Annual report pursuant to Section 13 and 15(d)

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)

v3.24.0.1
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Changes in benefit obligations and the fair value of plan assets for our pension and other postretirement benefit plans
The following table sets forth the changes in the benefit obligations and the fair value of plan assets for our pension and other postretirement benefit plans (in millions):
Pension Plans Other Postretirement Benefit Plans
Year Ended December 31, 2023 2022 2023 2022
Benefit obligation at beginning of year1
$ 6,376  $ 8,580  $ 495  $ 696 
Service cost 94  93  4  7 
Interest cost 322  232  27  17 
Participant contributions 5  5  9  11 
Foreign currency exchange rate changes 27  (152) (4) (4)
Amendments —  9  1  — 
Net actuarial loss (gain)2
375  (1,891) 14  (175)
Benefits paid (369) (500) (62) (57)
Divestitures —  (2) —  — 
Settlements (287)
3
 (26) (187)
4
 — 
Curtailments —  (1) —  — 
Special termination benefits 1  1  —  — 
Other —  28  —  — 
Benefit obligation at end of year1
$ 6,544  $ 6,376  $ 297  $ 495 
Fair value of plan assets at beginning of year $ 7,158  $ 8,905  $ 373  $ 419 
Actual return on plan assets 537  (1,101) 17  (55)
Employer contributions 44  33  —  — 
Participant contributions 5  5  7  9 
Foreign currency exchange rate changes 76  (258) —  — 
Benefits paid (300) (427) (34) — 
Settlements (260)
3
 (26) (187)
4
 — 
Other —  27  —  — 
Fair value of plan assets at end of year $ 7,260  $ 7,158  $ 176  $ 373 
Net asset (liability) recognized $ 716  $ 782  $ (121) $ (122)
1 For pension plans, the benefit obligation is the projected benefit obligation. For other postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation. The accumulated benefit obligation for our pension plans was $6,463 million and $6,307 million as of December 31, 2023 and 2022, respectively.
2 A change in the weighted-average discount rate assumption was the primary driver of net actuarial loss (gain) during 2023 and 2022. For our U.S. qualified pension plan, a decrease in the discount rate resulted in an actuarial loss of $129 million during 2023, and an increase in the discount rate resulted in an actuarial gain of $1,231 million during 2022. Additional drivers of net actuarial loss (gain) included other assumption updates and plan experience.
3 Settlements primarily related to the U.S. qualified pension plan, which was amended in 2023 to provide lump sum payment options to all former employees. The U.S. qualified pension plan made $259 million of lump sum payments in 2023, causing a plan settlement, which resulted in recognition of a $76 million settlement charge related to the acceleration of existing unrecognized losses.
4 In 2023, the Company settled its U.S. post-65 other postretirement benefit obligations such that retiree reimbursement accounts will be funded by an insurance company beginning January 1, 2025 for the lifetime of certain retirees and their eligible dependents. The transaction resulted in no change to underlying benefits or plan administration, but only to the future financing of the benefits. Pursuant to the settlement, the Company transferred $187 million of plan assets and liabilities to an insurer and recognized a $14 million net settlement credit related to the acceleration of existing unrecognized gains.
