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Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Components of the plans' funded status reflected in the Consolidated Statements of Financial Position
The components of the pension and other postretirement plans’ funded status that are reflected in the Consolidated Statements of Financial Position as of December 31 are as follows:
($ in millions)
Pension
benefits
 
Postretirement
benefits
 
2016
 
2015
 
2016
 
2015
Fair value of plan assets
$
5,650

 
$
5,353

 
$
—

 
$
—

Less: Benefit obligation
6,591

 
6,130

 
373

 
405

Funded status
$
(941
)

$
(777
)

$
(373
)

$
(405
)
 
 
 
 
 
 
 
 
Items not yet recognized as a component of net periodic cost:
 
 
 
 
 
 
 
Net actuarial loss (gain)
$
2,807

 
$
2,710

 
$
(251
)
 
$
(263
)
Prior service credit
(310
)
 
(365
)
 
(62
)
 
(61
)
Unrecognized pension and other postretirement benefit cost, pre-tax
2,497


2,345


(313
)

(324
)
Deferred income tax
(874
)
 
(821
)
 
109

 
115

Unrecognized pension and other postretirement benefit cost
$
1,623


$
1,524


$
(204
)

$
(209
)
Change during the period in items not yet recognized as a component of net periodic cost
The change in 2016 in items not yet recognized as a component of net periodic cost, which is recorded in unrecognized pension and other postretirement benefit cost, is shown in the table below.
($ in millions)
Pension benefits
 
Postretirement benefits
Items not yet recognized as a component of net periodic cost – December 31, 2015
$
2,345

 
$
(324
)
Net actuarial loss (gain) arising during the period
294

 
(14
)
Net actuarial (loss) gain amortized to net periodic benefit cost
(201
)
 
24

Prior service credit arising during the period
—

 
(22
)
Prior service credit amortized to net periodic benefit cost
56

 
21

Translation adjustment and other
3

 
2

Items not yet recognized as a component of net periodic cost – December 31, 2016
$
2,497

 
$
(313
)
Estimates of the net actuarial loss (gain) and prior service credit expected to be recognized as a component of net periodic benefit cost in next fiscal year
The net actuarial loss (gain) is recognized as a component of net periodic cost amortized over the average remaining service period of active employees expected to receive benefits. Estimates of the net actuarial loss (gain) and prior service credit expected to be recognized as a component of net periodic benefit cost during 2017 are shown in the table below.
($ in millions)
Pension
benefits
 
Postretirement
benefits
Net actuarial loss (gain)
$
189

 
$
(24
)
Prior service credit
(56
)
 
(24
)
Changes in benefit obligations for all plans
The changes in benefit obligations for all plans for the years ended December 31 are as follows:
($ in millions)
Pension benefits
 
Postretirement benefits
 
2016
 
2015
 
2016
 
2015
Benefit obligation, beginning of year
$
6,130

 
$
6,493

 
$
405

 
$
575

Service cost
113

 
114

 
9

 
12

Interest cost
286

 
258

 
17

 
23

Participant contributions
1

 
—

 
16

 
19

Actuarial loss (gain)
387

 
(225
)
 
(14
)
 
(158
)
Benefits paid (1)
(301
)
 
(443
)
 
(41
)
 
(54
)
Plan amendments
—

 
—

 
(22
)
 
—

Translation adjustment and other
(25
)
 
(67
)
 
3

 
(12
)
Benefit obligation, end of year
$
6,591


$
6,130


$
373


$
405


______________________________
(1) 
Benefits paid include lump sum distributions, a portion of which may trigger settlement accounting treatment.
Components of net periodic cost
The components of net periodic cost for all plans for the years ended December 31 are as follows:
 
Pension benefits
 
Postretirement benefits
($ in millions)
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Service cost
$
113

 
$
114

 
$
96

 
$
9

 
$
12

 
$
10

Interest cost
286

 
258

 
262

 
17

 
23

 
23

Expected return on plan assets
(398
)
 
(424
)
 
(398
)
 
—

 
—

 
—

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
(56
)
 
(56
)
 
(58
)
 
(21
)
 
(22
)
 
(23
)
Net actuarial loss (gain)
174

 
190

 
127

 
(24
)
 
(9
)
 
(22
)
Settlement loss
27

 
31

 
54

 
—

 
—

 
—

Net periodic cost (credit)
$
146


$
113


$
83


$
(19
)

$
4


$
(12
)
Weighted average assumptions used to determine for pension plans and postretirement benefits plans the net benefit cost and benefit obligation
Weighted average assumptions used to determine net pension cost and net postretirement benefit cost for the years ended December 31 are:
 
Pension benefits
 
Postretirement benefits
($ in millions)
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Discount rate
4.83
%
 
4.10
%
 
5.00
%
 
4.59
%
 
3.97
%
 
5.11
%
Rate of increase in compensation levels
3.20

 
3.50

 
3.50

 
n/a

 
n/a

 
n/a

Expected long-term rate of return on plan assets
7.30

 
7.33

 
7.36

 
n/a

 
n/a

 
n/a

Weighted average assumptions used to determine benefit obligations as of December 31 are listed in the following table.
 
