Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans

v3.3.1.900
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans
 Employee Benefit Plans
Pension and Postretirement Plans
The Corporation sponsors a qualified noncontributory trusteed pension plan, a number of noncontributory nonqualified pension plans, and postretirement health and life plans that cover eligible employees. Non-U.S. pension plans sponsored by the Corporation vary based on the country and local practices.
In 2013, the Corporation merged a defined benefit pension plan, which covered eligible employees of certain legacy companies, into the legacy Bank of America Pension Plan (the Pension Plan). This merged plan is referred to as the Qualified Pension Plan. The merger resulted in a remeasurement of the qualified pension obligations and plan assets at fair value as of the merger date which increased accumulated OCI by $2.0 billion, net-of-tax. The benefit structures under the merged legacy plans have not changed and remain intact in the Qualified Pension Plan.
Benefits earned under the Qualified Pension Plan have been frozen. Thereafter, the cash balance accounts continue to earn investment credits or interest credits in accordance with the terms of the plan document.
It is the policy of the Corporation to fund no less than the minimum funding amount required by the Employee Retirement Income Security Act of 1974 (ERISA).
The Pension Plan has a balance guarantee feature for account balances with participant-selected earnings, applied at the time a benefit payment is made from the plan that effectively provides principal protection for participant balances transferred and certain compensation credits. The Corporation is responsible for funding any shortfall on the guarantee feature.
The Corporation has an annuity contract that guarantees the payment of benefits vested under a terminated U.S. pension plan (the Other Pension Plan). The Corporation, under a supplemental agreement, may be responsible for, or benefit from actual experience and investment performance of the annuity assets. The Corporation made no contribution under this agreement in 2015 or 2014. Contributions may be required in the future under this agreement.
The Corporation’s noncontributory, nonqualified pension plans are unfunded and provide supplemental defined pension benefits to certain eligible employees.
In addition to retirement pension benefits, certain benefits eligible to employees may become eligible to continue participation as retirees in health care and/or life insurance plans sponsored by the Corporation. Based on the other provisions of the individual plans, certain retirees may also have the cost of these benefits partially paid by the Corporation. These plans are referred to as the Postretirement Health and Life Plans.
The Pension and Postretirement Plans table summarizes the changes in the fair value of plan assets, changes in the projected benefit obligation (PBO), the funded status of both the accumulated benefit obligation (ABO) and the PBO, and the weighted-average assumptions used to determine benefit obligations for the pension plans and postretirement plans at December 31, 2015 and 2014. Amounts recognized at December 31, 2015 and 2014 are reflected in other assets, and in accrued expenses and other liabilities on the Consolidated Balance Sheet. The estimate of the Corporation’s PBO associated with these plans considers various actuarial assumptions, including assumptions for mortality rates and discount rates. As of December 31, 2014, the Corporation adopted mortality assumptions published by the Society of Actuaries in October 2014, adjusted to reflect observed and anticipated future mortality experience of the participants in the Corporation’s U.S. plans. The adoption of the new mortality assumptions resulted in an increase of the PBO of approximately $580 million at December 31, 2014. The discount rate assumptions are derived from a cash flow matching technique that utilizes rates that are based on Aa-rated corporate bonds with cash flows that match estimated benefit payments of each of the plans. The increase in the weighted-average discount rates in 2015 resulted in a decrease to the PBO of approximately $930 million at December 31, 2015. The decrease in the weighted-average discount rates in 2014 resulted in an increase to the PBO of approximately $1.9 billion at December 31, 2014.

The Corporation’s best estimate of its contributions to be made to the Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans in 2016 is $50 million, $103 million and $108 million, respectively. The Corporation does not expect to make a contribution to the Qualified Pension Plan in 2016.
 