Pension and other benefit amounts recognized in consolidated balance sheets
Pension and other postretirement benefit plan amounts recognized in our consolidated balance sheets were as follows (in millions):
Pension Plans Other Postretirement Benefit Plans
December 31, 2023 2022 2023 2022
Other noncurrent assets $ 1,543  $ 1,558  $ —  $ 44 
Accounts payable and accrued expenses (67) (70) (4) (17)
Other noncurrent liabilities (760) (706) (117) (149)
Net asset (liability) recognized $ 716  $ 782  $ (121) $ (122)
Schedule of pension plans with projected benefit obligation in excess of fair value of plan assets
Certain of our pension plans have a projected benefit obligation in excess of the fair value of plan assets. For these plans, the projected benefit obligation and the fair value of plan assets were as follows (in millions):
December 31, 2023 2022
Projected benefit obligation $ 5,270  $ 972 
Fair value of plan assets 4,443  197 
Accumulated benefit obligations in excess of fair value of plan assets
Certain of our pension plans have an accumulated benefit obligation in excess of the fair value of plan assets. For these plans, the accumulated benefit obligation and the fair value of plan assets were as follows (in millions):
December 31, 2023 2022
Accumulated benefit obligation $ 5,165  $ 880 
Fair value of plan assets 4,379  138 
Certain of our other postretirement benefit plans have an accumulated postretirement benefit obligation in excess of the fair value of plan assets. For these plans, the accumulated postretirement benefit obligation and the fair value of plan assets were as follows (in millions):
December 31, 2023 2022
Accumulated postretirement benefit obligation $ 297  $ 166 
Fair value of plan assets 176  — 
Total pension assets for U.S. and non-U.S. plans
The following table presents total assets by asset class for our U.S. and non-U.S. pension plans (in millions):
U.S. Pension Plans Non-U.S. Pension Plans
December 31, 2023 2022 2023 2022
Cash and cash equivalents $ 203  $ 473  $ 172  $ 162 
Equity securities:
U.S.-based companies 457  509  721  679 
International-based companies 208  285  713  654 
Fixed-income securities:
Government bonds 848  793  538  445 
Corporate bonds and debt securities 426  384  153  115 
Mutual, pooled and commingled funds1
243  304  535  463 
Hedge funds/limited partnerships 1,038  915  19  21 
Real estate 367  417  9  7 
Derivative financial instruments —  —  33  (14)
Other 266  256  311  290 
Total pension plan assets2
$ 4,056  $ 4,336  $ 3,204  $ 2,822 
1 Mutual, pooled and commingled funds include investments in equity securities, fixed-income securities and combinations of both. There are a significant number of mutual, pooled and commingled funds from which investors can choose. The selection of the type of fund is dictated by the specific investment objectives and needs of a given plan. These objectives and needs vary greatly between plans.
2 Fair value disclosures related to our pension plan assets are included in Note 17. Fair value disclosures include, but are not limited to, the levels within the fair value hierarchy in which the fair value measurements in their entirety fall; a reconciliation of the beginning and ending balances of Level 3 assets; and information about the valuation techniques and inputs used to measure the fair value of our pension plan assets.
Other postretirement benefit plan assets
The following table presents total assets by asset class for our other postretirement benefit plans (in millions):
December 31, 2023 2022
Cash and cash equivalents $ 10  $ 43 
Equity securities:
U.S.-based companies 73  133 
International-based companies 4  4 
Fixed-income securities:
Government bonds 14  12 
Corporate bonds and debt securities 7  71 
Mutual, pooled and commingled funds 39  86 
Hedge funds/limited partnerships 18  14 
Real estate 6  6 
Other 5  4 
Total other postretirement benefit plan assets1
$ 176  $ 373 
1Fair value disclosures related to our other postretirement benefit plan assets are included in Note 17. Fair value disclosures include, but are not limited to, the levels within the fair value hierarchy in which the fair value measurements in their entirety fall and information about the valuation techniques and inputs used to measure the fair value of our other postretirement benefit plan assets.
Net periodic benefit cost for pension and other postretirement benefit plans
Net periodic benefit cost or income for our pension and other postretirement benefit plans consisted of the following (in millions):
Pension Plans Other Postretirement Benefit Plans
Year Ended December 31, 2023 2022 2021 2023 2022 2021
Service cost $ 94  $ 93  $ 97  $ 4  $ 7  $ 9 
Interest cost 322  232  183  27  17  15 
Expected return on plan assets1
(475) (558) (606) (14) (16) (17)
Amortization of prior service cost
   (credit)		 1  —  —  (3) (3) (2)
Amortization of net actuarial loss
   (gain)2
96  109  146  (5) —  4 
Net periodic benefit cost (income) 38  (124) (180) 9  5  9 
Settlement charges (credits) 81 
3
 (1) 117 
4
 (14)
5
 —  — 
Curtailment credits —  (1) (1) —  —  (1)
Special termination benefits 1  1  3  —  —  — 
Other —  1  —  —  —  — 
Total cost (income) $ 120  $ (124) $ (61) $ (5) $ 5  $ 8 
1The Company has elected to use the actual fair value of plan assets as the market-related value of plan assets in the determination of the expected return on plan assets.
2Actuarial gains and losses are amortized using a corridor approach. The gain/loss corridor is equal to 10% of the greater of the benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are generally amortized over the average future working lifetime of the plan participants.
