)
 
International 
 
Postretirement Plans
Actuarial losses
 
$
(414
)
 
$
(50
)
 
$
(113
)
 
$
(31
)
Prior service credits and other
 
(5
)
 
1

 
4

 
184

Total
 
$
(419
)
 
$
(49
)
 
$
(109
)
 
$
153
Schedule of Assumptions Used
The following table provides the weighted-average actuarial assumptions of our benefit plans:
(PERCENTAGES)
 
2016
 
2015
 
2014
Weighted-average assumptions used to determine benefit obligations
 
 
 
 
 
 
Discount rate:
 
 
 
 
 
 
U.S. qualified pension plans
 
4.3%
 
4.5%
 
4.2%
U.S. non-qualified pension plans
 
4.2%
 
4.5%
 
4.0%
International pension plans
 
2.4%
 
3.1%
 
3.0%
Postretirement plans
 
4.2%
 
4.5%
 
4.2%
Rate of compensation increase:
 
 
 
 
 
 
U.S. qualified pension plans
 
2.8%
 
2.8%
 
2.8%
U.S. non-qualified pension plans
 
2.8%
 
2.8%
 
2.8%
International pension plans
 
2.6%
 
2.6%
 
2.7%
Weighted-average assumptions used to determine net periodic benefit cost
 
 
 
 
 
 
Discount rate:
 
 
 
 
 
 
U.S. qualified pension plans
 
4.5%
 
4.2%
 
5.2%
U.S. non-qualified pension plans
 
4.5%
 
4.0%
 
4.8%
International pension plans interest cost(a)
 
2.7%
 
3.0%
 
3.9%
International pension plans service cost(a)
 
3.0%
 
3.0%
 
3.9%
Postretirement plans
 
4.5%
 
4.2%
 
5.1%
Expected return on plan assets:
 
 
 
 
 
 
U.S. qualified pension plans
 
8.0%
 
8.3%
 
8.5%
International pension plans
 
5.2%
 
5.5%
 
5.8%
Postretirement plans
 
8.0%
 
8.3%
 
8.5%
Rate of compensation increase:
 
 
 
 
 
 
U.S. qualified pension plans
 
2.8%
 
2.8%
 
2.8%
U.S. non-qualified pension plans
 
2.8%
 
2.8%
 
2.8%
International pension plans
 
2.6%
 
2.7%
 
2.9%

(a) 
As discussed above, effective January 1, 2016, the Company changed the approach used to measure service cost and interest costs for certain international pension plans and other postretirement benefits. In accordance with this change, the effective rate for interest on the benefit obligations and effective rate for service cost, respectively, are reported for international pension plans.
Schedule of Health Care Cost Trend Rates
The following table provides the healthcare cost trend rate assumptions for our U.S. postretirement benefit plans:
 
 
2016

 
2015

Healthcare cost trend rate assumed for next year (up to age 65)
 
6.3
%
 
6.5
%
Healthcare cost trend rate assumed for next year (age 65 and older)
 
7.4
%
 
7.9
%
Rate to which the cost trend rate is assumed to decline
 
4.5
%
 
4.5
%
Year that the rate reaches the ultimate trend rate
 
2037

 
2037


The following table provides the effects as of December 31, 2016 of a one-percentage-point increase or decrease in the healthcare cost trend rate assumed for postretirement benefits:
(MILLIONS OF DOLLARS)
 
Increase

 
Decrease

Effect on total service and interest cost components
 
$
5

 
$
(5
)
Effect on postretirement benefit obligation
 
37

 
(50
)
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates
The following table provides the effects as of December 31, 2016 of a one-percentage-point increase or decrease in the healthcare cost trend rate assumed for postretirement benefits:
(MILLIONS OF DOLLARS)
 
Increase

 
Decrease

Effect on total service and interest cost components
 
$
5

 
$
(5
)
Effect on postretirement benefit obligation
 
37

 
(50
)
Schedule of Analysis of the Changes in the Benefit Obligations, Plan assets and Accounting Funded Status of Pension and Postretirement Benefit Plans
The following table provides an analysis of the changes in our benefit obligations, plan assets and funded status of our benefit plans:
  
 
Year Ended December 31,
 
 
Pension Plans
 
 
 
 
 
 
U.S. Qualified(a)
 
U.S. Supplemental
(Non-Qualified)(b)
 
International(c)
 
Postretirement
Plans(d)
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

Change in benefit obligation(e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation, beginning
 