 
 
 
 
 
 
 
Pension and Postretirement Plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan (1)
 
Non-U.S.
Pension Plans (1)
 
Nonqualified
and Other
Pension Plans (1)
 
Postretirement
Health and Life
Plans (1)
(Dollars in millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Change in fair value of plan assets
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Fair value, January 1
$
18,614

 
$
18,276

 
$
2,564

 
$
2,457

 
$
2,927

 
$
2,720

 
$
28

 
$
72

Actual return on plan assets
199

 
1,261

 
342

 
256

 
14

 
336

 
—

 
6

Company contributions
—

 
—

 
58

 
84

 
97

 
97

 
79

 
53

Plan participant contributions
—

 
—

 
1

 
1

 
—

 
—

 
127

 
129

Settlements and curtailments
—

 
—

 
(7
)
 
(5
)
 
—

 
—

 
—

 
—

Benefits paid
(851
)
 
(923
)
 
(78
)
 
(68
)
 
(233
)
 
(226
)
 
(247
)
 
(248
)
Federal subsidy on benefits paid
n/a

 
n/a

 
n/a

 
n/a

 
n/a

 
n/a

 
13

 
16

Foreign currency exchange rate changes
n/a

 
n/a

 
(142
)
 
(161
)
 
n/a

 
n/a

 
n/a

 
n/a

Fair value, December 31
$
17,962

 
$
18,614

 
$
2,738

 
$
2,564

 
$
2,805

 
$
2,927

 
$
—

 
$
28

Change in projected benefit obligation
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Projected benefit obligation, January 1
$
15,508

 
$
14,145

 
$
2,688

 
$
2,580

 
$
3,329

 
$
3,070

 
$
1,346

 
$
1,356

Service cost
—

 
—

 
27

 
29

 
—

 
1

 
8

 
8

Interest cost
621

 
665

 
93

 
109

 
122

 
133

 
48

 
58

Plan participant contributions
—

 
—

 
1

 
1

 
—

 
—

 
127

 
129

Plan amendments
—

 
—

 
(1
)
 
1

 
—

 
—

 
—

 
—

Settlements and curtailments
—

 
—

 
(7
)
 
(6
)
 
—

 
—

 
—

 
—

Actuarial loss (gain)
(817
)
 
1,621

 
(2
)
 
208

 
(165
)
 
351

 
(141
)
 
29

Benefits paid
(851
)
 
(923
)
 
(78
)
 
(68
)
 
(233
)
 
(226
)
 
(247
)
 
(248
)
Federal subsidy on benefits paid
n/a

 
n/a

 
n/a

 
n/a

 
n/a

 
n/a

 
13

 
16

Foreign currency exchange rate changes
n/a

 
n/a

 
(141
)
 
(166
)
 
n/a

 
n/a

 
(2
)
 
(2
)
Projected benefit obligation, December 31
$
14,461

 
$
15,508

 
$
2,580

 
$
2,688

 
$
3,053

 
$
3,329

 
$
1,152

 
$
1,346

Amount recognized, December 31
$
3,501

 
$
3,106

 
$
158

 
$
(124
)
 
$
(248
)
 
$
(402
)
 
$
(1,152
)
 
$
(1,318
)
Funded status, December 31
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Accumulated benefit obligation
$
14,461

 
$
15,508

 
$
2,479

 
$
2,582

 
$
3,052

 
$
3,329

 
n/a

 
n/a

Overfunded (unfunded) status of ABO
3,501

 
3,106

 
259

 
(18
)
 
(247
)
 
(402
)
 
n/a

 
n/a

Provision for future salaries
—

 
—

 
101

 
106

 
1

 
—

 
n/a

 
n/a

Projected benefit obligation
14,461

 
15,508

 
2,580

 
2,688

 
3,053

 
3,329

 
$
1,152

 
$
1,346

Weighted-average assumptions, December 31
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Discount rate
4.51
%
 
4.12
%
 
3.59
%
 
3.56
%
 
4.34
%
 
3.80
%
 
4.32
%
 
3.75
%
Rate of compensation increase
n/a

 
n/a

 
4.64

 
4.70

 
4.00

 
4.00

 
n/a

 
n/a

(1) 
The measurement date for the Qualified Pension Plan, Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans was December 31 of each year reported.
n/a = not applicable
Amounts recognized on the Consolidated Balance Sheet at December 31, 2015 and 2014 are presented in the table below.
 