3Settlements primarily related to the U.S. qualified pension plan, which was amended in 2023 to provide lump sum payment options to all former employees. The U.S. qualified pension plan made $259 million of lump sum payments in 2023, causing a plan settlement, which resulted in recognition of a $76 million settlement charge related to the acceleration of existing unrecognized losses.
4Settlement charges were primarily related to our strategic realignment initiatives. Refer to Note 19.
5In 2023, the Company settled its U.S. post-65 other postretirement benefit obligations such that retiree reimbursement accounts will be funded by an insurance company beginning January 1, 2025 for the lifetime of certain retirees and their eligible dependents. The transaction resulted in no change to underlying benefits or plan administration, but only to the future financing of the benefits. Pursuant to the settlement, the Company transferred $187 million of plan assets and liabilities to an insurer and recognized a $14 million net settlement credit related to the acceleration of existing unrecognized gains.
Changes and amounts in AOCI for pension and other postretirement benefit plans
The following table sets forth the pretax changes in AOCI for our pension and other postretirement benefit plans (in millions):
Pension Plans Other Postretirement Benefit Plans
Year Ended December 31, 2023 2022 2023 2022
Balance in AOCI at beginning of year $ (1,755) $ (2,125) $ 95  $ (4)
Recognized prior service cost (credit) 1  — 

(3) (3)
Recognized net actuarial loss (gain) 177  107  (19) — 
Prior service cost occurring during the year —  (9) (1) — 
Net actuarial gain (loss) occurring during the year (313) 232  (12) 104 
Net foreign currency translation adjustments (16) 40  1  (2)
Balance in AOCI at end of year $ (1,906) $ (1,755) $ 61  $ 95 
The following table sets forth the pretax amounts in AOCI for our pension and other postretirement benefit plans (in millions):
Pension Plans Other Postretirement Benefit Plans
December 31, 2023 2022 2023 2022
Prior service credit (cost) $ (17) $ (17) $ 20  $ 24 
Net actuarial gain (loss) (1,889) (1,738) 41  71 
Balance in AOCI at end of year $ (1,906) $ (1,755) $ 61  $ 95 
Certain weighted average assumptions used in computing the benefit obligations and net periodic benefit cost
Certain weighted-average assumptions used in computing the benefit obligations for our pension and other postretirement benefit plans were as follows:
Pension Plans Other Postretirement Benefit Plans
December 31, 2023 2022 2023 2022
Discount rate 5.00  % 5.50  % 6.25  % 6.00  %
Interest crediting rate 3.75  % 4.00  % N/A N/A
Rate of increase in compensation levels 4.00  % 3.75  % N/A N/A
Certain weighted-average assumptions used in computing net periodic benefit cost or income were as follows:
Pension Plans Other Postretirement Benefit Plans
Year Ended December 31, 2023 2022 2021 2023 2022 2021
Discount rate 5.50  % 3.00  % 2.50  % 6.00  % 3.25  % 2.75  %
Interest crediting rate 4.00  % 3.00  % 3.00  % N/A N/A N/A
Rate of increase in compensation levels 3.75  % 3.75  % 3.75  % N/A N/A N/A
Expected long-term rate of return on plan assets 6.75  % 7.00  % 7.25  % 3.75  % 4.00  % 4.25  %
Assumed health care cost trend rates
The weighted-average assumptions for health care cost trend rates were as follows:
December 31, 2023 2022
Health care cost trend rate assumed for next year 8.50  % 8.25  %
Rate to which the trend rate is assumed to decline (the ultimate trend rate) 6.00  % 5.50  %
Year that the trend rate reaches the ultimate trend rate 2029 2030
Estimated future benefit payments for pension and other postretirement benefit plans
The expected benefit payments for our pension and other postretirement benefit plans for the 10 years succeeding December 31, 2023 are as follows (in millions):
2024 2025 2026 2027 2028 2029-2033
Benefit payments for pension plans $ 654  $ 615  $ 611  $ 614  $ 489  $ 2,421 
Benefit payments for other postretirement
   benefit plans		 49  29  27  24  23  99 
Total $ 703  $ 644  $ 638  $ 638  $ 512  $ 2,520