RETIREMENT BENEFITS

Pension and Postretirement Plans

The Company has several non-contributory defined benefit pension plans covering certain U.S. employees and has various defined benefit pension and termination indemnity plans covering employees outside the U.S.

The U.S. qualified defined benefit plan was frozen effective January 1, 2008 for most employees. Accordingly, no additional compensation-based contributions have been credited to the cash balance portion of the plan for existing plan participants after 2007. However, certain employees covered under the prior final pay plan formula continue to accrue benefits. The Company also offers postretirement health care and life insurance benefits to certain eligible U.S. retired employees, as well as to certain eligible employees outside the U.S.

The Company also sponsors a number of non-contributory, nonqualified pension plans. These plans, which are unfunded, provide supplemental defined pension benefits to certain U.S. employees. With the exception of certain employees covered under the prior final pay plan formula, the benefits under these plans were frozen in prior years.

The plan obligations, plan assets and periodic plan expense for the Company’s most significant pension and postretirement benefit plans (Significant Plans) are measured and disclosed quarterly, instead of annually. The Significant Plans captured approximately 90% of the Company’s global pension and postretirement plan obligations as of December 31, 2018. All other plans (All Other Plans) are measured annually with a December 31 measurement date.

Net (Benefit) Expense

The following table summarizes the components of net (benefit) expense recognized in the Consolidated Statement of Income for the Company’s pension and postretirement plans, for Significant Plans and All Other Plans:



	Pension plans																		Postretirement benefit plans
	U.S. plans									Non-U.S. plans									U.S. plans									Non-U.S. plans
In millions of dollars	2018			2017			2016			2018			2017			2016			2018			2017			2016			2018			2017			2016
Benefits earned during the year	$	1		$	3		$	4		$	146		$	153		$	154		$	—		$	—		$	—		$	9		$	9		$	10
Interest cost on benefit obligation	514			533			548			292			295			282			26			26			25			102			101			94
Expected return on plan assets	(844		)	(865		)	(886		)	(291		)	(299		)	(287		)	(14		)	(6		)	(9		)	(88		)	(89		)	(86		)
Amortization of unrecognized
Prior service cost (benefit)	2			2			2			(4		)	(3		)	(1		)	—			—			—			(10		)	(10		)	(10		)
Net actuarial loss (gain)	165			173			169			53			61			69			(1		)	—			(1		)	29			35			30
Curtailment loss (gain)⁽¹⁾	1			6			13			(1		)	—			(2		)	—			—			—			—			—			—
Settlement loss⁽¹⁾	—			—			—			7			12			6			—			—			—			—			—			—
Total net (benefit) expense	$	(161	)	$	(148	)	$	(150	)	$	202		$	219		$	221		$	11		$	20		$	15		$	42		$	46		$	38


(1)	Losses and gains due to curtailment and settlement relate to repositioning and divestiture actions.

Contributions

The Company’s funding practice for U.S. and non-U.S. pension and postretirement plans is generally to fund to minimum funding requirements in accordance with applicable local laws and regulations. The Company may increase its contributions above the minimum required contribution, if appropriate. In addition, management has the ability to change its funding practices. For the U.S. pension plans, there were no required minimum cash contributions for 2018 or 2017.

The following table summarizes the actual Company contributions for the years ended December 31, 2018 and 2017, as well as estimated expected Company contributions for 2019. Expected contributions are subject to change, since contribution decisions are affected by various factors, such as market performance, tax considerations and regulatory requirements.



	Pension plans⁽¹⁾												Postretirement benefit plans⁽¹⁾
	U.S. plans⁽²⁾						Non-U.S. plans						U.S. plans						Non-U.S. plans
In millions of dollars	2019		2018		2017		2019		2018		2017		2019		2018		2017		2019		2018		2017
Contributions made by the Company	$	—	$	—	$	50	$	97	$	140	$	90	$	—	$	145	$	140	$	4	$	3	$	4
Benefits paid directly by the Company	57		55		55		47		42		45		6		5		36		6		6		5


(1)	Amounts reported for 2019 are expected amounts.


(2)	The U.S. pension plans include benefits paid directly by the Company for the nonqualified pension plans.

