Employee Benefit Obligations

6 Months Ended

Jun. 30, 2020

17. Employee Benefit Obligations


	June 30,		December 31,
($ in millions)	2020		2019

Underfunded defined benefit pension liabilities	$	1,034	$	918
Less: Current portion		(24)		(24)
Long-term defined benefit pension liabilities		1,010		894
Long-term retiree medical liabilities		162		156
Deferred compensation plans		354		362
Other		48		74
	$	1,574	$	1,486

Components of net periodic benefit cost associated with the company’s defined benefit pension plans were as follows:


	Three Months Ended June 30,
	2020							2019
($ in millions)	U.S.			Foreign		Total		U.S.		Foreign		Total

Ball-sponsored plans:
Service cost	$	16		$	4	$	20	$	12	$	3	$	15
Interest cost		18			15		33		25		18		43
Expected return on plan assets		(31)			(21)		(52)		(29)		(27)		(56)
Amortization of prior service cost		1			—		1		—		1		1
Recognized net actuarial loss		10			2		12		5		1		6
Settlement losses		97	(a)		—		97		—		—		—
Total net periodic benefit cost	$	111		$	—	$	111	$	13	$	(4)	$	9

(a)	Includes settlement losses related to the purchase of non-participating annuities and lump-sum payments which have been recorded in business consolidation and other activities.


	Six Months Ended June 30,
	2020							2019
($ in millions)	U.S.			Foreign		Total		U.S.		Foreign		Total

Ball-sponsored plans:
Service cost	$	32		$	8	$	40	$	24	$	6	$	30
Interest cost		38			29		67		50		36		86
Expected return on plan assets		(62)			(42)		(104)		(57)		(55)		(112)
Amortization of prior service cost		1			1		2		—		2		2
Recognized net actuarial loss		20			3		23		11		2		13
Settlement losses		97	(a)		—		97		—		—		—
Total net periodic benefit cost	$	126		$	(1)	$	125	$	28	$	(9)	$	19

(a)	Includes settlement losses related to the purchase of non-participating annuities and lump-sum payments which have been recorded in business consolidation and other activities.

Non-service pension income of $6 million and $12 million for the three and six months ended June 30, 2020, respectively, and income of $6 million and $11 million for the three and six months ended June 30, 2019, respectively, is included in selling, general, and administrative (SG&A) expenses.

Contributions to the company’s defined benefit pension plans were $11 million for the first six months of 2020 compared to $73 million for the first six months of 2019, and such contributions are expected to be approximately $90 million for the full year of 2020. This estimate may change based on changes to the U.S. Pension Protection Act, the effects of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the actual returns achieved on plan assets, among other factors.

In April 2020, Ball completed the purchase of non-participating group annuity contracts and lump-sum payments for a portion of the company’s U.S. pension benefit obligations totaling approximately $245 million. The purchase triggered settlement accounting and resulted in the recognition of settlement losses recorded in business consolidation and other activities of $97 million. The company’s pension obligations were remeasured for the impacted plans.