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Benefit Plans (Tables)
 9 Months Ended
Sep. 30, 2019
Retirement Benefits [Abstract]  
Company's pension and postretirement benefit plans
Components of net cost (benefit) for pension and other postretirement plans
 
 
Three months ended September 30,
 
Nine months ended September 30,
($ in millions)

 
2019
 
2018
 
2019
 
2018
Pension benefits
 
 
 
 
 
 
 
 
Service cost
 
$
30

 
$
27

 
$
86

 
$
83

Interest cost
 
58

 
65

 
185

 
189

Expected return on plan assets
 
(103
)
 
(103
)
 
(297
)
 
(323
)
Amortization of prior service credit
 
(14
)
 
(14
)
 
(42
)
 
(42
)
Costs and expenses
 
(29
)
 
(25
)
 
(68
)
 
(93
)
Remeasurement of projected benefit obligation
 
323

 
(38
)
 
1,054

 
(314
)
Remeasurement of plan assets
 
(136
)
 
4

 
(752
)
 
301

Remeasurement gains and losses
 
187

 
(34
)
 
302

 
(13
)
Pension net cost (benefit)
 
$
158

 
$
(59
)
 
$
234

 
$
(106
)
 
 
 
 
 
 
 
 
 
Postretirement benefits
 
 
 
 
 
 
 
 
Service cost
 
$
2

 
$
1

 
$
6

 
$
5

Interest cost
 
4

 
4

 
11

 
11

Amortization of prior service credit
 
—

 
(5
)
 
(2
)
 
(16
)
Costs and expenses
 
6

 
—

 
15

 
—

Remeasurement of projected benefit obligation
 
38

 
(5
)
 
63

 
(19
)
Remeasurement of plan assets
 
—

 
—

 
—

 
—

Remeasurement gains and losses
 
38

 
(5
)
 
63

 
(19
)
Postretirement net cost (benefit)
 
$
44

 
$
(5
)
 
$
78

 
$
(19
)
 
 
 
 
 
 
 
 
 
Pension and postretirement benefits
 
 
 
 
 
 
 
 
Costs and expenses
 
$
(23
)
 
$
(25
)
 
$
(53
)
 
$
(93
)
Remeasurement gains and losses
 
225

 
(39
)
 
365

 
(32
)
Total net cost (benefit)
 
$
202

 
$
(64
)
 
$
312

 
$
(125
)

Differences between expected and actual returns and changes in assumptions affect our pension and other postretirement obligations, plan assets and expenses.
Pension and other postretirement remeasurement losses were $225 million and $365 million for the third quarter and first nine months of 2019, respectively, compared to remeasurement gains of $39 million and $32 million for the same periods of 2018.
The losses for the third quarter and first nine months of 2019 primarily related to a decrease in the discount rate used to value the liabilities, partially offset by favorable asset performance compared to the expected return on plan assets.
The weighted average discount rate used to measure the benefit obligation decreased to 3.17% at September 30, 2019 compared to 3.53% at June 30, 2019, 3.87% at March 31, 2019 and 4.30% at December 31, 2018. Pension and other postretirement remeasurement of projected benefit obligation losses due to declines in the weighted average discount rate were $324 million and $1.04 billion for the third quarter and first nine months of 2019, respectively.
During the third quarter of 2019, the Company completed its triennial study of demographic assumptions. The Company reviewed historical experience for various long-term actuarial assumptions and methodologies that affect our pension and other postretirement obligations and incorporated updates into its best estimates of these assumptions. The update to these assumptions resulted in an increase of pension and other postretirement obligations primarily
related to the timing of participant retirements and higher levels and duration of medical coverage elected for retirees, partially offset by lower ages of employees electing medical coverage. During the second quarter of 2019, we recognized participant experience different from our demographic assumptions for mortality, terminations and retirements and the percentage of employees taking lump sum distributions. Actuarial assumption updates that affect our pension and other postretirement obligations resulted in remeasurement losses of $37 million and $81 million in the third quarter and first nine months of 2019, respectively, compared to gains of $3 million and losses of $72 million in the third quarter of 2018 and first nine months of 2018, respectively.
For the third quarter and first nine months of 2019, the actual return on plan assets was higher than our expected return by $136 million and $752 million, respectively, due to declines in interest rates which increased the fair value of our fixed income investments. The increase in the first nine months of 2019 was also due to strong equity market performance.