Funded Status and Accumulated Other Comprehensive Income (AOCI)

The following tables summarize the funded status and amounts recognized in the Consolidated Balance Sheet for the Company’s pension and postretirement plans:



	Pension plans												Postretirement benefit plans
	U.S. plans						Non-U.S. plans						U.S. plans						Non-U.S. plans
In millions of dollars	2018			2017			2018			2017			2018			2017			2018			2017
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	14,040		$	14,000		$	7,433		$	6,522		$	699		$	686		$	1,261		$	1,141
Benefits earned during the year	1			3			146			153			—			—			9			9
Interest cost on benefit obligation	514			533			292			295			26			26			102			101
Plan amendments	—			—			7			4			—			—			—			—
Actuarial (gain) loss	(1,056		)	536			(99		)	127			(1		)	43			(123		)	19
Benefits paid, net of participants’ contributions and government subsidy⁽¹⁾	(845		)	(769		)	(293		)	(278		)	(62		)	(56		)	(68		)	(64		)
Divestitures	—			—			—			(29		)	—			—			—			(4		)
Settlement gain⁽²⁾	—			—			(121		)	(192		)	—			—			—			—
Curtailment loss (gain)⁽²⁾	1			6			(1		)	(3		)	—			—			—			—
Foreign exchange impact and other⁽³⁾	—			(269		)	(215		)	834			—			—			(22		)	59
Projected benefit obligation at year end	$	12,655		$	14,040		$	7,149		$	7,433		$	662		$	699		$	1,159		$	1,261
Change in plan assets
Plan assets at fair value at beginning of year	$	12,725		$	12,363		$	7,128		$	6,149		$	262		$	129		$	1,119		$	1,015
Actual return on plan assets	(445		)	1,295			(11		)	462			(5		)	13			(26		)	113
Company contributions	55			105			182			135			150			176			9			9
Benefits paid, net of participants’ contributions and government subsidy⁽¹⁾	(845		)	(769		)	(293		)	(278		)	(62		)	(56		)	(68		)	(64		)
Divestitures	—			—			—			(31		)	—			—			—			—
Settlement⁽²⁾	—			—			(121		)	(192		)	—			—			—			—
Foreign exchange impact and other⁽³⁾	—			(269		)	(186		)	883			—			—			2			46
Plan assets at fair value at year end	$	11,490		$	12,725		$	6,699		$	7,128		$	345		$	262		$	1,036		$	1,119
Funded status of the plans
Qualified plans⁽⁴⁾	$	(483	)	$	(565	)	$	(450	)	$	(305	)	$	(317	)	$	(437	)	$	(123	)	$	(142	)
Nonqualified plans⁽⁵⁾	(682		)	(750		)	—			—			—			—			—			—
Funded status of the plans at year end	$	(1,165	)	$	(1,315	)	$	(450	)	$	(305	)	$	(317	)	$	(437	)	$	(123	)	$	(142	)
Net amount recognized
Qualified plans
Benefit asset	$	—		$	—		$	806		$	900		$	—		$	—		$	175		$	181
Benefit liability	(483		)	(565		)	(1,256		)	(1,205		)	(317		)	(437		)	(298		)	(323		)
Qualified plans	$	(483	)	$	(565	)	$	(450	)	$	(305	)	$	(317	)	$	(437	)	$	(123	)	$	(142	)
Nonqualified plans	(682		)	(750		)	—			—			—			—			—			—
Net amount recognized on the balance sheet	$	(1,165	)	$	(1,315	)	$	(450	)	$	(305	)	$	(317	)	$	(437	)	$	(123	)	$	(142	)
Amounts recognized in AOCI
Net transition obligation	$	—		$	—		$	(1	)	$	(1	)	$	—		$	—		$	—		$	—
Prior service benefit	(13		)	(15		)	12			22			—			—			83			92
Net actuarial (loss) gain	(6,892		)	(6,823		)	(1,420		)	(1,318		)	53			72			(340		)	(382		)
Net amount recognized in equity (pretax)	$	(6,905	)	$	(6,838	)	$	(1,409	)	$	(1,297	)	$	53		$	72		$	(257	)	$	(290	)

Accumulated benefit obligation at year end	$	12,646		$	14,034		$	6,720		$	7,038		$	662		$	699		$	1,159		$	1,261


(1)	U.S. Postretirement benefit plans was net of Employer Group Waiver Plan subsidy of $15 million in 2018 and 2017.


(2)	Curtailment and settlement (gains) losses relate to repositioning and divestiture activities.


(3)	With respect to the U.S. Plan, de-risking activities during 2017 resulted in a reduction to plan obligations and assets.


(4)	The U.S. qualified pension plan is fully funded under specified Employee Retirement Income Security Act (ERISA) funding rules as of January 1, 2019 and no minimum required funding is expected for 2019.


(5)	The nonqualified plans of the Company are unfunded.

