Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Employee Benefit Plans

NOTE 14—EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

We sponsor a contributory Associate Savings Plan (the “Plan”) in which all full-time and part-time associates over the age of 18 are eligible to participate. We make non-elective contributions to each eligible associate’s account and match a portion of associate contributions. We also sponsor a voluntary non-qualified deferred compensation plan in which select groups of employees are eligible to participate. We make contributions to this plan based on participants’ deferral of salary, bonuses and other eligible pay. In addition, we match participants’ excess compensation (compensation over the Internal Revenue Service (“IRS”) compensation limit) less deferrals. We contributed a total of $378 million, $350 million and $316 million to these plans during the years ended December 31, 2021, 2020 and 2019, respectively.

Defined Benefit Pension and Other Postretirement Benefit Plans

We sponsor several frozen plans, including a qualified defined benefit pension plan, several non-qualified defined benefit pension plans, and a plan that provides other postretirement benefits, including medical and life insurance coverage. Our pension plans and the other postretirement benefit plan are valued using December 31 as the measurement date each year. Our policy is to amortize prior service amounts on a straight-line basis over the average remaining years of service to full eligibility for benefits of active plan participants.

Table 14.1: Changes in Benefit Obligation and Plan Assets

	Defined Pension  Benefits				Other Postretirement Benefits
(Dollars in millions)	2021		2020		2021		2020
Change in benefit obligation:
Accumulated benefit obligation as of January 1,	$	178	$	165	$	21	$	27
Service cost	1		1		0		0
Interest cost	4		5		0		1
Benefits paid	(12)		(11)		(2)		(2)
Actuarial loss (gain)	(8)		18		(3)		(5)
Accumulated benefit obligation as of December 31,	$	163	$	178	$	16	$	21
Change in plan assets:
Fair value of plan assets as of January 1,	$	274	$	254	$	6	$	6
Actual return on plan assets	10		30		1		1
Employer contributions	1		1		1		1
Benefits paid	(12)		(11)		(2)		(2)
Fair value of plan assets as of December 31,	$	273	$	274	$	6	$	6
Over (under) funded status as of December 31,	$	110	$	96	$	(10)	$	(15)

	Defined Pension  Benefits				Other Postretirement Benefits
(Dollars in millions)	2021		2020		2021		2020
Balance sheet presentation as of December 31,
Other assets	$	121	$	108	$	0	$	0
Other liabilities	(11)		(12)		(10)		(15)
Net amount recognized as of December 31,	$	110	$	96	$	(10)	$	(15)

Net periodic benefit gain for our defined benefit pension plans and other postretirement benefit plan totaled $12 million, $8 million, and $10 million in 2021, 2020 and 2019, respectively. We recognized a pre-tax gain of $4 million, $4 million and $18 million in other comprehensive income for our defined benefit pension plans and other postretirement benefit plan in 2021, 2020 and 2019, respectively.

Pre-tax amounts recognized in AOCI that have not yet been recognized as a component of net periodic benefit cost consist of net actuarial loss of $33 million and $40 million for our defined benefit pension plans as of December 31, 2021 and 2020, respectively, and net actuarial gain of $3 million and $6 million for our other postretirement benefit plan as of December 31, 2021 and 2020, respectively. There was no meaningful prior service cost recognized in AOCI.

Plan Assets and Fair Value Measurement

Plan assets are invested using a total return investment approach whereby a mix of equity securities and debt securities are used to preserve asset values, diversify risk and enhance our ability to achieve our benchmark for long-term investment return. Investment strategies and asset allocations are based on careful consideration of plan liabilities, the plan’s funded status and our financial condition. Investment performance and asset allocation are measured and monitored on a daily basis.

As of December 31, 2021 and 2020, our plan assets totaled $279 million and $280 million, respectively. We invested substantially all our plan assets in common collective trusts, which primarily consist of domestic and international equity securities, government securities and corporate and municipal bonds. Our plan assets were classified as Level 2 in the fair value hierarchy as of December 31, 2021 and 2020. For information on fair value measurements, including descriptions of Level 1, 2 and 3 of the fair value hierarchy and the valuation methods we utilize, see “Note 16—Fair Value Measurement.”

Expected Future Benefit Payments

As of December 31, 2021, the benefits expected to be paid in the next ten years totaled $108 million for our defined pension benefit plans and $12 million for our other postretirement benefit plan, respectively.