Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

Components of the plans' funded status reflected in the Consolidated Statements of Financial Position



Components of the pension and other postretirement plans’ funded status reflected in the Consolidated Statements of Financial Position
	As of December 31,
	Pension benefits						Postretirement benefits
($ in millions)	2017			2016			2017			2016
Fair value of plan assets	$	6,284		$	5,650		$	—		$	—
Less: Benefit obligation	6,815			6,591			386			373
Funded status	$	(531	)	$	(941	)	$	(386	)	$	(373	)

Items not yet recognized as a component of net periodic cost:
Net actuarial loss (gain)	$	2,224		$	2,807		$	(218	)	$	(251	)
Prior service credit	(254		)	(310		)	(37		)	(62		)
Unrecognized pension and other postretirement benefit cost, pre-tax	1,970			2,497			(255		)	(313		)
Deferred income tax ⁽¹⁾	(419		)	(874		)	51			109
Unrecognized pension and other postretirement benefit cost	$	1,551		$	1,623		$	(204	)	$	(204	)


⁽¹⁾	Components of the pension plan and other postretirement benefits were reduced by deferred income taxes at the newly enacted 21% U.S. corporate tax rate as of December 31, 2017 and 35% as of December 31, 2016.

Change during the period in items not yet recognized as a component of net periodic cost

The change in items not yet recognized as a component of net periodic cost is recorded in unrecognized pension and other postretirement benefit cost.



Changes in items not yet recognized as a component of net periodic cost
($ in millions)	Pension benefits			Postretirement benefits
Items not yet recognized as a component of net periodic cost – December 31, 2016	$	2,497		$	(313	)
Net actuarial (gain) loss arising during the period	(247		)	8
Net actuarial (loss) gain amortized to net periodic benefit cost	(342		)	24
Prior service credit amortized to net periodic benefit cost	56			25
Translation adjustment and other	6			1
Items not yet recognized as a component of net periodic cost – December 31, 2017	$	1,970		$	(255	)

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) and prior service credit 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 2018 net actuarial loss (gain) and prior service credit
($ in millions)	Pension benefits			Postretirement benefits
Net actuarial loss (gain)	$	177		$	(22	)
Prior service credit	(56		)	(22		)

Changes in benefit obligations for all plans



Changes in benefit obligations for all plans
	Pension benefits						Postretirement benefits
($ in millions)	2017			2016			2017			2016
Benefit obligation, beginning of year	$	6,591		$	6,130		$	373		$	405
Service cost	114			113			8			9
Interest cost	264			286			15			17
Participant contributions	—			1			12			16
Actuarial loss (gain)	395			387			8			(14		)
Benefits paid ⁽¹⁾	(553		)	(301		)	(35		)	(41		)
Plan amendments	—			—			—			(22		)
Translation adjustment and other	4			(25		)	5			3
Benefit obligation, end of year	$	6,815		$	6,591		$	386		$	373


⁽¹⁾	Benefits paid include lump sum distributions, a portion of which triggered settlement accounting treatment.

Components of net periodic cost



Components of net periodic cost
	For the years ended December 31,
	Pension benefits									Postretirement benefits
($ in millions)	2017			2016			2015			2017			2016			2015
Service cost	$	114		$	113		$	114		$	8		$	9		$	12
Interest cost	264			286			258			15			17			23
Expected return on plan assets	(409		)	(398		)	(424		)	—			—			—
Amortization of:
Prior service credit	(56		)	(56		)	(56		)	(25		)	(21		)	(22		)
Net actuarial loss (gain)	189			174			190			(24		)	(24		)	(9		)
Settlement loss	153			27			31			—			—			—
Net periodic cost (credit)	$	255		$	146		$	113		$	(26	)	$	(19	)	$	4

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,
	Pension benefits						Postretirement benefits
($ in millions)	2017		2016		2015		2017		2016		2015
Discount rate	4.15	%	4.83	%	4.10	%	3.63	%	4.59	%	3.97	%
Rate of increase in compensation levels	3.20		3.20		3.50		n/a		n/a		n/a
Expected long-term rate of return on plan assets	7.31		7.30		7.33		n/a		n/a		n/a



Weighted average assumptions used to determine benefit obligations
	For the years ended December 31,
	Pension benefits				Postretirement benefits
	2017		2016		2017		2016
Discount rate	3.68	%	4.15	%	4.06	%	4.07	%
Rate of increase in compensation levels	3.20		3.20		n/a		n/a

Change in pension plan assets



Change in pension plan assets
	For the years ended December 31,
($ in millions)	2017			2016
Fair value of plan assets, beginning of year	$	5,650		$	5,353
Actual return on plan assets	1,051			491
Employer contribution	131			131
Benefits paid	(553		)	(301		)
Translation adjustment and other	5			(24		)
Fair value of plan assets, end of year	$	6,284		$	5,650