$
14,926

 
$
16,575

 
$
1,343

 
$
1,481

 
$
9,214

 
$
10,796

 
$
2,463

 
$
3,168

Service cost
 
257

 
287

 
18

 
22

 
165

 
186

 
41

 
55

Interest cost
 
646

 
676

 
53

 
54

 
233

 
307

 
101

 
117

Employee contributions
 
—

 
—

 
—

 
—

 
7

 
7

 
85

 
79

Plan amendments
 
—

 
62

 
—

 
4

 
(6
)
 
(1
)
 
(177
)
 
(497
)
Changes in actuarial assumptions and other
 
725

 
(774
)
 
185

 
(70
)
 
1,273

 
(273
)
 
22

 
(185
)
Foreign exchange impact
 
—

 
—

 
—

 
—

 
(781
)
 
(938
)
 
—

 
(20
)
Acquisitions/divestitures/other, net
 
—

 
542

 
—

 
9

 
1

 
19

 
—

 
49

Curtailments
 
9

 
3

 
1

 
—

 
(14
)
 
(2
)
 
—

 
(3
)
Settlements
 
(449
)
 
(2,034
)
 
(78
)
 
(93
)
 
(45
)
 
(499
)
 
—

 
—

Special termination benefits
 
—

 
—

 
—

 
—

 
1

 
1

 
—

 
—

Benefits paid
 
(568
)
 
(412
)
 
(72
)
 
(65
)
 
(358
)
 
(389
)
 
(282
)
 
(300
)
Benefit obligation, ending(e)
 
15,547

 
14,926

 
1,450

 
1,343

 
9,691

 
9,214

 
2,254

 
2,463

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in plan assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets, beginning
 
11,633

 
12,706

 
—

 
—

 
7,959

 
8,588

 
622

 
762

Actual gain/(loss) on plan assets
 
939

 
(124
)
 
—

 
—

 
693

 
290

 
44

 
(3
)
Company contributions
 
1,000

 
1,000

 
151

 
158

 
209

 
558

 
(12
)
 
84

Employee contributions
 
—

 
—

 
—

 
—

 
7

 
7

 
85

 
79

Foreign exchange impact
 
—

 
—

 
—

 
—

 
(782
)
 
(602
)
 
—

 
—

Acquisitions/divestitures, net
 
—

 
496

 
—

 
—

 
(1
)
 
6

 
—

 
—

Settlements
 
(449
)
 
(2,034
)
 
(78
)
 
(93
)
 
(45
)
 
(499
)
 
—

 
—

Benefits paid
 
(568
)
 
(412
)
 
(72
)
 
(65
)
 
(358
)
 
(389
)
 
(282
)
 
(300
)
Fair value of plan assets, ending
 
12,556

 
11,633

 
—

 
—

 
7,683

 
7,959

 
458

 
622

Funded status—Plan assets less than benefit obligation
 
$
(2,990
)
 
$
(3,292
)
 
$
(1,450
)
 
$
(1,343
)
 
$
(2,008
)
 
$
(1,255
)
 
$
(1,796
)
 
$
(1,841
)
(a) 
The favorable change in the funded status of our U.S. qualified plans was primarily due to an increase in the actual return on assets, partially offset by plan losses resulting from the decrease in the discount rate at the end of 2016.
(b) 
Our U.S. supplemental (non-qualified) plans are generally not funded and these obligations, which are substantially greater than the annual cash outlay for these liabilities, will be paid from cash generated from operations. The increase in the benefit obligation is primarily due to a decrease in the discount rate.
(c) 
The unfavorable change in the international plans’ funded status was primarily due to plan losses related to a decrease in the discount rate (reflecting lower interest rates), partially offset by an increase in the actual return on plan assets.
(d) 
The favorable change in the funded status of our postretirement plans was primarily due to plan amendments for certain U.S. and Puerto Rico postretirement plans. The U.S. plan change applied a fixed cap on costs for certain groups within the plan. The Puerto Rico plan change includes: (i) a cap on costs for certain groups within the plan, and (ii) the adoption of the EGWP. The changes resulted in reductions to the plan liabilities of $82 million for the U.S. postretirement plan and $95 million for the Puerto Rico postretirement plan.
(e) 
For the U.S. and international pension plans, the benefit obligation is the PBO. For the postretirement plans, the benefit obligation is the ABO. The ABO for all of our U.S. qualified pension plans was $15.4 billion in 2016 and $14.8 billion in 2015. The ABO for our U.S. supplemental (non-qualified) pension plans was $1.4 billion in 2016 and $1.3 billion in 2015. The ABO for our international pension plans was $9.3 billion in 2016 and $8.8 billion in 2015.
Schedule of Amounts Recognized in Balance Sheet
The following table provides information as to how the funded status is recognized in our consolidated balance sheets:
  
