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Pension and other postretirement benefits (Tables)

12 Months Ended

Dec. 31, 2023

Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan

The change in benefit obligation, change in plan assets, funded status of pension and other postretirement (OPEB) plans, and amounts recognized in the Consolidated Balance Sheets were:


	Pension Plans				OPEB Plans (i)
	2023		2022		2023	2022
in $ millions	U.S.	Non-U.S.	U.S.	Non-U.S.
Change in benefit obligation:
Benefit obligation at beginning of year	497	2,105	677	3,136	100	129
Service cost	1	31	2	55	2	3
Interest cost	24	86	18	43	5	3
Amendments	–	(1)	2	(2)	–	–
Actuarial losses and (gains)	9	178	(153)	(831)	3	(32)
Benefits paid	(35)	(89)	(35)	(101)	(5)	(5)
Plan participant contributions	–	9	–	9	–	–
Settlements	–	(4)	–	(6)	–	–
Net transfer out (including the effect of any business combinations/divestitures)	–	–	(14)	(11)	–	–
Foreign currency rate changes	–	99	–	(187)	–	2
Benefit obligation at end of year	496	2,414	497	2,105	105	100

Change in plan assets
Fair value of plan assets at beginning of year	446	2,316	601	3,015	–	–
Actual gain (loss) on plan assets	37	143	(122)	(467)	–	–
Employer contributions	1	38	2	36	5	5
Plan participant contributions	–	9	–	9	–	–
Benefits paid	(35)	(89)	(35)	(101)	(5)	(5)
Settlements	–	(4)	–	(6)	–	–

Foreign currency rate changes	–	111	–	(170)	–	–
Fair value of plan assets at end of year	449	2,524	446	2,316	–	–

Reconciliation of funded status:
Fair value of plan assets	449	2,524	446	2,316	–	–
Benefit obligation	496	2,414	497	2,105	105	100
Funded status	(47)	110	(51)	211	(105)	(100)
Accumulated Benefit Obligation	496	2,349	497	2,074

Amounts recognized in the Consolidated Balance Sheets:
Noncurrent assets	–	271	–	347	–	–
Current liabilities	(2)	(4)	(2)	(7)	(6)	(6)

Noncurrent liabilities	(45)	(111)	(49)	(129)	(98)	(94)
Liabilities held for sale	–	(46)	–	–	(1)	–
Funded status at end of year	(47)	110	(51)	211	(105)	(100)


Net actuarial (loss) gain	(68)	(225)	(79)	(97)	35	40
Prior service (cost) credit	(1)	92	(1)	95	3	3
Total accumulated other comprehensive (loss) income	(69)	(133)	(80)	(2)	38	43

(i) Includes a benefit obligation of $11 million and $11 million related to non-U.S. OPEB plans at December 31, 2023 and 2022, respectively.

Schedule of Pension Plans where Accumulated Benefit Obligation (“ABO”) Projected Benefit Obligation (“PBO”) Exceeds the Fair Value of Respective Plan Assets

The pension and other postretirement plans for which their accumulated benefit obligation, projected benefit obligation or accumulated postretirement benefit obligation exceeds the fair value of their respective plan assets at December 31 were:


	U.S. Plans		Non-U.S. Plans
in $ millions	2023	2022	2023	2022
Pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation	496	497	580	512
Fair value of plan assets	449	446	421	378

Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation	496	497	527	503
Fair value of plan assets	449	446	394	374

Other postretirement plans with accumulated postretirement benefit obligations in excess of plan assets:
Accumulated postretirement benefit obligation	–	–	9	8
Fair value of plan assets	–	–	–	–

Schedule of Net Benefit Costs

The total retirement benefit expense recognized in the Consolidated Statements of Income for the years ended December 31 were:


in $ millions	2023	2022	2021
Total defined contribution expense	320	307	288
Total defined benefit expense	31	30	61
Total expense within the Consolidated Statements of Income	351	337	349

The components of net periodic benefit cost (income) recognized in the Consolidated Statements of Income for the years ended December 31 were:


	Pension Plans						OPEB Plans (ii)
	U.S.			Non-U.S.
in $ millions	2023	2022	2021	2023	2022	2021	2023	2022	2021
Service cost	1	2	3	31	55	63	2	3	4
Interest cost	24	18	19	86	43	40	5	3	4
Expected return on assets	(20)	(30)	(37)	(91)	(72)	(71)	–	-	–
Amortization of:
Prior service cost (credit)	–	1	–	(11)	(11)	(11)	–	–	(1)
Actuarial loss (gain)	3	2	4	4	15	26	(3)	–	–
Curtailment loss (gain)	–	3	–	–	–	–	(1)	–	–
Settlement loss (gain)	–	–	17	1	(2)	1	–	–	–
Net periodic benefit cost (income) (i)	8	(4)	6	20	28	48	3	6	7

(i) Service cost is included within Cost of revenues and Selling, general and administrative expenses while all other cost components are recorded within Other nonoperating (expense) income, net.

