Truist provides defined benefit retirement plans qualified under the IRC that cover most employees. Benefits are based on years of service, age at retirement and the employee's compensation during the five highest consecutive years of earnings within the last ten years of employment. The Company's retirement plans obtained through the Merger remained separate as of December 31, 2019.

In addition, supplemental retirement benefits are provided to certain key officers under supplemental defined benefit executive retirement plans, which are not qualified under the IRC. Although technically unfunded plans, Rabbi Trusts and insurance policies on the lives of certain of the covered employees are available to finance future benefits.

Financial data relative to qualified and nonqualified defined benefit pension plans is summarized in the following tables for the years indicated. On the Consolidated Balance Sheets, the qualified pension plan net asset is recorded as a component of Other assets and the nonqualified pension plans net liability is recorded as a component of Other liabilities. The data is calculated using an actuarial measurement date of December 31.


Year Ended December 31, (Dollars in millions)	Location	2019			2018			2017
Net periodic pension cost:
Service cost	Personnel expense	$	214		$	238		$	200
Interest cost	Other expense	226			201			192
Estimated return on plan assets	Other expense	(460)			(448)			(372)
Net amortization and other	Other expense	111			81			75
Net periodic benefit cost		91			72			95
Pre-tax amounts recognized in OCI:
Prior service credit (cost)		—			—			30
Net actuarial loss (gain)		62			289			137
Net amortization		(110)			(81)			(75)
Net amount recognized in OCI		(48)			208			92
Total net periodic pension costs (income) recognized in total comprehensive income, pre-tax		$	43		$	280		$	187
Weighted average assumptions used to determine net periodic pension cost:
Discount rate		4.43		%	3.79		%	4.43		%
Expected long-term rate of return on plan assets		7.00			7.00			7.00
Assumed long-term rate of annual compensation increases		4.50			4.50			4.50

The weighted average expected long-term rate of return on plan assets represents the average rate of return expected to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, Truist considers long-term compound annualized returns of historical market data for each asset category, as well as historical actual returns on the plan assets. Using this reference information, the Company develops forward-looking return expectations for each asset category and a weighted average expected long-term rate of return for the plan based on target asset allocations contained in the Company's Investment Policy Statement. For 2020, the expected rate of return on plan assets is 6.9%.


Year Ended December 31, (Dollars in millions)	Qualified Plan												Nonqualified Plans
				2019				2018				2019				2018
Projected benefit obligation, January 1	$	4,697			$	4,939			$	386			$	387
Service cost	199				222				15				16
Interest cost	209				186				17				15
Actuarial (gain) loss	1,049				(537)				79				(19)
Benefits paid	(125)				(113)				(13)				(13)

Acquisitions	—				—				—				—
Projected benefit obligation, December 31	$	6,029			$	4,697			$	484			$	386
Accumulated benefit obligation, December 31	$	5,069			$	4,035			$	359			$	293
Weighted average assumptions used to determine projected benefit obligations:
Weighted average assumed discount rate	3.45		%		4.43		%		3.45		%		4.43		%
Assumed rate of annual compensation increases	4.50				4.50				4.50				4.50

Effective December 31, 2017, the qualified defined benefit plan was amended and a portion of the accrued benefits of participants in the nonqualified plan were shifted to the qualified plan. Affected teammates continue to participate in the nonqualified plan for benefits earned in 2017 and later. In conjunction with this shift, a minimum benefit was established under the qualified plan which was discontinued at December 31, 2019.