 
As of December 31,
 
 
Pension Plans
 
 
 
 
 
 
U.S. Qualified
 
U.S. Supplemental
(Non-Qualified)
 
International
 
Postretirement
Plans
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

Noncurrent assets(a)
 
$
—

 
$
—

 
$
—

 
$
—

 
$
300

 
$
572

 
$
—

 
$
—

Current liabilities(b)
 
(160
)
 
—

 
(152
)
 
(126
)
 
(28
)
 
(25
)
 
(30
)
 
(31
)
Noncurrent liabilities(c)
 
(2,830
)
 
(3,292
)
 
(1,297
)
 
(1,216
)
 
(2,279
)
 
(1,801
)
 
(1,766
)
 
(1,809
)
Funded status
 
$
(2,990
)
 
$
(3,292
)
 
$
(1,450
)
 
$
(1,343
)
 
$
(2,008
)
 
$
(1,255
)
 
$
(1,796
)
 
$
(1,841
)
(a) 
Included primarily in Other noncurrent assets.
(b) 
Included in Accrued compensation and related items.
(c) 
Included in Pension benefit obligations, net and Postretirement benefit obligations, net, as appropriate.
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss)
The following table provides the pre-tax components of cumulative amounts recognized in Accumulated other comprehensive loss:
 
 
As of December 31,
 
 
Pension Plans
 
 
 
 
 
 
U.S. Qualified
 
U.S. Supplemental
(Non-Qualified)
 
International
 
Postretirement
Plans
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

Actuarial losses(a)
 
$
(4,530
)
 
$
(4,272
)
 
$
(538
)
 
$
(419
)
 
$
(2,629
)
 
$
(1,979
)
 
$
(502
)
 
$
(523
)
Prior service (costs)/credits
 
(27
)
 
(33
)
 
2

 
4

 
40

 
29

 
1,392

 
1,415

Total
 
$
(4,558
)
 
$
(4,305
)
 
$
(536
)
 
$
(415
)
 
$
(2,589
)
 
$
(1,949
)
 
$
889

 
$
892

(a) 
The accumulated actuarial losses primarily represent the impact of changes in discount rates and other assumptions that result in cumulative changes in our projected benefit obligations, as well as the cumulative difference between the expected return and actual return on plan assets. These accumulated actuarial losses are recognized in Accumulated other comprehensive loss and are amortized into net periodic benefit costs primarily over the average remaining service period for active participants, using the corridor approach. The average amortization periods to be utilized for 2017 are 8.2 years for our U.S. qualified plans, 8.1 years for our U.S. supplemental (non-qualified) plans, 19.3 years for our international plans, and 9.1 years for our postretirement plans.
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets
The following table provides information related to the funded status of selected benefit plans:
 
 
As of December 31,
 
 
Pension Plans
 
 
U.S. Qualified
 
U.S. Supplemental (Non-Qualified)
 
International
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

Pension plans with an ABO in excess of plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
 
$
12,556

 
$
11,633

 
$
—

 
$
—

 
$
4,625

 
$
976

ABO
 
15,422

 
14,755

 
1,410

 
1,324

 
6,558

 
2,495

Pension plans with a PBO in excess of plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
 
12,556

 
11,633

 
—

 
—

 
4,936

 
1,546

PBO
 
15,547

 
14,926

 
1,450

 
1,343

 
7,244

 
3,373
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets
The following table provides information related to the funded status of selected benefit plans:
 
 
As of December 31,
 
 
Pension Plans
 
 
U.S. Qualified
 
U.S. Supplemental (Non-Qualified)
 
International
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2016

 
2015

 
2016

 
2015

Pension plans with an ABO in excess of plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
 
$
12,556

 
$
11,633

 
$
—

 
$
—

 
$
4,625

 
$
976

ABO
 
15,422

 
14,755

 
1,410

 
1,324

 
6,558

 
2,495

Pension plans with a PBO in excess of plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
 
12,556

 
11,633

 
—

 
—

 
4,936

 
1,546

PBO
 
15,547

 
14,926

 
1,450

 
1,343

 
7,244

 
3,373
Schedule of Allocation of Plan Assets
The following table provides the components of plan assets:
  
 
  
 
Fair Value(a)
 
 
 
  
 
Fair Value(a)
 
 
(MILLIONS OF DOLLARS)
 
As of December 31, 2016

 
Level 1
 
Level 2
 
Level 3
 
Assets Measured at NAV(b)