(ii) Includes the net periodic benefit cost of $nil million, $1 million and $1 million related to non-U.S. OPEB plans for the years ended December 31, 2023, 2022, and 2021 respectively.

The changes in plan assets and benefit obligations that were recognized in Other comprehensive (income) loss for the years ended December 31 were:


	Pension Plans						OPEB Plans
	U.S.			Non-U.S.			(i)
in $ millions	2023	2022	2021	2023	2022	2021	2023	2022	2021
Net actuarial (gain) loss	(8)	(1)	(7)	126	(292)	(181)	3	(32)	(19)
Prior service cost (credit)	–	2	1	(1)	(2)	(1)	–	–	(1)
Amortization or curtailment recognition of prior service (cost) credit	–	(4)	–	11	11	11	–	–	1
Amortization or settlement recognition of net (loss) gain	(3)	(2)	(21)	(4)	(13)	(27)	3	–	–
Foreign currency exchange effects	–	–	–	(2)	(27)	(29)	–	–	–
Amount recognized in other comprehensive (income) loss (i)	(11)	(5)	(27)	130	(323)	(227)	6	(32)	(19)
Amount recognized in net periodic pension benefit cost (income) and other comprehensive (income) loss	(3)	(9)	(21)	150	(295)	(179)	9	(26)	(12)

(i) Includes an amount recognized in other comprehensive (income) loss of $1 million, $(2) million and $(2) million related to non-U.S. OPEB plans for the years ended December 31, 2023, 2022 and 2021, respectively.

Schedule of Weighted Average Assumptions

The weighted average assumptions used to determine net periodic benefit cost (income) for the years ended December 31 were:


	Pension Plans												OPEB Plans
	U.S.						Non-U.S.
	2023		2022		2021		2023		2022		2021		2023		2022		2021
Discount rate	5.20	%	2.70	%	2.25	%	4.13	%	1.54	%	1.23	%	5.08	%	2.59	%	2.18	%
Rate of compensation increase	N/A		3.50	%	3.50	%	3.22	%	2.74	%	2.39	%	2.80	%	2.22	%	2.37	%
Expected long‐term rate of return on plan assets	5.50	%	5.50	%	5.50	%	4.04	%	2.54	%	2.51	%	N/A		N/A		N/A
Interest crediting rates	N/A		N/A		N/A		1.50	%	2.25	%	1.25	%	N/A		N/A		N/A

The weighted average assumptions used to determine the benefit obligation at December 31 were:


	Pension Plans								OPEB Plans
	U.S.				Non-U.S.
	2023		2022		2023		2022		2023		2022
Discount rate	4.95	%	5.20	%	3.49	%	4.13	%	4.86	%	5.08	%
Rate of compensation increase	N/A		N/A		3.22	%	3.22	%	2.75	%	2.80	%

Schedule of Allocation of Plan Assets

The target allocation ranges and fair values by asset class at December 31 were:


	Pension Plans
	Target allocation ranges
	U.S. Plans	Non-U.S. Plans
	2023 (%)
Cash and cash equivalents	–	0-5
Equity instruments (i)	10-30	15-25
Debt instruments (ii)	65-85	20-35
Real estate	–	5-10
Derivatives	–	0-5
Investment funds	0-15	0-5
Assets held by insurance company	–	0-5
Other	–	0-10

(i) For U.S. pension plans, equity instruments with a total allocation range of 10-30% are made up of 10-30% in developed markets’ diversified equity instruments and 10-30% in emerging markets’ diversified equity instruments. For non-U.S. pension plans, equity instruments with a total allocation range of 15-25% are made up of 15-22% in developed markets’ diversified equity instruments and 1-2% in emerging markets’ diversified equity instruments.

(ii) For U.S. pension plans, debt instruments with a total allocation range of 65-85% are made up of 65-85% in non-government debt instruments and 65-85% in government fixed interest instruments. For non-U.S. pension plans, debt instruments with a total allocation range of 20-35% are made up of 11-18% in non-government debt instruments, 17-32% in government fixed interest instruments, 31-40% in government inflation-protected bonds, 4-10% in asset-backed instruments, 4-10% in inflation-protected bonds and 4-10% in structured debt.