The following table shows the change in AOCI related to the Company’s pension, postretirement and post employment plans:



In millions of dollars	2018			2017			2016
Beginning of year balance, net of tax⁽¹⁾⁽²⁾	$	(6,183	)	$	(5,164	)	$	(5,116	)
Actuarial assumptions changes and plan experience	1,288			(760		)	(854		)
Net asset (loss) gain due to difference between actual and expected returns	(1,732		)	625			400
Net amortization	214			229			232
Prior service (cost) credit	(7		)	(4		)	28
Curtailment/settlement gain⁽³⁾	7			17			17
Foreign exchange impact and other	136			(93		)	99
Impact of Tax Reform⁽⁴⁾	—			(1,020		)	—
Change in deferred taxes, net	20			(13		)	30
Change, net of tax	$	(74	)	$	(1,019	)	$	(48	)
End of year balance, net of tax⁽¹⁾⁽²⁾	$	(6,257	)	$	(6,183	)	$	(5,164	)


(1)	See Note 19 to the Consolidated Financial Statements for further discussion of net AOCI balance.


(2)	Includes net-of-tax amounts for certain profit sharing plans outside the U.S.


(3)	Curtailment and settlement relate to repositioning and divestiture activities.


(4)	In the fourth quarter of 2017, Citi adopted ASU 2018-02, which transferred these amounts from AOCI to Retained earnings. See Note 1 to the Consolidated Financial Statements.

At December 31, 2018 and 2017, the aggregate projected benefit obligation (PBO), the aggregate accumulated benefit obligation (ABO) and the aggregate fair value of plan assets are presented for all defined benefit pension plans with a PBO in excess of plan assets and for all defined benefit pension plans with an ABO in excess of plan assets as follows:



	PBO exceeds fair value of plan assets								ABO exceeds fair value of plan assets
	U.S. plans⁽¹⁾				Non-U.S. plans				U.S. plans⁽¹⁾				Non-U.S. plans
In millions of dollars	2018		2017		2018		2017		2018		2017		2018		2017
Projected benefit obligation	$	12,655	$	14,040	$	3,904	$	2,721	$	12,655	$	14,040	$	3,718	$	2,596
Accumulated benefit obligation	12,646		14,034		3,528		2,381		12,646		14,034		3,387		2,296
Fair value of plan assets	11,490		12,725		2,648		1,516		11,490		12,725		2,478		1,407


(1)	At December 31, 2018 and 2017, for both the U.S. qualified plan and nonqualified plans, the aggregate PBO and the aggregate ABO exceeded plan assets.

Plan Assumptions

The Company utilizes a number of assumptions to determine plan obligations and expenses. Changes in one or a combination of these assumptions will have an impact on the Company’s pension and postretirement PBO, funded status and (benefit) expense. Changes in the plans’ funded status resulting from changes in the PBO and fair value of plan assets will have a corresponding impact on Accumulated other comprehensive income (loss).

The actuarial assumptions at the respective years ended December 31 in the table below are used to measure the year-end PBO and the net periodic (benefit) expense for the subsequent year (period). Since Citi’s Significant Plans are measured on a quarterly basis, the year-end rates for those plans are used to calculate the net periodic (benefit) expense for the subsequent year’s first quarter. As a result of the quarterly measurement process, the net periodic (benefit) expense for the Significant Plans is calculated at each respective quarter end based on the preceding quarter-end rates (as shown below for the U.S. and non-U.S. pension and postretirement plans). The actuarial assumptions for All Other Plans are measured annually.

Certain assumptions used in determining pension and postretirement benefit obligations and net benefit expense for the Company’s plans are shown in the following table:



At year end	2018	2017
Discount rate
U.S. plans
Qualified pension	4.25%	3.60%
Nonqualified pension	4.25	3.60
Postretirement	4.20	3.50
Non-U.S. pension plans
Range	0.25 to 12.00	0.00 to 10.20
Weighted average	4.47	4.17
Non-U.S. postretirement plans
Range	1.75 to 10.75	1.75 to 10.10
Weighted average	9.05	8.10
Future compensation increase rate⁽¹⁾
Non-U.S. pension plans
Range	1.30 to 13.67	1.17 to 13.67
Weighted average	3.16	3.08
Expected return on assets
U.S. plans
Qualified pension	6.70	6.80
Postretirement⁽²⁾	6.70/3.00	6.80/3.00
Non-U.S. pension plans
Range	1.00 to 11.50	0.00 to 11.50
Weighted average	4.30	4.52
Non-U.S. postretirement plans
Range	8.00 to 9.20	8.00 to 9.80
Weighted average	8.01	8.01


(1)	Not material for U.S. plans.