 
As of December 31, 2015

 
Level 1
 
Level 2
 
Level 3
 
Assets Measured at NAV(b)

U.S. qualified pension plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
672

 
$
92

 
$
580

 
$
—

 
$
—

 
$
417

 
$
81

 
$
336

 
$
—

 
$
—

Equity securities:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Global equity securities
 
3,970

 
3,943

 
27

 
—

 
—

 
3,720

 
3,717

 
2

 
1

 
—

Equity commingled funds
 
1,062

 
—

 
772

 
—

 
290

 
951

 
—

 
689

 
—

 
262

Fixed income securities:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Corporate debt securities
 
3,232

 
14

 
3,217

 
1

 
—

 
2,866

 
3

 
2,861

 
2

 
—

Government and government agency obligations
 
1,060

 
—

 
1,060

 
—

 
—

 
989

 
—

 
989

 
—

 
—

Fixed income commingled funds
 
92

 
—

 
—

 
—

 
92

 
222

 
—

 
57

 
—

 
165

Other investments:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Partnership investments(c)
 
1,093

 
—

 
—

 
—

 
1,093

 
1,120

 
—

 
—

 
—

 
1,120

Insurance contracts
 
235

 
—

 
235

 
—

 
—

 
259

 
—

 
259

 
—

 
—

Other commingled funds(d)
 
1,140

 
—

 
—

 
—

 
1,140

 
1,089

 
—

 
—

 
—

 
1,089

Total
 
12,556

 
4,049

 
5,891

 
1

 
2,615

 
11,633

 
3,801

 
5,193

 
3

 
2,636

International pension plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
439

 
38

 
401

 
—

 
—

 
207

 
14

 
193

 
—

 
—

Equity securities:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Global equity securities
 
174

 
163

 
11

 
—

 
—

 
901

 
816

 
85

 
—

 
—

Equity commingled funds
 
2,490

 
—

 
1,265

 
—

 
1,224

 
2,218

 
16

 
854

 
—

 
1,348

Fixed income securities:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Corporate debt securities
 
489

 
—

 
474

 
—

 
15

 
653

 
171

 
469

 
—

 
12

Government and government agency obligations
 
853

 
—

 
786

 
—

 
67

 
1,224

 
109

 
1,048

 
—

 
67

Fixed income commingled funds
 
1,750

 
—

 
1,174

 
—

 
576

 
1,216

 
37

 
919

 
—

 
260

Other investments:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Partnership investments(c)
 
32

 
—

 
—

 
—

 
32

 
40

 
—

 
6

 
—

 
33

Insurance contracts
 
272

 
—

 
17

 
254

 
1

 
257

 
—

 
21

 
219

 
17

Other(d)
 
1,185

 
—

 
430

 
324

 
431

 
1,245

 
59

 
370

 
398

 
418

Total
 
7,683

 
201

 
4,558

 
578

 
2,346

 
7,959

 
1,222

 
3,965

 
618

 
2,155

U.S. postretirement plans(e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
—

 
—

 
—

 
—

 
—

 
6

 
—

 
6

 
—

 
—

Equity securities:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Global equity securities
 
—

 
—

 
—

 
—

 
—

 
64

 
64

 
—

 
—

 
—

Equity commingled funds
 
—

 
—

 
—

 
—

 
—

 
16

 
—

 
12

 
—

 
4

Fixed income securities:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Corporate debt securities
 
—

 
—

 
—

 
—

 
—

 
49

 
—

 
49

 
—

 
—

Government and government agency obligations
 
—

 
—

 
—

 
—

 
—

 
17

 
—

 
17

 
—

 
—

Fixed income commingled funds
 
—

 
—

 
—

 
—

 
—

 
4

 
—

 
1

 
—

 
3

Other investments:
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

Partnership investments(c)
 
—

 
—

 
—

 
—

 
—

 
19

 
—

 
—

 
—

 
19

Insurance contracts
 
458

 
—

 
458

 
—

 
—

 
429

 
—

 
429

 
—

 
—

Other commingled funds(d)
 