The Company’s asset allocations by asset category at December 31 were:


	Pension Plans
	Fair Values
	2023
	U.S. Plans				Non-U.S. Plans
in $ millions	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Cash and cash equivalents	3	–	–	3	50	15	–	65
Equity instruments (i)	–	90	–	90	462	56	–	518
Debt instruments (ii)	–	341	–	341	1,310	179	–	1,489
Real estate	–	–	–	–	97	82	14	193
Derivatives	–	–	–	–	12	2	–	14
Investment funds	11	–	–	11	85	13	–	98
Assets held by insurance company	–	–	–	–	–	2	117	119
Other	–	–	4	4	1	19	8	28
Total	14	431	4	449	2,017	368	139	2,524

(i) For U.S. pension plans, equity instruments of $90 million are made up of $79 million in developed markets’ diversified equity instruments and $11 million in emerging markets’ diversified equity instruments. For non-U.S. pension plans, equity instruments of $518 million are made up of $486 million in developed markets’ diversified equity instruments and $32 million in emerging markets’ diversified equity instruments.

(ii) For U.S. pension plans, debt instruments of $341 million are made up of $233 million in non-government debt instruments and $108 million in government fixed interest instruments. For non-U.S. pension plans, debt instruments of $1,489 million are made up of $251 million in non-government debt instruments, $400 million in government fixed interest instruments, $763 million in government inflation-protected bonds, $34 million in asset-backed instruments and $41 million in inflation-protected bonds.


	Pension Plans
	Fair Values
	2022
	U.S. Plans				Non-U.S. Plans
in $ millions	Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Cash and cash equivalents	4	–	–	4	53	–	–	53
Equity instruments (i)	–	83	–	83	435	66	–	501
Debt instruments (ii)	3	314	–	317	1,288	36	–	1,324
Real estate	–	–	–	–	181	–	13	194
Derivatives	–	–	–	–	12	(5)	–	7
Investment funds	23	–	11	34	77	11	–	88
Assets held by insurance company	–	–	–	–	–	2	113	115
Other	–	–	8	8	28	–	6	34
Total	30	397	19	446	2,074	110	132	2,316

(i) For U.S. pension plans, equity instruments of $83 million are made up of $73 million in developed markets’ diversified equity instruments and $10 million in emerging markets’ diversified equity instruments. For non-U.S. pension plans, equity instruments of $501 million are made up of $470 million in developed markets’ diversified equity instruments and $31 million in emerging markets’ diversified equity instruments.

(ii) For U.S. pension plans, debt instruments of $317 million are made up of $189 million in non-government debt instruments and $128 million in government fixed interest instruments. For non-U.S. pension plans, debt instruments of $1,324 million are made up of $197 million in non-government debt instruments, $437 million in government fixed interest instruments, $663 million in government inflation-protected bonds and $27 million in asset-backed instruments.

Schedule of Reconciliation for Pension Plans by Asset

The Level 3 reconciliation for pension plans by asset class for the years ended December 31, 2023 and 2022 were:


	U.S. Plans
in $ millions	Beginning balance on 1/1/2023	Actual return on plan assets, relating to assets still held at reporting date	Purchases, sales and settlements	Transfer (out of) Level 3	Change due to exchange rate changes	Ending balance on 12/31/2023
Asset Class

Investment funds	11	–	–	(11)	–	–

Other	8	1	(1)	(4)	–	4
Total	19	1	(1)	(15)	–	4


	Non-U.S. Plans
in $ millions	Beginning balance on 1/1/2023	Actual return on plan assets, relating to assets still held at reporting date	Purchases, sales and settlements	Transfer into/(out of) Level 3	Change due to exchange rate changes	Ending balance on 12/31/2023
Asset Class
Real estate	13	–	-	–	1	14

Assets held by insurance company	113	11	(10)	–	3	117
Other	6	2	–	–	–	8
Total	132	13	(10)	–	4	139

U.S. Plans

in $ millions

Beginning balance on 1/1/2022

Actual return on plan assets, relating to assets still held at reporting date

Purchases, sales and settlements

Change due to exchange rate changes

Ending balance on 12/31/2022

Asset Class

Investment funds

–

Other

–

(1)

–

Total

–

(1)

–


	Non-U.S. Plans
in $ millions	Beginning balance on 1/1/2022	Actual return on plan assets, relating to assets still held at reporting date	Purchases, sales and settlements	Change due to exchange rate changes	Ending balance on 12/31/2022
Asset Class
Real estate	17	(2)	–	(2)	13
Assets held by insurance company	152	(31)	–	(8)	113
Other	5	2	–	(1)	6
Total	174	(31)	–	(11)	132

Schedule of Health Care Cost Trend Rates

The assumed healthcare cost trend rates at December 31 were:


	2023		2022		2021
Healthcare cost trend rate assumed for next year	6.85	%	1.76	%	5.91	%
Rate to which the cost trend rate gradually declines	3.70	%	3.70	%	3.60	%
Year the rate reaches the ultimate rate	2090		2090		2074

Schedule of Expected Benefit Payments

The following table presents the expected future benefit payments to be made over the next 10 years:


	Pension plans		OPEB
in $ millions	U.S.	Non-U.S.
2024	36	100	6
2025	37	104	6
2026	37	107	6
2027	37	111	6
2028	36	114	6
2029-2033	176	598	34