(2)	The expected rate of return for the VEBA Trust was 3.00%.



During the year	2018	2017	2016
Discount rate
U.S. plans
Qualified pension	3.60%/3.95%/ 4.25%/4.30%	4.10%/4.05%/ 3.80%/3.75%	4.40%/3.95%/ 3.65%/3.55%
Nonqualified pension	3.60/3.95/ 4.25/4.30	4.00/3.95/ 3.75/3.65	4.35/3.90/ 3.55/3.45
Postretirement	3.50/3.90/ 4.20/4.20	3.90/3.85/ 3.60/3.55	4.20/3.75/ 3.40/3.30
Non-U.S. pension plans⁽¹⁾
Range	0.00 to 10.75	0.25 to 72.50	0.25 to 42.00
Weighted average	4.17	4.40	4.76
Non-U.S. postretirement plans⁽¹⁾
Range	1.75 to 10.10	1.75 to 11.05	2.00 to 13.20
Weighted average	8.10	8.27	7.90
Future compensation increase rate⁽²⁾
Non-U.S. pension plans⁽¹⁾
Range	1.17 to 13.67	1.25 to 70.00	1.00 to 40.00
Weighted average	3.08	3.21	3.24
Expected return on assets
U.S. plans
Qualified pension⁽³⁾	6.80/6.70	6.80	7.00
Postretirement⁽³⁾⁽⁴⁾	6.80/6.70/3.00	6.80	7.00
Non-U.S. pension plans⁽¹⁾
Range	0.00 to 11.60	1.00 to 11.50	1.60 to 11.50
Weighted average	4.52	4.55	4.95
Non-U.S. postretirement plans⁽¹⁾
Range	8.00 to 9.80	8.00 to 10.30	8.00 to 10.70
Weighted average	8.01	8.02	8.01


(1)	Reflects rates utilized to determine the quarterly expense for Significant non-U.S. pension and postretirement plans.


(2)	Not material for U.S. plans.


(3)	The expected rate of return for the U.S. pension and postretirement plans was lowered from 6.80% to 6.70% effective in the second quarter of 2018 to reflect a change in target asset allocation.


(4)	In 2017, the VEBA Trust was funded with an expected rate of return on assets of 3.00%.

Discount Rate

The discount rates for the U.S. pension and postretirement plans were selected by reference to a Citigroup-specific analysis using each plan’s specific cash flows and compared with high-quality corporate bond indices for reasonableness. The discount rates for the non-U.S. pension and postretirement plans are selected by reference to high-quality corporate bond rates in countries that have developed corporate bond markets. However, where developed corporate bond markets do not exist, the discount rates are selected by reference to local government bond rates with a premium added to reflect the additional risk for corporate bonds in certain countries.

The established rounding convention is to the nearest 5 bps for the top five non-U.S. countries, and 25 bps for all other countries.

Expected Rate of Return

The Company determines its assumptions for the expected rate of return on plan assets for its U.S. pension and postretirement plans using a “building block” approach, which focuses on ranges of anticipated rates of return for each asset class. A weighted average range of nominal rates is then determined based on target allocations to each asset class. Market performance over a number of earlier years is evaluated covering a wide range of economic conditions to determine whether there are sound reasons for projecting any past trends.

The Company considers the expected rate of return to be a long-term assessment of return expectations and does not anticipate changing this assumption unless there are significant changes in investment strategy or economic conditions. This contrasts with the selection of the discount rate and certain other assumptions, which are reconsidered annually (or quarterly for the Significant Plans) in accordance with GAAP.

The expected rate of return for the U.S. pension and postretirement plans was 6.70% at December 31, 2018 and 6.80% at December 31, 2017 and 2016. The expected return on assets reflects the expected annual appreciation of the plan assets and reduces the Company’s annual pension expense. The expected return on assets is deducted from the sum of service cost, interest cost and other components of pension expense to arrive at the net pension (benefit) expense. Net pension (benefit) expense for the U.S. pension plans for 2018, 2017 and 2016 reflects deductions of $844 million, $865 million and $886 million of expected returns, respectively.

The following table shows the expected rates of return used in determining the Company’s pension expense compared to the actual rate of return on plan assets during 2018, 2017 and 2016 for the U.S. pension and postretirement plans:



U.S. plans	2018	2017	2016
Expected rate of return
U.S. pension and postretirement trust	6.80%/6.70%	6.80%	7.00%
VEBA trust⁽¹⁾	3.00	3.00	—
Actual rate of return⁽²⁾
U.S. pension and postretirement trust	-3.40	10.90	4.90
VEBA trust⁽¹⁾	0.43 to 1.41	—	—


(1)	In December 2017, the VEBA Trust was funded for postretirement benefits with an expected rate of return on assets of 3.00%.