 
 
 
 
 
 
 
Amounts Recognized on Consolidated Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and Life
Plans
(Dollars in millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Other assets
$
3,501

 
$
3,106

 
$
548

 
$
252

 
$
825

 
$
786

 
$
—

 
$
—

Accrued expenses and other liabilities
—

 
—

 
(390
)
 
(376
)
 
(1,073
)
 
(1,188
)
 
(1,152
)
 
(1,318
)
Net amount recognized at December 31
$
3,501

 
$
3,106

 
$
158

 
$
(124
)
 
$
(248
)
 
$
(402
)
 
$
(1,152
)
 
$
(1,318
)

Pension Plans with ABO and PBO in excess of plan assets as of December 31, 2015 and 2014 are presented in the table below. For the non-qualified plans not subject to ERISA or non-U.S. pension plans, funding strategies vary due to legal requirements and local practices.
 
 
 
 
 
 
 
 
Plans with PBO and ABO in Excess of Plan Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
(Dollars in millions)
2015
 
2014
 
2015
 
2014
PBO
$
574

 
$
583

 
$
1,075

 
$
1,190

ABO
551

 
563

 
1,074

 
1,190

Fair value of plan assets
183

 
206

 
1

 
2


Net periodic benefit cost of the Corporation’s plans for 2015, 2014 and 2013 included the following components.
 
 
 
 
 
 
 
 
 
 
 
 
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified Pension Plan
 
Non-U.S. Pension Plans
(Dollars in millions)
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Components of net periodic benefit cost (income)
 

 
 

 
 

 
 

 
 

 
 

Service cost
$
—

 
$
—

 
$
—

 
$
27

 
$
29

 
$
32

Interest cost
621

 
665

 
623

 
93

 
109

 
98

Expected return on plan assets
(1,045
)
 
(1,018
)
 
(1,024
)
 
(133
)
 
(137
)
 
(121
)
Amortization of prior service cost
—

 
—

 
—

 
1

 
1

 
—

Amortization of net actuarial loss
170

 
111

 
242

 
6

 
3

 
2

Recognized loss (gain) due to settlements and curtailments
—

 
—

 
17

 
—

 
2

 
(7
)
Net periodic benefit cost (income)
$
(254
)
 
$
(242
)
 
$
(142
)
 
$
(6
)
 
$
7

 
$
4

Weighted-average assumptions used to determine net cost for years ended December 31
 

 
 

 
 

 
 

 
 

 
 

Discount rate
4.12
%
 
4.85
%
 
4.00
%
 
3.56
%
 
4.30
%
 
4.23
%
Expected return on plan assets
6.00

 
6.00

 
6.50

 
5.27

 
5.52

 
5.50

Rate of compensation increase
n/a

 
n/a

 
n/a

 
4.70

 
4.91

 
4.37

 
 
 
 
 
 
 
 
 
 
 
 
 
Nonqualified and
Other Pension Plans
 
Postretirement Health
and Life Plans
(Dollars in millions)
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Components of net periodic benefit cost (income)
 

 
 

 
 

 
 

 
 

 
 

Service cost
$
—

 
$
1

 
$
1

 
$
8

 
$
8

 
$
9

Interest cost
122

 
133

 
120

 
48

 
58

 
54

Expected return on plan assets
(92
)
 
(124
)
 
(109
)
 
(1
)
 
(4
)
 
(5
)
Amortization of prior service cost
—

 
—

 
—

 
4

 
4

 
4

Amortization of net actuarial loss (gain)
34

 
25

 
25

 
(46
)
 