Year Ended December 31, (Dollars in millions)	Qualified Plan									Nonqualified Plans
			2019			2018			2019			2018
Fair value of plan assets, January 1	$	5,968		$	6,309		$	—		$	—
Actual return on plan assets	1,525			(397)			—			—
Employer contributions	876			169			13			13
Benefits paid	(125)			(113)			(13)			(13)

Fair value of plan assets, December 31	$	8,244		$	5,968		$	—		$	—
Funded status, December 31	$	2,215		$	1,271		$	(484)		$	(386)


Year Ended December 31, (Dollars in millions)	Qualified Plan									Nonqualified Plans
			2019			2018			2019			2018
Prior service credit (cost)	$	(114)		$	(140)		$	96		$	115
Net actuarial loss	(1,246)			(1,349)			(217)			(156)
Net amount recognized	$	(1,360)		$	(1,489)		$	(121)		$	(41)

Truist makes contributions to the qualified pension plan in amounts between the minimum required for funding and the maximum amount deductible for federal income tax purposes. Truist made discretionary contributions of $305 million during the first quarter of 2020. Management may make additional contributions in 2020. For the nonqualified plans, the employer contributions are based on benefit payments.

The Company's primary total return objective is to achieve returns that, over the long term, will fund retirement liabilities and provide for the desired plan benefits in a manner that satisfies the fiduciary requirements of the Employee Retirement Income Security Act of 1974. The plan assets have a long-term time horizon that runs concurrent with the average life expectancy of the participants. As such, the Plan can assume a time horizon that extends well beyond a full market cycle, and can assume an above-average level of risk, as measured by the standard deviation of annual return. The investments are broadly diversified among economic sector, industry, quality and size in order to reduce risk and to produce incremental return. Within approved guidelines and restrictions, investment managers have wide discretion over the timing and selection of individual investments.

Truist periodically reviews its asset allocation and investment policy and makes changes to its target asset allocation. Truist has established guidelines within each asset category to ensure the appropriate balance of risk and reward. The fair values of pension plan assets by asset category for the qualified plan are reflected in the table below. Amounts carried using net asset values and accrued income are excluded from the table.


December 31, (Dollars in millions)	Target Allocation									2019															2018
			Min			Max			Total			Level 1			Level 2			Total			Level 1			Level 2
Cash and cash-equivalents							$	196		$	196		$	—		$	21		$	21		$	—
U.S. equity securities (1)	30	%		50	%		3,489			1,782			1,707			2,323			1,204			1,119
International equity securities	11			18			1,094			250			844			797			161			636
Fixed income securities	35			53			3,105			11			3,094			2,528			11			2,517
Total							$	7,884		$	2,239		$	5,645		$	5,669		$	1,397		$	4,272

International equity securities include a common/commingled fund that consists of assets from several accounts, pooled together, to reduce management and administration costs. Investments measured at fair value using the net asset value per share or equivalent as a practical expedient are not required to be classified in the fair value hierarchy. The plan held alternative investments valued using net asset values totaling $341 million and $274 million at December 31, 2019 and 2018, respectively.

The Company maintains a frozen and funded noncontributory qualified retirement plan, obtained from SunTrust in the Merger. The SunTrust retirement plan covers employees meeting certain service requirements. Benefits are based on salary and years of service. The plan includes a cash balance formula where personal pension accounts continue to be credited with interest each year.

The Company also maintains, as a result of the Merger, various frozen, unfunded, noncontributory nonqualified supplemental defined benefit pension plans that cover key officers and provide benefits based on salary and years of service.

Certain health care and life insurance benefits are provided to retired employees. At the option of the Company, retirees may continue certain health and life insurance benefits if they meet specific age and service requirements at the time of retirement. The health care plans are contributory with participant contributions adjusted annually, and the life insurance plans are noncontributory. Certain retiree health benefits are funded in a Retiree Health Trust. Additionally, certain retiree life insurance benefits are funded in a VEBA.