(2)	Actual rates of return are presented net of fees.

For the non-U.S. pension plans, pension expense for 2018 was reduced by the expected return of $291 million, compared with the actual return of $(11) million. Pension expense for 2017 and 2016 was reduced by expected returns of $299 million and $287 million, respectively.

Mortality Tables

At December 31, 2018, the Company maintained the Retirement Plan 2014 (RP-2014) mortality table and adopted the Mortality Projection 2018 (MP-2018) projection table for the U.S. plans.



U.S. plans	2018⁽¹⁾	2017⁽²⁾
Mortality
Pension	RP-2014/MP-2018	RP-2014/MP-2017
Postretirement	RP-2014/MP-2018	RP-2014/MP-2017


(1)	The RP-2014 table is the white-collar RP-2014 table. The MP-2018 projection scale is projected from 2006, with convergence to 0.75% ultimate rate of annual improvement by 2034.


(2)	The RP-2014 table is the white-collar RP-2014 table, The MP-2017 projection scale is projected from 2006, with convergence to 0.75% ultimate rate of annual improvement by 2033.

Sensitivities of Certain Key Assumptions

The following tables summarize the effect on pension expense of a one-percentage-point change in the discount rate:



	One-percentage-point increase
In millions of dollars	2018			2017			2016
U.S. plans	$	25		$	29		$	31
Non-U.S. plans	(22		)	(27		)	(33		)
	One-percentage-point decrease
In millions of dollars	2018			2017			2016
U.S. plans	$	(37	)	$	(44	)	$	(47	)
Non-U.S. plans	32			41			37

Since the U.S. qualified pension plan was frozen, most of the prospective service cost has been eliminated and the gain/loss amortization period was changed to the life expectancy for inactive participants. As a result, pension expense for the U.S. qualified pension plan is driven more by interest costs than service costs, and an increase in the discount rate would increase pension expense, while a decrease in the discount rate would decrease pension expense.

The following tables summarize the effect on pension expense of a one-percentage-point change in the expected rates of return:



	One-percentage-point increase
In millions of dollars	2018			2017			2016
U.S. plans	$	(126	)	$	(127	)	$	(127	)
Non-U.S. plans	(64		)	(64		)	(61		)
	One-percentage-point decrease
In millions of dollars	2018			2017			2016
U.S. plans	$	126		$	127		$	127
Non-U.S. plans	64			64			61

Health Care Cost Trend Rate

Assumed health care cost trend rates were as follows:



	2018	2017
Health care cost increase rate for U.S. plans
Following year	7.00%	6.50%
Ultimate rate to which cost increase is assumed to decline	5.00	5.00
Year in which the ultimate rate is reached	2027	2023

Health care cost increase rate for Non-U.S. plans (weighted average)
Following year	6.90%	6.87%
Ultimate rate to which cost increase is assumed to decline	6.90	6.87
Range of years in which the ultimate rate is reached	2019	2018–2019

Interest Crediting Rate

The Company has cash balance plans and other plans with promised interest crediting rates. For these plans, the interest crediting rates are set in line with plan rules or country legislation and do not change with market conditions.



	Weighted average interest crediting rate
At year end	2018	2017	2016
U.S. plans	3.25%	2.60%	3.10%
Non-U.S. plans	1.68	1.74	1.75

Plan Assets

Citigroup’s pension and postretirement plans’ asset allocations for the U.S. plans and the target allocations by asset category based on asset fair values, are as follows:



	Target asset allocation	U.S. pension assets at December 31,				U.S. postretirement assets at December 31,
Asset category⁽¹⁾	2019	2018		2017		2018		2017
Equity securities⁽²⁾	0–26%	15	%	20	%	15	%	20	%
Debt securities⁽³⁾	35–82	57		48		57		48
Real estate	0–7	5		5		5		5
Private equity	0–10	3		3		3		3
Other investments	0–30	20		24		20		24
Total		100	%	100	%	100	%	100	%


(1)	Asset allocations for the U.S. plans are set by investment strategy, not by investment product. For example, private equities with an underlying investment in real estate are classified in the real estate asset category, not private equity.


(2)	Equity securities in the U.S. pension and postretirement plans do not include any Citigroup common stock at the end of 2018 and 2017.


(3)	The VEBA Trust for postretirement benefits are primarily invested in debt securities which are not reflected in the table above.

