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Benefit Plans
 9 Months Ended
Sep. 30, 2020
Retirement Benefits [Abstract]  
Benefit Plans
Note 13
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)
 
2020
 
2019
 
2020
 
2019
Pension benefits
 
 
 
 
 
 
 
 
Service cost
 
$
25

 
$
30

 
$
78

 
$
86

Interest cost
 
49

 
58

 
161

 
185

Expected return on plan assets
 
(104
)
 
(103
)
 
(303
)
 
(297
)
Amortization of prior service credit
 
(14
)
 
(14
)
 
(42
)
 
(42
)
Curtailment loss
 
10

 
—

 
10

 
—

Costs and expenses
 
(34
)
 
(29
)
 
(96
)
 
(68
)
Remeasurement of projected benefit obligation
 
130

 
323

 
686

 
1,054

Remeasurement of plan assets
 
(202
)
 
(136
)
 
(391
)
 
(752
)
Remeasurement (gains) losses
 
(72
)
 
187

 
295

 
302

Pension net (benefit) cost
 
$
(106
)
 
$
158

 
$
199

 
$
234

 
 
 
 
 
 
 
 
 
Postretirement benefits
 
 
 
 
 
 
 
 
Service cost
 
$
1

 
$
2

 
$
4

 
$
6

Interest cost
 
2

 
4

 
8

 
11

Amortization of prior service credit
 
(1
)
 
—

 
(3
)
 
(2
)
Curtailment gain
 
(8
)
 
—

 
(8
)
 
—

Costs and expenses
 
(6
)
 
6

 
1

 
15

Remeasurement of projected benefit obligation
 
1

 
38

 
25

 
63

Remeasurement of plan assets
 
—

 
—

 
—

 
—

Remeasurement (gains) losses
 
1

 
38

 
25

 
63

Postretirement net (benefit) cost
 
$
(5
)
 
$
44

 
$
26

 
$
78

 
 
 
 
 
 
 
 
 
Pension and postretirement benefits
 
 
 
 
 
 
 
 
Costs and expenses
 
$
(40
)
 
$
(23
)
 
$
(95
)
 
$
(53
)
Remeasurement (gains) losses
 
(71
)
 
225

 
320

 
365

Total net (benefit) cost
 
$
(111
)
 
$
202

 
$
225

 
$
312


Differences between expected and actual returns on plan assets and changes in assumptions affect the Company’s pension and other postretirement obligations, plan assets and expenses.
Pension and other postretirement service cost, interest cost, expected return on plan assets, amortization of prior service credit and curtailment gains (losses) are reported in property and casualty insurance claims and claims expense, operating costs and expenses, net investment income and (if applicable) restructuring and related charges on the Condensed Consolidated Statement of Operations.
Pension and postretirement benefits remeasurement gains and losses
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
($ in millions)
 
2020
 
2019
 
2020
 
2019
Remeasurement of projected benefit obligation (gains) losses:
 
 
 
 
 
 
 
 
Discount rate
 
$
57

 
$
237

 
$
454

 
$
730

Other assumptions
 
74

 
124

 
257

 
387

Remeasurement of plan assets (gains) losses
 
(202
)
 
(136
)
 
(391
)
 
(752
)
Remeasurement (gains) losses
 
$
(71
)
 
$
225

 
$
320

 
$
365


Remeasurement gains for the third quarter of 2020 primarily related to favorable asset performance compared to the expected return on plan assets, partially offset by changes in actuarial assumptions and a decrease in the discount rate. Remeasurement losses for the first nine months of 2020 primarily related to a decrease in the discount rate and changes in actuarial assumptions, 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 2.65% at September 30, 2020 compared to 2.74% at June 30, 2020, 3.37% at March 31, 2020 and 3.31% at December 31, 2019 resulting in losses for the third quarter and first nine months of 2020.
Remeasurement losses for other assumptions in the third quarter of 2020 are primarily due to changes in the estimated percentage of employees taking lump sum distributions due to changes in the interest rate. Remeasurement losses for the first nine months of 2020 primarily related to a decrease in lump sum interest rates and changes in the estimated percentage of employees taking lump sum distributions.
For the third quarter of 2020, the actual return on plan assets was higher than the expected return due to tightening of credit spreads which increased the fair value of fixed income investments and improved public equity market performance. For the first nine months of 2020, the actual return on plan assets was higher than the expected return primarily due to a decline in interest rates.