Pension plans' weighted average target asset allocation and the actual percentage of plan assets



Weighted average target asset allocation and actual percentage of plan assets by asset category
	As of December 31, 2017
	Target asset allocation ⁽¹⁾	Actual percentage of plan assets
Pension plan’s asset category	2017	2017		2016
Equity securities ⁽²⁾	43 - 62%	58	%	62	%
Fixed income securities	34 - 44%	34		29
Limited partnership interests	0 - 13%	6		7
Short-term investments and other	—	2		2
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 2% and 1% in 2017 and 2016, respectively, fixed income mutual funds that are subject to the fixed income securities target allocation of 3% for both 2017 and 2016 as well as 1% of equity exposure created through a derivative which is not included in the actual allocations in 2017.


⁽³⁾	Securities lending collateral reinvestment of $202 million and $143 million is excluded from the table above in 2017 and 2016, respectively.

Fair values of pension plan assets

stments.



Fair values of pension plan assets as of December 31, 2017
($ 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, 2017
Equity securities	$	126		$	264		$	29		$	419
Fixed income securities:
U.S. government and agencies	174			420			—			594
Corporate	—			1,543			10			1,553
Short-term investments	97			197			—			294
Cash and cash equivalents	21			—			—			21
Free-standing derivatives:
Assets	—			1			—			1
Total plan assets at fair value	$	418		$	2,425		$	39		2,882
% of total plan assets at fair value	14.5		%	84.1		%	1.4		%	100.0		%

Investments measured using the net asset value practical expedient ⁽¹⁾										3,598
Securities lending obligation ⁽²⁾										(216		)
Other net plan assets ⁽³⁾										20
Total reported plan assets										$	6,284

⁽¹⁾

In 2017, the Company retrospectively adopted a new accounting standard for pension plans which eliminates the requirement to include investments in the fair value hierarchy for which fair value is measured using net asset value (“NAV”) per share practical expedient. As a result, certain pension plan investments that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy, including the related rollforward of Level 3 plan assets presented below. These investments comprised of $3.20 billion of equity investments and $402 million of limited partnerships.

⁽²⁾

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.


⁽³⁾	Other net plan assets represent interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales.



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		$	147		$	—		$	302
Fixed income securities:
U.S. government and agencies	30			285			—			315
Corporate	—			1,309			10			1,319
Short-term investments	144			121			—			265
Cash and cash equivalents	32			—			—			32
Free-standing derivatives:
Assets	(1		)	1			—			—
Total plan assets at fair value	$	360		$	1,863		$	10		2,233
% of total plan assets at fair value	16.1		%	83.4		%	0.5		%	100.0		%

Investments measured using the Net Asset Value practical expedient										3,525
Securities lending obligation										(158		)
Other net plan assets										50
Total reported plan assets										$	5,650

Rollforward of Level 3 plan assets



Rollforward of level 3 plan assets during December 31, 2017
			Actual return on plan assets:
($ in millions)	Balance as of December 31, 2016		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, 2017
Equity securities	$	—	$	—	$	—	$	29	$	—	$	29
Fixed income securities:
Corporate	10		—		—		—		—		10
Total Level 3 plan assets	$	10	$	—	$	—	$	29	$	—	$	39



Rollforward of level 3 plan assets during December 31, 2016
			Actual return on plan assets:
($ in millions)	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	$	1	$	(1	)	$	—	$	—		$	—	$	—
Fixed income securities:
Municipal	7		—			—		(7		)	—		—
Corporate	10		—			—		(5		)	5		10
Total Level 3 plan assets	$	18	$	(1	)	$	—	$	(12	)	$	5	$	10



Rollforward of level 3 plan assets during December 31, 2015
			Actual return on plan assets:
($ in millions)	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	$	1	$	1	$	(1	)	$	—		$	—		$	1
Fixed income securities:
Municipal	14		—		—			(7		)	—			7
Corporate	12		—		—			—			(2		)	10
Total Level 3 plan assets	$	27	$	1	$	(1	)	$	(7	)	$	(2	)	$	18

Estimated future benefit payments expected to be paid



Estimated future benefit payments expected to be paid in the next 10 years
	As of December 31, 2017,
($ in millions)	Pension benefits		Postretirement benefits
2018	$	426	$	22
2019	463		24
2020	485		24
2021	514		25
2022	533		26
2023-2027	2,477		136
Total benefit payments	$	4,898	$	257

Schedule of ESOP benefit



ESOP benefit
	For the years December 31,
($ in millions)	2017			2016			2015
Interest expense recognized by ESOP	$	—		$	1		$	1
Less: dividends accrued on ESOP shares	(1		)	(3		)	(3		)
Cost of shares allocated	3			7			10
Compensation expense	2			5			8
Reduction of defined contribution due to ESOP	38			60			73
ESOP benefit	$	(36	)	$	(55	)	$	(65	)