Third-party investment managers and advisors provide their services to Citigroup’s U.S. pension and postretirement plans. Assets are rebalanced as the Company’s Pension Plan Investment Committee deems appropriate. Citigroup’s investment strategy, with respect to its assets, is to maintain a globally diversified investment portfolio across several asset classes that, when combined with Citigroup’s contributions to

the plans, will maintain the plans’ ability to meet all required benefit obligations.

Citigroup’s pension and postretirement plans’ weighted-average asset allocations for the non-U.S. plans and the actual ranges, and the weighted-average target allocations by asset category based on asset fair values, are as follows:



	Non-U.S. pension plans
	Target asset allocation	Actual range at December 31,		Weighted-average at December 31,
Asset category⁽¹⁾	2019	2018	2017	2018		2017
Equity securities	0–63%	0–66%	0–67%	13	%	15	%
Debt securities	0–100	0–100	0–99	80		79
Real estate	0–15	0–12	0–18	1		1
Other investments	0–100	0–100	0–100	6		5
Total				100	%	100	%


(1)	Similar to the U.S. plans, asset allocations for certain non-U.S. plans are set by investment strategy, not by investment product.



	Non-U.S. postretirement plans
	Target asset allocation	Actual range at December 31,		Weighted-average at December 31,
Asset category⁽¹⁾	2019	2018	2017	2018		2017
Equity securities	0–30%	0–35%	0–38%	35	%	38	%
Debt securities	64–100	62–100	58–100	62		58
Other investments	0–6	0–3	0–4	3		4
Total				100	%	100	%


(1)	Similar to the U.S. plans, asset allocations for certain non-U.S. plans are set by investment strategy, not by investment product.

Fair Value Disclosure

For information on fair value measurements, including descriptions of Levels 1, 2 and 3 of the fair value hierarchy and the valuation methodology utilized by the Company, see Notes 1 and 24 to the Consolidated Financial Statements. ASU 2015-07 removed the requirement to categorize within the fair value hierarchy investments for which fair value is measured using the NAV per share practical expedient.

Certain investments may transfer between the fair value hierarchy classifications during the year due to changes in valuation methodology and pricing sources.

Plan assets by detailed asset categories and the fair value hierarchy are as follows:



	U.S. pension and postretirement benefit plans⁽¹⁾
In millions of dollars	Fair value measurement at December 31, 2018
Asset categories	Level 1			Level 2			Level 3		Total
U.S. equities	$	625		$	—		$	—	$	625
Non-U.S. equities	481			—			—		481
Mutual funds and other registered investment companies	215			—			—		215
Commingled funds	—			1,344			—		1,344
Debt securities	1,346			3,475			—		4,821
Annuity contracts	—			—			1		1
Derivatives	16			252			—		268
Other investments	—			—			127		127
Total investments	$	2,683		$	5,071		$	128	$	7,882
Cash and short-term investments	$	93		$	865		$	—	$	958
Other investment liabilities	(100		)	(254		)	—		(354		)
Net investments at fair value	$	2,676		$	5,682		$	128	$	8,486
Other investment receivables redeemed at NAV									$	80
Securities valued at NAV									3,269
Total net assets									$	11,835


(1)	The investments of the U.S. pension and postretirement plans are commingled in one trust. At December 31, 2018, the allocable interests of the U.S. pension and postretirement plans were 98.0% and 2.0%, respectively. The investments of the VEBA Trust for the postretirement benefits are reflected in the above table.



	U.S. pension and postretirement benefit plans⁽¹⁾
In millions of dollars	Fair value measurement at December 31, 2017
Asset categories	Level 1			Level 2			Level 3		Total
U.S. equities	$	726		$	—		$	—	$	726
Non-U.S. equities	821			—			—		821
Mutual funds and other registered investment companies	376			—			—		376
Commingled funds	—			1,184			—		1,184
Debt securities	1,381			3,080			—		4,461
Annuity contracts	—			—			1		1
Derivatives	11			323			—		334
Other investments	—			—			148		148
Total investments	$	3,315		$	4,587		$	149	$	8,051
Cash and short-term investments	$	257		$	1,004		$	—	$	1,261
Other investment liabilities	(60		)	(343		)	—		(403		)
Net investments at fair value	$	3,512		$	5,248		$	149	$	8,909
Other investment receivables redeemed at NAV									$	16
Securities valued at NAV									4,062
Total net assets									$	12,987


(1)	The investments of the U.S. pension and postretirement plans are commingled in one trust. At December 31, 2017, the allocable interests of the U.S. pension and postretirement plans were 99.0% and 1.0%, respectively. The investments of the VEBA Trust for the postretirement benefits are reflected in the above table.



