Employee Benefit Obligations

9 Months Ended

Sep. 30, 2020

17. Employee Benefit Obligations


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

Underfunded defined benefit pension liabilities	$	975	$	918
Less: Current portion		(24)		(24)
Long-term defined benefit pension liabilities		951		894
Long-term retiree medical liabilities		149		156
Deferred compensation plans		399		362
Other		74		74
	$	1,573	$	1,486

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


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

Ball-sponsored plans:
Service cost	$	16		$	4	$	20	$	13	$	2		$	15
Interest cost		18			14		32		26		17			43
Expected return on plan assets		(29)			(22)		(51)		(29)		(26)			(55)
Amortization of prior service cost		—			1		1		1		—			1
Recognized net actuarial loss		10			1		11		5		1			6
Settlement losses		5	(a)		—		5		—		8	(a)		8
Total net periodic benefit cost	$	20		$	(2)	$	18	$	16	$	2		$	18

(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. See Note 6 for further details.


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

Ball-sponsored plans:
Service cost	$	48		$	12	$	60	$	37	$	8		$	45
Interest cost		56			43		99		76		53			129
Expected return on plan assets		(91)			(64)		(155)		(86)		(81)			(167)
Amortization of prior service cost		1			2		3		1		2			3
Recognized net actuarial loss		30			4		34		16		3			19
Settlement losses		102	(a)		—		102		—		8	(a)		8
Total net periodic benefit cost	$	146		$	(3)	$	143	$	44	$	(7)		$	37

(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. See Note 6 for further details.

Non-service pension income of $7 million and $19 million for the three and nine months ended September 30, 2020, respectively, and income of $5 million and $16 million for the three and nine months ended September 30, 2019, respectively, is included in selling, general, and administrative (SG&A) expenses.

Contributions to the company’s defined benefit pension plans were $92 million for the first nine months of 2020 compared to $154 million for the first nine months of 2019, and such contributions are expected to be approximately $100 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.

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 in the second quarter of 2020 and for the company’s Canadian pension plans in the third quarter of 2019, totaling approximately $245 million and $32 million, respectively. These purchases triggered settlement accounting and resulted in the recognition of settlement losses recorded in business consolidation and other activities of $102 million in 2020 and $8 million in 2019. The company’s pension obligations were remeasured during the second quarter of 2020 for the impacted plans, and the 2019 annuity purchase settled Ball’s Canadian defined benefit pension obligation in full.