Benefit Plans

12 Months Ended

Dec. 31, 2024

Retirement Benefits [Abstract]

Benefit Plans

Note 19 Benefit Plans

Pension and other postretirement plans

Approximately 90% of the Company’s benefit obligation relates to its U.S. qualified defined benefit pension plan, which covers most U.S. employees. Benefits under the U.S. pension plans are based upon the employee’s length of service, eligible annual compensation and, prior to January 1, 2014, either a cash balance or final average pay formula. A cash balance formula applies to all eligible employees hired after August 1, 2002. Eligible employees hired before August 1, 2002 chose between the cash balance formula and the final average pay formula. In July 2013, the Company amended its primary plans effective January 1, 2014 to introduce a new cash balance formula to replace the previous formulas (including the final average pay formula and the previous cash balance formula) under which eligible employees

accrue benefits. As of December 31, 2024, 79% of the benefit obligation of our U.S. qualified defined benefit pension plan is related to the former final average pay formula.

The Company also provides a medical coverage subsidy for eligible employees hired before January 1, 2003, including their eligible dependents, when they retire and certain life insurance benefits for eligible retirees (“postretirement benefits”). Effective January 1, 2021, the Company eliminated the medical coverage subsidy for employees who were not eligible to retire as of December 31, 2020.

Certain employees may become eligible for a medical subsidy if they retire in accordance with the terms of the applicable plans and are insured under the Company’s group plans or other approved plans in

accordance with the plan’s participation requirements. The Company shares the cost of retiree medical benefits with non-Medicare-eligible retirees based on years of service, with the Company’s share being subject to a 5% limit on future annual medical cost inflation after retirement. For Medicare-eligible retirees, the Company provides a fixed Company contribution based on years of service and other factors, which is not subject to adjustments for inflation.

The Company has reserved the right to modify or terminate its benefit plans at any time and for any reason.

Obligations and funded status

The Company calculates benefit obligations based upon generally accepted actuarial methodologies using the projected benefit obligation (“PBO”) for

pension plans and the accumulated postretirement benefit obligation (“APBO”) for other postretirement plans. Pension costs and other postretirement obligations are determined using a December 31 measurement date. The benefit obligations represent the actuarial present value of all benefits attributed to employee service rendered as of the measurement date. The PBO is measured using the pension benefit formulas and assumptions. A plan’s funded status is calculated as the difference between the benefit obligation and the fair value of plan assets. The Company’s funding policy for the pension plans is to make contributions at a minimum level that is at least in accordance with regulations under the Internal Revenue Code (“IRC”) and generally accepted actuarial principles. The Company’s other postretirement benefit plans are not funded.

Change in benefit obligation, plan assets and funded status
	As of December 31,
	Pension benefits				Postretirement benefits
($ in millions)	2024		2023		2024		2023
Change in benefit obligation
Benefit obligation, beginning of year	$	4,584	$	4,511	$	185	$	203
Service cost	80		132		—		1
Interest cost	230		239		9		10
Participant contributions	—		—		13		16
Remeasurement of benefit obligation (gains) losses	(125)		125		(4)		(4)
Benefits paid	(329)		(379)		(37)		(42)
Translation adjustment and other	1		(44)		(3)		1
Benefit obligation, end of year	$	4,441	$	4,584	$	163	$	185
Change in plan assets
Fair value of plan assets, beginning of year	$	4,440	$	4,430
Actual return on plan assets	214		418
Employer contribution	45		14
Benefits paid	(329)		(379)
Translation adjustment and other	(2)		(43)
Fair value of plan assets, end of year	$	4,368	$	4,440
Funded status (1)	$	(73)	$	(144)	$	(163)	$	(185)
Amounts recognized in AOCI
Unamortized pension and other postretirement prior service credit	$	—	$	—	$	(15)	$	(18)

(1)The funded status is recorded within other liabilities and accrued expenses on the Consolidated Statements of Financial Position.