	Non-U.S. pension and postretirement benefit plans
In millions of dollars	Fair value measurement at December 31, 2018
Asset categories	Level 1			Level 2			Level 3		Total
U.S. equities	$	4		$	9		$	—	$	13
Non-U.S. equities	100			100			—		200
Mutual funds and other registered investment companies	2,887			63			—		2,950
Commingled funds	21			—			—		21
Debt securities	5,145			1,500			9		6,654
Real estate	—			3			1		4
Annuity contracts	—			1			10		11
Derivatives	—			156			—		156
Other investments	1			—			210		211
Total investments	$	8,158		$	1,832		$	230	$	10,220
Cash and short-term investments	$	91		$	3		$	—	$	94
Other investment liabilities	(1		)	(2,589		)	—		(2,590		)
Net investments at fair value	$	8,248		$	(754	)	$	230	$	7,724
Securities valued at NAV									$	11
Total net assets									$	7,735



	Non-U.S. pension and postretirement benefit plans
In millions of dollars	Fair value measurement at December 31, 2017
Asset categories	Level 1			Level 2			Level 3		Total
U.S. equities	$	4		$	12		$	—	$	16
Non-U.S. equities	103			122			1		226
Mutual funds and other registered investment companies	3,098			74			—		3,172
Commingled funds	24			—			—		24
Debt securities	3,999			1,555			7		5,561
Real estate	—			3			1		4
Annuity contracts	—			1			9		10
Derivatives	1			3,102			—		3,103
Other investments	1			—			214		215
Total investments	$	7,230		$	4,869		$	232	$	12,331
Cash and short-term investments	$	119		$	3		$	—	$	122
Other investment liabilities	(2		)	(4,220		)	—		(4,222		)
Net investments at fair value	$	7,347		$	652		$	232	$	8,231
Securities valued at NAV									$	16
Total net assets									$	8,247

Level 3 Rollforward

The reconciliations of the beginning and ending balances during the year for Level 3 assets are as follows:



In millions of dollars	U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2017		Realized gains (losses)			Unrealized gains (losses)			Purchases, sales and issuances			Transfers in and/or out of Level 3		Ending Level 3 fair value at Dec. 31, 2018
Annuity contracts	$	1	$	—		$	—		$	—		$	—	$	1
Other investments	148		(2		)	(18		)	(1		)	—		127
Total investments	$	149	$	(2	)	$	(18	)	$	(1	)	$	—	$	128



In millions of dollars	U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2016		Realized gains (losses)		Unrealized gains (losses)		Purchases, sales and issuances		Transfers in and/or out of Level 3		Ending Level 3 fair value at Dec. 31, 2017
Annuity contracts	$	1	$	—	$	—	$	—	$	—	$	1
Other investments	129		—		—		19		—		148
Total investments	$	130	$	—	$	—	$	19	$	—	$	149



In millions of dollars	Non-U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2017		Unrealized gains (losses)			Purchases, sales and issuances			Transfers in and/or out of Level 3			Ending Level 3 fair value at Dec. 31, 2018
Non-U.S. equities	$	1	$	—		$	—		$	(1	)	$	—
Debt securities	7		(1		)	3			—			9
Real estate	1		—			—			—			1
Annuity contracts	9		(1		)	1			1			10
Other investments	214		(3		)	(1		)	—			210
Total investments	$	232	$	(5	)	$	3		$	—		$	230



In millions of dollars	Non-U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2016		Unrealized gains (losses)		Purchases, sales and issuances			Transfers in and/or out of Level 3		Ending Level 3 fair value at Dec. 31, 2017
Non-U.S. equities	$	1	$	—	$	—		$	—	$	1
Debt securities	7		—		—			—		7
Real estate	1		—		—			—		1
Annuity contracts	8		1		—			—		9
Other investments	187		31		(4		)	—		214
Total investments	$	204	$	32	$	(4	)	$	—	$	232

Investment Strategy

The Company’s global pension and postretirement funds’ investment strategy is to invest in a prudent manner for the exclusive purpose of providing benefits to participants. The investment strategies are targeted to produce a total return that, when combined with the Company’s contributions to the funds, will maintain the funds’ ability to meet all required benefit obligations. Risk is controlled through diversification of asset types and investments in domestic and international equities, fixed income securities and cash and short-term investments. The target asset allocation in most locations outside the U.S. is primarily in equity and debt securities. These allocations may vary by geographic region and country depending on the nature of applicable obligations and various other regional considerations. The wide variation in the actual range of plan asset allocations for the funded non-U.S. plans is a result of differing local statutory requirements and economic conditions. For example, in certain countries local law requires that all pension plan assets must be invested in fixed income investments, government funds or local-country securities.