Pension benefits
 
Postretirement benefits
 
2016
 
2015
 
2016
 
2015
Discount rate
4.15
%
 
4.83
%
 
4.07
%
 
4.56
%
Rate of increase in compensation levels
3.20

 
3.20

 
n/a

 
n/a
Change in pension plan assets
The change in pension plan assets for the years ended December 31 is as follows:
($ in millions)
2016
 
2015
Fair value of plan assets, beginning of year
$
5,353

 
$
5,783

Actual return on plan assets
491

 
(43
)
Employer contribution
131

 
125

Benefits paid
(301
)
 
(443
)
Translation adjustment and other
(24
)
 
(69
)
Fair value of plan assets, end of year
$
5,650

 
$
5,353
Pension plans' weighted average target asset allocation and the actual percentage of plan assets
The pension plans’ weighted average target asset allocation and the actual percentage of plan assets, by asset category as of December 31, 2016 are as follows:
 
Target asset allocation (1)
 
Actual percentage of plan assets
Asset category
2016
 
2016
 
2015
Equity securities (2)
50 - 68%
 
62
%
 
60
%
Fixed income securities
27 - 37%
 
29

 
30

Limited partnership interests
0 - 14%
 
7

 
7

Short-term investments and other
—
 
2

 
3

Total without securities lending (3)
 
 
100
%
 
100
%

______________________________
(1) 
The target asset allocation considers risk based exposure while the actual percentage of plan assets utilizes a financial reporting view excluding exposure provided through derivatives.
(2) 
The actual percentage of plan assets for equity securities include private equity investments that are subject to the limited partnership interests target allocation of 1% and 2% in 2016 and 2015, respectively, fixed income mutual funds that are subject to the fixed income securities target allocation of 3% for both 2016 and 2015 as well as 1% of equity exposure created through a derivative which is not included in the actual allocations in 2016.
(3) 
Securities lending collateral reinvestment of $143 million and $152 million is excluded from the table above in 2016 and 2015, respectively.
Fair values of pension plan assets
The following table presents the fair values of pension plan assets as of December 31, 2016.
($ in millions)
 
 
 
 
 
 
 
 
Quoted prices in active markets for identical assets (Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
(Level 3)
 
Balance as of December 31, 2016
Equity securities
$
155

 
$
3,230

 
$
79

 
$
3,464

Fixed income securities:
 
 
 
 
 
 

U.S. government and agencies
30

 
285

 
—

 
315

Corporate
—

 
1,309

 
10

 
1,319

Short-term investments
144

 
121

 
—

 
265

Limited partnership interests:
 
 
 
 
 
 

Real estate funds (1)
—

 
—

 
100

 
100

Private equity funds (2)
—

 
—

 
261

 
261

Hedge funds
—

 
—

 
2

 
2

Cash and cash equivalents
32

 
—

 
—

 
32

Free-standing derivatives:
 
 
 
 
 
 

Assets
(1
)
 
1

 
—

 
—

Total plan assets at fair value
$
360


$
4,946


$
452


5,758

% of total plan assets at fair value
6.3
%

85.9
%

7.8
%
 
100.0
%
 
 
 
 
 
 
 
 
Securities lending obligation (3)
 
 
 
 
 
 
(158
)
Other net plan assets (4)
 
 
 
 
 
 
50

Total reported plan assets
 
 
 
 
 
 
$
5,650

______________________________
(1) 
Real estate funds held by the pension plans are primarily invested in U.S. commercial real estate.
(2) 
Private equity investments held by the pension plans are primarily comprised of buyout and growth funds in North America and other developed markets.
(3) 
The securities lending obligation represents the plan’s obligation to return securities lending collateral received under a securities lending program. The terms of the program allow both the plan and the counterparty the right and ability to redeem/return the securities loaned on short notice. Due to its relatively short-term nature, the outstanding balance of the obligation approximates fair value.
(4) 
Other net plan assets represent interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales.
The following table presents the fair values of pension plan assets as of December 31, 2015.
($ in millions)
 
 
 
 
 
 
 
 
Quoted prices in active markets for identical assets (Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
(Level 3)
 
Balance as of December 31, 2015
Equity securities
$
136

 
$
2,945

 
$
100

 
$
3,181

Fixed income securities:
 
 
 
 
 
 

U.S. government and agencies
72

 
334

 
—

 
406

Municipal
—

 
—

 
7

 
7

Corporate
—

 
1,205

 
10

 
1,215

Short-term investments
112

 
184

 
—

 
296

Limited partnership interests:
 
 
 
 
 
 

