Benefit Plans

6 Months Ended

Jun. 30, 2024

Retirement Benefits [Abstract]

Benefit Plans

Note 15 Benefit Plans

For the second quarter and first six months of 2024, service cost includes a $38 million refund of premiums previously paid to the Pension Benefit Guaranty Corporation (“PBGC”). The PBGC insures defined benefit plans offered by private-sector employers. PBGC premiums are required to be paid annually and are calculated using a predefined calculation that includes interest rates to discount a plan’s vested benefits. During the second quarter of 2024, the Company’s defined benefit pension plan elected to use an alternative methodology to calculate the prescribed interest rate in determining premiums for plan year 2023, which resulted in a refund of $38 million in previously paid premiums.

Components of net cost (benefit) for pension and other postretirement plans
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Pension benefits
Service cost	$	(7)	$	32	$	26	$	65
Interest cost	58		58		116		118
Expected return on plan assets	(76)		(79)		(153)		(156)
Costs and expenses	(25)		11		(11)		27
Remeasurement of projected benefit obligation	(68)		(68)		(93)		55
Remeasurement of plan assets	60		30		85		(150)
Remeasurement (gains) losses	(8)		(38)		(8)		(95)
Pension net benefit	$	(33)	$	(27)	$	(19)	$	(68)
Postretirement benefits
Service cost	$	—	$	—	$	—	$	—
Interest cost	3		2		5		5
Amortization of prior service credit	(1)		(6)		(1)		(12)
Costs and expenses	2		(4)		4		(7)
Remeasurement of projected benefit obligation	(1)		(2)		(3)		2
Remeasurement of plan assets	—		—		—		—
Remeasurement (gains) losses	(1)		(2)		(3)		2
Postretirement net cost (benefit)	$	1	$	(6)	$	1	$	(5)
Pension and postretirement benefits
Costs and expenses	$	(23)	$	7	$	(7)	$	20
Remeasurement (gains) losses	(9)		(40)		(11)		(93)
Total net benefit	$	(32)	$	(33)	$	(18)	$	(73)

Differences in actual experience and changes in other assumptions affect our pension and other postretirement obligations and expenses. Differences between expected and actual returns on plan assets affect remeasurement (gains) losses.

Pension and other postretirement service cost, interest cost, expected return on plan assets and

amortization of prior service credit 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 Statements of Operations.

Pension and postretirement benefits remeasurement gains and losses
	Three months ended June 30,				Six months ended June 30,
($ in millions)	2024		2023		2024		2023
Remeasurement of projected benefit obligation (gains) losses:
Discount rate	$	(57)	$	(73)	$	(98)	$	51
Other assumptions	(12)		3		2		6
Remeasurement of plan assets (gains) losses	60		30		85		(150)
Remeasurement (gains) losses	$	(9)	$	(40)	$	(11)	$	(93)

Remeasurement gains for the second quarter of 2024 primarily related to an increase in the liability discount rate and changes in other assumptions, partially offset by unfavorable asset performance compared to expected return on plan assets. Remeasurement gains in the first six months of 2024 primarily related to an increase in the liability discount rate, partially offset by unfavorable asset performance compared to expected return on plan assets.

The weighted average discount rate used to measure the pension benefit obligation increased to

5.62% at June 30, 2024 compared to 5.45% at March 31, 2024 and 5.35% at December 31, 2023 resulting in gains for the second quarter and first six months of 2024.

For the second quarter and first six months of 2024, the actual return on plan assets was lower than the expected return due to lower fixed income valuations from higher market yields, partially offset by higher public equity returns.