Significant Concentrations of Risk in Plan Assets

The assets of the Company’s pension plans are diversified to limit the impact of any individual investment. The U.S. qualified pension plan is diversified across multiple asset classes, with publicly traded fixed income, hedge funds, publicly traded equity and real estate representing the most significant asset allocations. Investments in these four asset classes are further diversified across funds, managers, strategies, vintages, sectors and geographies, depending on the specific characteristics of each asset class. The pension assets for the Company’s non-U.S. Significant Plans are primarily invested in publicly traded fixed income and publicly traded equity securities.

Oversight and Risk Management Practices

The framework for the Company’s pension oversight process includes monitoring of retirement plans by plan fiduciaries and/or management at the global, regional or country level, as appropriate. Independent Risk Management contributes to the risk oversight and monitoring for the Company’s U.S. qualified pension plan and non-U.S. Significant Pension Plans. Although the specific components of the oversight process are tailored to the requirements of each region, country and plan, the following elements are common to the Company’s monitoring and risk management process:


•	periodic asset/liability management studies and strategic asset allocation reviews;


•	periodic monitoring of funding levels and funding ratios;


•	periodic monitoring of compliance with asset allocation guidelines;


•	periodic monitoring of asset class and/or investment manager performance against benchmarks; and


•	periodic risk capital analysis and stress testing.

Estimated Future Benefit Payments

The Company expects to pay the following estimated benefit payments in future years:



	Pension plans				Postretirement benefit plans
In millions of dollars	U.S. plans		Non-U.S. plans		U.S. plans		Non-U.S. plans
2019	$	797	$	435	$	62	$	70
2020	828		417		62		75
2021	847		426		61		80
2022	857		448		59		86
2023	873		471		57		92
2024–2028	4,365		2,557		252		547

Post Employment Plans

The Company sponsors U.S. post employment plans that provide income continuation and health and welfare benefits to certain eligible U.S. employees on long-term disability.

As of December 31, 2018 and 2017, the plans’ funded status recognized in the Company’s Consolidated Balance Sheet was $(32) million and $(46) million, respectively. The pretax amounts recognized in Accumulated other comprehensive income (loss) as of December 31, 2018 and 2017 were $(15) million and $3 million, respectively. The improvement in funded status as of December 31, 2017 was primarily due to the Company’s funding of the VEBA Trust during 2017.

The following table summarizes the components of net expense recognized in the Consolidated Statement of Income for the Company’s U.S. post employment plans:



	Net expense
In millions of dollars	2018			2017			2016
Service-related expense
Interest cost on benefit obligation	$	2		$	2		$	3
Expected return on plan assets	(1		)	—			—
Amortization of unrecognized
Prior service (benefit) cost	(23		)	(31		)	(31		)
Net actuarial loss	2			2			5
Total service-related benefit	$	(20	)	$	(27	)	$	(23	)
Non-service-related expense	2			30			21
Total net expense (benefit)	$	(18	)	$	3		$	(2	)

The following table summarizes certain assumptions used in determining the post employment benefit obligations and net benefit expense for the Company’s U.S. post employment plans:



	2018	2017
Discount rate	3.95%	3.20%
Expected return on assets	3.00	3.00

Health care cost increase rate
Following year	7.00	6.50
Ultimate rate to which cost increase is assumed to decline	5.00	5.00
Year in which the ultimate rate is reached	2027	2023

Defined Contribution Plans

The Company sponsors defined contribution plans in the U.S. and in certain non-U.S. locations, all of which are administered in accordance with local laws. The most significant defined contribution plan is the Citi Retirement Savings Plan (formerly known as the Citigroup 401(k) Plan) sponsored by the Company in the U.S.

Under the Citi Retirement Savings Plan, eligible U.S. employees received matching contributions of up to 6% of their eligible compensation for 2018 and 2017, subject to statutory limits. Additionally, for eligible employees whose eligible compensation is $100,000 or less, a fixed contribution of up to 2% of eligible compensation is provided. All Company contributions are invested according to participants’ individual elections. The following table summarizes the Company contributions for the defined contribution plans:



	U.S. plans
In millions of dollars	2018		2017		2016
Company contributions	$	396	$	383	$	371

	Non-U.S. plans
In millions of dollars	2018		2017		2016
Company contributions	$	283	$	270	$	268