—

 
—

 
—

 
—

 
—

 
19

 
—

 
—

 
—

 
19

Total
 
$
458

 
$
—

 
$
458

 
$
—

 
$
—

 
$
622

 
$
64

 
$
514

 
$
—

 
$
45

(a) 
Fair values are determined based on valuation inputs categorized as Level 1, 2 or 3 (see Note 1E).
(b) 
In accordance with the provisions of a new accounting standard we adopted on January 1, 2016, described below, certain investments that are measured at NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The NAV amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets. As a result, a reclassification has been made to the prior year’s plan asset classification table to conform to the current year’s presentation.
(c) 
Primarily includes investments in private equity, private debt, public equity limited partnerships, and, to a lesser extent, real estate and venture capital.
(d) 
Primarily includes, for U.S. plan assets, investments in hedge funds and, to a lesser extent, real estate and, for international plan assets, investments in real estate and hedge funds.
(e) 
Reflects postretirement plan assets, which support a portion of our U.S. retiree medical plans.
The following table provides the long-term target asset allocations ranges and the percentage of the fair value of plan assets for benefit plans:
  
 
As of December 31,
  
 
Target
Allocation Percentage

 
Percentage of Plan Assets
(PERCENTAGES)
 
2016

 
2016

 
2015

U.S. qualified pension plans
 
 
 
 
 
 
Cash and cash equivalents
 
0-10%

 
5.3
%
 
3.6
%
Equity securities
 
35-55%

 
40.1
%
 
40.2
%
Fixed income securities
 
30-55%

 
34.9
%
 
35
%
Other investments(a)
 
5-17.5%

 
19.7
%
 
21.2
%
Total
 
100
%
 
100
%
 
100
%
International pension plans
 
 
 
 
 
 
Cash and cash equivalents
 
0-10%

 
5.7
%
 
2.6
%
Equity securities
 
25-50%

 
34.7
%
 
39.2
%
Fixed income securities
 
30-55%

 
40.2
%
 
38.8
%
Other investments
 
10-30%

 
19.4
%
 
19.4
%
Total
 
100
%
 
100
%
 
100
%
U.S. postretirement plans
 
 
 
 
 
 
Cash and cash equivalents
 
0-5%

 
—

 
1.0
%
Equity securities
 
—

 
—

 
12.8
%
Fixed income securities
 
—

 
—

 
11.2
%
Other investments
 
95-100%

 
100
%
 
75
%
Total
 
100
%
 
100
%
 
100
%
(a) 
Actual percentage of plan assets in Other investments for 2016 includes $235 million (this amount was $259 million in 2015) related to a group fixed annuity insurance contract that was executed by legacy Wyeth for certain members of its defined benefit plans prior to Pfizer acquiring the company in 2009, and $144 million (this amount was $129 million in 2015) related to an investment in a partnership whose primary holdings are public equity securities. 
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets
The following table provides an analysis of the changes in our more significant investments valued using significant unobservable inputs:
 
 
Year Ended December 31,
 
 
International Pension Plans
 
 
Insurance contracts
 
Other
(MILLIONS OF DOLLARS)
 
2016

 
2015

 
2016

 
2015

Fair value, beginning(a)
 
$
219

 
$
254

 
$
398

 
$
395

Actual return on plan assets:
 
 
 

 

 

Assets held, ending
 
11

 
16

 
(1
)
 
30

Assets sold during the period
 
—

 
—

 
6

 
13

Purchases, sales and settlements, net
 
20

 
(19
)
 
(18
)
 
(21
)
Exchange rate changes
 
4

 
(33
)
 
(61
)
 
(19
)
Fair value, ending
 
$
254

 
$
219

 
$
324

 
$
398


(a) 
We adopted a new accounting standard as of January 1, 2016 whereby certain investments in 2016 and 2015 that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified as Level 1, 2 or 3 in the above fair value hierarchy table, but are included in the total. As a result, a reclassification has been made to the prior year's plan asset classification table to conform to the current year's presentation.
Schedule of Expected Future Cash Flow Information
The following table provides the expected future cash flow information related to our benefit plans:
  
 
Pension Plans
 
 
(MILLIONS OF DOLLARS)
 
U.S. Qualified
 
U.S. Supplemental
(Non-Qualified)
 
International
 
Postretirement Plans

Expected employer contributions:
 
 
 
 
 
 
 
 
2017(a)
 
$
1,160

 
$
152

 
$
175

 
$
179

Expected benefit payments:
 
 
 
 
 
 
 
 
2017
 
$
1,519

 
$
152

 
$
331

 
$
186

2018
 
1,058

 
128

 
333

 
196

2019
 
947

 
118

 
335

 
198

2020
 
952

 
119

 
350

 
197

2021
 
930

 
112

 
356

 
196

2022–2026
 
4,391

 
503

 
1,867

 
919

(a) 
For the U.S. qualified plans, the $1.0 billion voluntary contribution, which was considered pre-funding for future anticipated mandatory contributions and is also expected to reduce Pension Benefit Guaranty Corporation variable rate premiums, was paid in January 2017.