Year Ended December 31, (Dollars in millions)	Location	2019
Net periodic pension cost:

Interest cost	Other expense	$	7
Estimated return on plan assets	Other expense	(21)

Net periodic benefit cost (income)		(14)
Pre-tax amounts recognized in OCI:

Net actuarial loss (gain)		(28)

Net amount recognized in OCI		(28)
Total net periodic pension cost (income) recognized in total comprehensive income, pre-tax		$	(42)
Weighted average assumptions used to determine net periodic pension cost:
Discount rate		3.22		%
Expected long-term rate of return on plan assets		6.90


Year Ended December 31, (Dollars in millions)	Qualified Plan				Nonqualified Plans
				2019				2019
Projected benefit obligation, December 6	$	2,800			$	72

Interest cost	7				—
Actuarial loss (gain)	(7)				—
Benefits paid	(10)				—

Special termination benefits	—				1
Projected benefit obligation, December 31	$	2,790			$	73
Accumulated benefit obligation, December 31	$	2,790			$	73
Weighted average assumptions used to determine projected benefit obligations:
Weighted average assumed discount rate	3.22		%		3.22		%



Year Ended December 31, (Dollars in millions)	Qualified Plan			Nonqualified Plans
			2019			2019
Fair value of plan assets, December 6	$	3,303		$	—
Actual return on plan assets	42			—
Employer contributions	820			—
Benefits paid	(10)			—
Fair value of plan assets, December 31	$	4,155		$	—
Funded status, December 31	$	1,365		$	(73)


December 31, (Dollars in millions)	Target Allocation									2019
			Min			Max			Total			Level 1			Level 2
Cash and cash-equivalents	—	%		10	%		$	99		$	99		$	—
U.S. equity securities	30			60			1,847			1,847			—
International equity securities	—			15			658			78			580
Fixed income securities	20			60			1,524			—			1,524
Total							$	4,128		$	2,024		$	2,104

Truist offers a 401(k) Savings Plan and other defined contribution plans that permit employees to contribute up to 50% of their cash compensation. For full-time employees who are 21 years of age or older with one year or more of service, Truist makes matching contributions of up to 6% of the employee's compensation. The Company's contribution expense for the 401(k) Savings Plan and nonqualified defined contribution plans totaled $152 million, $141 million and $133 million for the years ended December 31, 2019, 2018 and 2017, respectively. Certain employees of subsidiaries participate in the 401(k) Savings Plan with different matching formulas.

The heritage SunTrust 401(k) plan assumed in the Merger also provided for matching contributions of up to 6% of the employee's compensation. SunTrust also maintained a deferred compensation plan for certain executives that was assumed in the Merger.

At December 31, 2019, RSAs, RSUs and PSUs were outstanding from equity-based compensation plans that have been approved by shareholders and plans assumed from acquired entities. Those plans are intended to assist the Company in recruiting and retaining employees, directors and independent contractors and to associate the interests of eligible participants with those of Truist and its shareholders.

The majority of outstanding awards and awards available to be issued relate to plans that allow for accelerated vesting of awards for holders who retire and have met all retirement eligibility requirements or in connection with certain other events. Until vested, certain of these awards are subject to forfeiture under specified circumstances.

The fair value of RSUs and PSUs is based on the common stock price on the grant date less the present value of expected dividends that will be foregone during the vesting period. Substantially all awards are granted in February of each year. Grants to non-executive employees primarily consist of RSUs.


As of / For the Year Ended December 31, (Dollars in millions)	2019		2018		2017
Equity-based compensation expense	$	165	$	141	$	132
Income tax benefit from equity-based compensation expense	38		34		34
Intrinsic value of options exercised, and RSUs and PSUs that vested during the year	216		260		261
Grant date fair value of equity-based awards that vested during the year	134		139		116
Unrecognized compensation cost related to equity-based awards	274		135		132
Weighted-average life over which compensation cost is expected to be recognized	2.3 years		2.4 years		2.4 years



(Shares in thousands)	Units/Shares	Wtd. Avg. Grant Date Fair Value
Nonvested at January 1, 2019	12,060	$	38.03
Granted	3,950	44.44
Vested	(3,732)	35.78
Forfeited	(430)	42.45
Nonvested at December 31, 2019	11,848	40.71

There are various other employment contracts, deferred compensation arrangements and non-compete covenants with selected members of management and certain retirees. These plans and their obligations are not material to the financial statements.