Employee Benefit Obligations

9 Months Ended

Sep. 30, 2021

17. Employee Benefit Obligations


	September 30,		December 31,
($ in millions)	2021		2020

Underfunded defined benefit pension liabilities	$	718	$	955
Less: Current portion		(22)		(24)
Long-term defined benefit pension liabilities		696		931
Long-term retiree medical liabilities		148		156
Deferred compensation plans		417		439
Other		61		87
	$	1,322	$	1,613

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


	Three Months Ended September 30,
	2021						2020
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total

Ball-sponsored plans:
Service cost	$	20	$	4	$	24	$	16	$	4	$	20
Interest cost		12		9		21		18		14		32
Expected return on plan assets		(29)		(17)		(46)		(29)		(22)		(51)
Amortization of prior service cost		—		1		1		—		1		1
Recognized net actuarial loss		12		1		13		10		1		11
Settlement losses (a)		130		—		130		5		—		5
Total net periodic benefit cost	$	145	$	(2)	$	143	$	20	$	(2)	$	18

(a)	Includes settlement losses related to the purchase of non-participating annuities and lump-sum payments which were recorded in business consolidation and other activities. See Note 6 for further details.


	Nine Months Ended September 30,
	2021						2020
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total

Ball-sponsored plans:
Service cost	$	62	$	10	$	72	$	48	$	12	$	60
Interest cost		38		27		65		56		43		99
Expected return on plan assets		(91)		(49)		(140)		(91)		(64)		(155)
Amortization of prior service cost		1		2		3		1		2		3
Recognized net actuarial loss		36		4		40		30		4		34
Settlement losses (a)		130		—		130		102		—		102
Total net periodic benefit cost	$	176	$	(6)	$	170	$	146	$	(3)	$	143

(a)	Includes settlement losses related to the purchase of non-participating annuities and lump-sum payments which were recorded in business consolidation and other activities. See Note 6 for further details.

Non-service pension income of $11 million and $7 million for the three months ended September 30, 2021 and 2020, respectively, and income of $32 million and $19 million for the nine months ended September 30, 2021 and 2020, respectively, is included in selling, general, and administrative (SG&A) expenses in the unaudited condensed consolidated statement of earnings.

Contributions to the company’s defined benefit pension plans were $203 million for the first nine months of 2021 compared to $92 million for the first nine months of 2020, and such contributions are expected to be approximately $215 million for the full year of 2021. This estimate may change based on changes to the U.S. Pension Protection Act, the effects of the Coronavirus Aid, Relief, and Economic Security Act (CARES) and American Rescue Plan Act (ARPA) and the actual returns achieved on plan assets, among other factors.

Ball completed the purchase of non-participating group annuity contracts totaling approximately $325 million and lump-sum payments for certain of its U.S. pension benefit obligations that were transferred to an insurance company in the third quarter of 2021. The annuity purchase triggered settlement accounting and resulted in the recognition of settlement losses recorded of $130 million in business consolidation and other activities in the unaudited condensed consolidated statement of earnings.