Changes in items not yet recognized as a component of net cost for pension and other postretirement plans
($ in millions)	Pension benefits		Postretirement benefits
Items not yet recognized as a component of net cost – December 31, 2023	$	—	$	(18)
Prior service credit amortized to net cost	—		1
Translation adjustment and other	—		2
Items not yet recognized as a component of net cost – December 31, 2024	$	—	$	(15)

The prior service credit is recognized as a component of net cost for pension and other postretirement plans amortized over the average remaining service period of active employees expected to receive benefits.

The accumulated benefit obligation (“ABO”) for all defined benefit pension plans was $4.36 billion and

$4.48 billion as of December 31, 2024 and 2023, respectively. The ABO is the actuarial present value of all benefits attributed by the pension benefit formula

to employee service rendered at the measurement date. However, it differs from the PBO due to the exclusion of an assumption as to future compensation levels.

The PBO, ABO and fair value of plan assets for the Company’s pension plans with an ABO in excess of plan assets were $74 million, $72 million and zero, respectively, as of December 31, 2024 and $4.27 billion, $4.18 billion and $4.09 billion, respectively, as of December 31, 2023. Included in the accrued benefit

cost of the pension benefits are certain unfunded non-qualified plans with accrued benefit costs of $74 million and $78 million for 2024 and 2023, respectively.

Components of net cost (benefit) for pension and other postretirement plans
	For the years ended December 31,
	Pension benefits						Postretirement benefits						Total pension and postretirement benefits
($ in millions)	2024		2023		2022		2024		2023		2022		2024		2023		2022
Service cost	$	80	$	132	$	101	$	—	$	1	$	1	$	80	$	133	$	102
Interest cost	230		239		219		9		10		10		239		249		229
Expected return on plan assets	(306)		(306)		(371)		—		—		—		(306)		(306)		(371)
Amortization of prior service credit	—		—		(27)		(1)		(21)		(25)		(1)		(21)		(52)
Costs and expenses	4		65		(78)		8		(10)		(14)		12		55		(92)
Remeasurement of benefit obligation	(125)		125		(1,382)		(4)		(4)		(62)		(129)		121		(1,444)
Remeasurement of plan assets	92		(112)		1,560		—		—		—		92		(112)		1,560
Remeasurement (gains) losses	(33)		13		178		(4)		(4)		(62)		(37)		9		116
Total net (benefit) cost	$	(29)	$	78	$	100	$	4	$	(14)	$	(76)	$	(25)	$	64	$	24

The service cost component is the actuarial present value of the benefits attributed by the plans’ benefit formula to services rendered by the employees during the period.

Service cost in 2024 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.

Interest cost is the increase in the PBO over the period, resulting from the passage of time and calculated using the discount rate. Interest cost fluctuates as the discount rate changes and is also impacted by the related change in the size of the PBO.

The expected return on plan assets is determined as the product of the expected long-term rate of return on plan assets and the fair value of plan assets.

Pension and other postretirement service cost, interest cost, expected return on plan assets, amortization of prior service credit and curtailment gains and 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 Consolidated Statements of Operations.

Remeasurement gains and losses relate to changes in discount rates, the differences between actual return on plan assets and the expected long-term rate of return on plan assets, and differences between actual plan experience and actuarial assumptions.

Weighted average assumptions used to determine net pension cost and net postretirement benefit cost
	For the years ended December 31,
	Pension benefits						Postretirement benefits
	2024		2023		2022		2024		2023		2022
Discount rate	5.36	%	5.65	%	4.27	%	5.30	%	5.66	%	4.24	%
Expected long-term rate of return on plan assets	7.34		7.35		7.06		n/a		n/a		n/a
Cash balance interest credit rate	4.25		4.05		2.74		n/a		n/a		n/a

Weighted average assumptions used to determine benefit obligations
	As of December 31,
	Pension benefits				Postretirement benefits
	2024		2023		2024		2023
Discount rate	5.71	%	5.35	%	5.50	%	5.28	%
Cash balance interest credit rate	4.78		4.03		n/a		n/a

The weighted average health care cost trend rate used in measuring the accumulated postretirement

benefit cost is 6.8% for 2025, gradually declining to 4.5% in 2035 and remaining at that level thereafter.