Real estate funds
—

 
—

 
104

 
104

Private equity funds
—

 
—

 
237

 
237

Hedge funds
—

 
—

 
33

 
33

Cash and cash equivalents
22

 
—

 
—

 
22

Total plan assets at fair value
$
342


$
4,668


$
491

 
5,501

% of total plan assets at fair value
6.2
%

84.9
%

8.9
%
 
100.0
%
 
 
 
 
 
 
 
 
Securities lending obligation
 
 
 
 
 
 
(167
)
Other net plan assets
 
 
 
 
 
 
19

Total reported plan assets
 
 
 
 
 
 
$
5,353
Rollforward of Level 3 plan assets
The following table presents the rollforward of Level 3 plan assets for the year ended December 31, 2016.
($ in millions)
 
 
Actual return on plan assets:
 
 
 
 
 
 
 
Balance as of December 31, 2015
 
Relating to assets sold during the period
 
Relating to assets still held at the reporting date
 
Purchases, sales and settlements, net
 
Net transfers in and/or (out) of Level 3
 
Balance as of December 31, 2016
Equity securities
$
100

 
$
(2
)
 
$
(1
)
 
$
(18
)
 
$
—

 
$
79

Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
7

 
—

 
—

 
(7
)
 
—

 
—

Corporate
10

 
—

 
—

 
(5
)
 
5

 
10

Limited partnership interests:
 
 
 
 
 
 
 
 
 
 
 
Real estate funds
104

 
—

 
5

 
(9
)
 
—

 
100

Private equity funds
237

 
—

 
24

 
—

 
—

 
261

Hedge funds
33

 
—

 
(2
)
 
(29
)
 
—

 
2

Total Level 3 plan assets
$
491


$
(2
)

$
26


$
(68
)

$
5


$
452

The following table presents the rollforward of Level 3 plan assets for the year ended December 31, 2015.
($ in millions)
 
 
Actual return on plan assets:
 
 
 
 
 
 
 
Balance as of December 31, 2014
 
Relating to assets sold during the period
 
Relating to assets still held at the reporting date
 
Purchases, sales and settlements, net
 
Net transfers in and/or (out) of Level 3
 
Balance as of December 31, 2015
Equity securities
$
75

 
$
1

 
$
(5
)
 
$
29

 
$
—

 
$
100

Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
14

 
—

 
—

 
(7
)
 
—

 
7

Corporate
12

 
—

 
—

 
—

 
(2
)
 
10

Limited partnership interests:
 
 
 
 
 
 
 
 
 
 
 
Real estate funds
154

 
—

 
(12
)
 
(38
)
 
—

 
104

Private equity funds
218

 
—

 
(8
)
 
27

 
—

 
237

Hedge funds
32

 
—

 
1

 
—

 
—

 
33

Total Level 3 plan assets
$
505


$
1


$
(24
)

$
11


$
(2
)

$
491

The following table presents the rollforward of Level 3 plan assets for the year ended December 31, 2014.
($ in millions)
 
 
Actual return on plan assets:
 
 
 
 
 
 
 
Balance as of December 31, 2013
 
Relating to assets sold during the period
 
Relating to assets still held at the reporting date
 
Purchases, sales and settlements, net
 
Net transfers in and/or (out) of Level 3
 
Balance as of December 31, 2014
Equity securities
$
237

 
$
2

 
$
2

 
$
(166
)
 
$
—

 
$
75

Fixed income securities:
 
 
 
 
 
 
 
 
 
 
 
Municipal
18

 
—

 
—

 
(4
)
 
—

 
14

Corporate
18

 
—

 
—

 
(6
)
 
—

 
12

Limited partnership interests:
 
 
 
 
 
 
 
 
 
 
 
Real estate funds
197

 
(3
)
 
6

 
(46
)
 
—

 
154

Private equity funds
211

 
(4
)
 
4

 
7

 
—

 
218

Hedge funds
9

 
—

 
—

 
23

 
—

 
32

Total Level 3 plan assets
$
690


$
(5
)

$
12


$
(192
)

$
—


$
505
Estimated future benefit payments expected to be paid
Estimated future benefit payments expected to be paid in the next 10 years, based on the assumptions used to measure the Company’s benefit obligation as of December 31, 2016, are presented in the table below.
($ in millions)
Pension benefits
 
Postretirement benefits
2017
$
412

 
$
23

2018
421

 
23

2019
463

 
24

2020
487

 
25

2021
521

 
26

2022-2026
2,512

 
137

Total benefit payments
$
4,816

 
$
258
Schedule of ESOP benefit
These amounts were reduced by the ESOP benefit computed for the years ended December 31 as follows:
($ in millions)
2016
 
2015
 
2014
Interest expense recognized by ESOP
$
1

 
$
1

 
$
1

Less: dividends accrued on ESOP shares
(3
)
 
(3
)
 
(4
)
Cost of shares allocated
7

 
10

 
8

Compensation expense
5

 
8

 
5

Reduction of defined contribution due to ESOP
60

 
73

 
71

ESOP benefit
$
(55
)

$
(65
)

$
(66
)