Pension plan assets In general, the Company’s pension plan assets are managed in accordance with investment policies approved by pension investment committees. The purpose of the policies is to ensure the plans’ long-term ability to meet benefit obligations by prudently investing plan assets and Company contributions, while taking into consideration regulatory and legal requirements and current market conditions. The investment policies are reviewed periodically and specify target plan asset allocation by asset category. In addition, the policies specify various asset allocation and other risk limits. The target asset allocation takes the plans’ funding status into consideration, among other factors, including anticipated demographic changes or liquidity

requirements that may affect the funding status such as the potential impact of lump sum settlements as well as existing or expected market conditions. In general, the allocation has a lower overall investment risk when a plan is in a stronger funded status position since there is less economic incentive to take risk to increase the expected returns on the plan assets. The pension plans’ asset exposure within each asset category is tracked against widely accepted established benchmarks for each asset class with limits on variation from the benchmark established in the investment policy. Pension plan assets are regularly monitored for compliance with these limits and other risk limits specified in the investment policies.

Pension plan weighted average target asset allocation by asset category (1)
	As of December 31, 2024
Equity securities	25% - 42%
Fixed income securities	53% - 69%
Limited partnership interests	1% - 28%
Short-term investments and other	NA
Bank loans	0% - 12%

(1)The target asset allocation considers risk-based exposure including exposure provided through derivatives.

The target asset allocation for an asset category may be achieved either through direct investment holdings, through replication using derivative instruments (e.g., futures or swaps) or net of hedges using derivative instruments to reduce exposure to an asset category. The net notional amount of derivatives used for replication and non-hedging strategies is limited to 130% of total U.S. plan assets. Derivatives are not used to increase portfolio exposure above asset allocation limits. Market performance of the different asset categories may, from time to time, cause

deviation from the target asset allocation. The asset allocation mix is reviewed on a periodic basis and rebalanced to bring the allocation within the target ranges.

Outside the target asset allocation, the pension plans participate in a securities lending program to enhance returns. As of both December 31, 2024 and 2023, fixed income securities are lent out and cash collateral is invested in short-term investments.

Fair values of pension plan assets as of December 31, 2024
($ 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, 2024
Equity securities	$	106		$	1		$	—		$	107
Fixed income securities:
Government bonds (1)	1,401			124			—			1,525
Corporate bonds (2)	—			985			—			985
Short-term investments	78			142			—			220
Free-standing derivatives:
Assets	—			9			—			9
Liabilities	(3)			(9)			—			(12)
Bank loans	—			—			81			81
Total plan assets at fair value	$	1,582		$	1,252		$	81		$	2,915
% of total plan assets at fair value	54.2		%	43.0		%	2.8		%	100.0		%
Investments measured using the net asset value practical expedient										1,570
Securities lending obligation (3)										(158)
Derivatives counterparty and cash collateral netting										(8)
Other net plan assets (4)										49
Total reported plan assets										$	4,368

Fair values of pension plan assets as of December 31, 2023
($ 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, 2023
Equity securities	$	132		$	28		$	—		$	160
Fixed income securities:
Government bonds (1)	323			1,007			—			1,330
Corporate bonds (2)	—			794			—			794
Short-term investments	154			144			—			298
Free-standing derivatives:
Assets	—			—			—			—
Liabilities	(1)			(8)			—			(9)
Other assets	1			—			—			1
Total plan assets at fair value	$	609		$	1,965		$	—		$	2,574
% of total plan assets at fair value	23.7		%	76.3		%	—		%	100.0		%
Investments measured using the net asset value practical expedient										$	2,019
Securities lending obligation (3)										(179)
Derivatives counterparty and cash collateral netting										8
Other net plan assets (4)										18
Total reported plan assets										$	4,440

(1)Includes U.S. government and agencies and foreign government bonds.

(2)Includes ABS securities.

(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 cash and cash equivalents, interest and dividends receivable and net receivables related to settlements of investment transactions, such as purchases and sales.

The fair values of pension plan assets are estimated using the same methodologies and inputs as those used to determine the fair values for the respective asset category of the Company. These methodologies and inputs are disclosed in Note 7.

Rollforward of Level 3 plan assets during December 31, 2024
			Actual return on plan assets:
($ in millions)	Balance as of December 31, 2023		Relating to assets sold during the period		Relating to assets still held at the reporting date		Purchases, sales and settlements, net		Net transfers in (out) of Level 3		Balance as of December 31, 2024
Bank loans	$	—	$	—	$	—	$	81	$	—	$	81
Total Level 3 plan assets	$	—	$	—	$	—	$	81	$	—	$	81

There were no Level 3 assets in 2023 and 2022.

The expected long-term rate of return on plan assets reflects the average rate of earnings expected on plan assets. The Company’s assumption for the expected long-term rate of return on plan assets is evaluated annually giving consideration to appropriate data including, but not limited to, the plan asset allocation, forward-looking expected returns for the period over which benefits will be paid, historical returns on plan assets and other relevant market data. Given the long-term forward-looking nature of this assumption, the actual returns in any one year do not immediately result in a change to the expected long-term rate of return on plan assets. In consideration of the targeted plan asset allocation, the Company evaluated expected returns using sources including: historical average asset class returns from independent nationally recognized providers of this type of data blended together using the asset allocation policy weights for the Company’s pension plans; asset class return forecasts developed by employees with relevant expertise in such forecasts and who are independent from those charged with managing the pension plan assets; and expected portfolio returns from a proprietary simulation methodology of a widely recognized external investment consulting firm that performs asset

allocation and actuarial services for corporate pension plan sponsors. The above sources support the Company’s weighted average long-term rate of return on plan assets assumption of 7.34% used for 2024 and an estimate of 7.58% that will be used for 2025. As of the 2024 measurement date, the arithmetic average of the annual actual return on plan assets for the most recent 10 and 5 years was 7.8% and 6.0%, respectively.

Cash flows There was no required cash contribution necessary to satisfy the minimum funding requirement under the IRC for the tax qualified pension plan for the year ended December 31, 2024. The company made a discretionary contribution of $35 million to the qualified pension plan in October 2024.

The Company currently plans to contribute $16 million to its unfunded non-qualified plans and zero to both its primary and other qualified funded pension plans in 2025.

The Company contributed $24 million and $26 million to the postretirement benefit plans in 2024 and 2023, respectively. Contributions by participants were $13 million and $16 million in 2024 and 2023, respectively.

Estimated future benefit payments expected to be paid in the next 10 years
	As of December 31, 2024
($ in millions)	Pension benefits		Postretirement benefits
2025	$	489	$	21
2026	486		20
2027	466		19
2028	455		17
2029	450		15
2030-2034	1,772		54
Total benefit payments	$	4,118	$	146

Allstate 401(k) Savings Plan

Employees of the Company, with the exception of those employed by Allstate Protection Plans, international operations and Allstate Identity Protection subsidiaries are eligible to become members of the Allstate 401(k) Savings Plan (“Allstate Plan”). The Company’s contributions are based on the Company’s matching obligation. The Company is responsible for funding its contribution to the Allstate Plan.

The Company’s contribution to the Allstate Plan was $126 million, $124 million and $131 million in 2024, 2023 and 2022, respectively.

Allstate’s Canadian, Protection Plans and Identity Protection subsidiaries sponsor defined contribution plans for their eligible employees. Expense for subsidiary sponsored defined contribution plans was $14 million, $14 million and $9 million in 2024, 2023 and 2022, respectively.

The Allstate Identity Protection 401(k) plan and the Allstate Protection Plans 401(k) Plan were merged into the Allstate Plan effective January 1, 2025.