(89
)
 
(42
)
Recognized loss due to settlements and curtailments
—

 
—

 
2

 
—

 
—

 
6

Net periodic benefit cost (income)
$
64

 
$
35

 
$
39

 
$
13

 
$
(23
)
 
$
26

Weighted-average assumptions used to determine net cost for years ended December 31
 

 
 

 
 

 
 

 
 

 
 

Discount rate
3.80
%
 
4.55
%
 
3.65
%
 
3.75
%
 
4.50
%
 
3.65
%
Expected return on plan assets
3.26

 
4.60

 
3.75

 
6.00

 
6.00

 
6.50

Rate of compensation increase
4.00

 
4.00

 
4.00

 
n/a

 
n/a

 
n/a


n/a = not applicable
The asset valuation method used to calculate the expected return on plan assets component of net period benefit cost for the Qualified Pension Plan recognizes 60 percent of the prior year’s market gains or losses at the next measurement date with the remaining 40 percent spread equally over the subsequent four years.
Net periodic postretirement health and life expense was determined using the “projected unit credit” actuarial method. Gains and losses for all benefit plans except postretirement health care are recognized in accordance with the standard amortization provisions of the applicable accounting guidance. For the Postretirement Health Care Plans, 50 percent of the unrecognized gain or loss at the beginning of the fiscal year (or at subsequent remeasurement) is recognized on a level basis during the year.
Assumed health care cost trend rates affect the postretirement benefit obligation and benefit cost reported for the Postretirement Health and Life Plans. The assumed health care cost trend rate used to measure the expected cost of benefits covered by the Postretirement Health and Life Plans is 7.00 percent for 2016, reducing in steps to 5.00 percent in 2021 and later years. A one-percentage-point increase in assumed health care cost trend rates would have increased the service and interest costs, and the benefit obligation by $2 million and $34 million in 2015. A one-percentage-point decrease in assumed health care cost trend rates would have lowered the service and interest costs, and the benefit obligation by $2 million and $29 million in 2015.
The Corporation’s net periodic benefit cost (income) recognized for the plans is sensitive to the discount rate and expected return on plan assets. With all other assumptions held constant, a 25 basis point (bp) decline in the discount rate and expected return on plan asset assumptions would have resulted in an increase in the net periodic benefit cost for the Qualified Pension Plan recognized in 2015 of approximately $9 million and $44 million, and to be recognized in 2016 of approximately $9 million and $43 million. For the Postretirement Health and Life Plans, a 25 bp decline in the discount rate would have resulted in an increase in the net periodic benefit cost recognized in 2015 of approximately $9 million, and to be recognized in 2016 of approximately $8 million. For the Non-U.S. Pension Plans and the Nonqualified and Other Pension Plans, a 25 bp decline in discount rates would not have a significant impact on the net periodic benefit cost for 2015 and 2016.
Pretax amounts included in accumulated OCI for employee benefit plans at December 31, 2015 and 2014 are presented in the table below.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax Amounts Included in Accumulated OCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and
Life Plans
 
Total
(Dollars in millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Net actuarial loss (gain)
$
3,920

 
$
4,061

 
$
137

 
$
355

 
$
848

 
$
968

 
$
(150
)
 
$
(56
)
 
$
4,755

 
$
5,328

Prior service cost (credits)
—

 
—

 
(10
)
 
(9
)
 
—

 
—

 
16

 
20

 
6

 
11

Amounts recognized in accumulated OCI
$
3,920

 
$
4,061

 
$
127

 
$
346

 
$
848

 
$
968

 
$
(134
)
 
$
(36
)
 
$
4,761

 
$
5,339


Pretax amounts recognized in OCI for employee benefit plans in 2015 included the following components.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax Amounts Recognized in OCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and
Life Plans
 
Total
(Dollars in millions)
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Current year actuarial loss (gain)
$
29

 
$
1,378

 
$
(211
)
 
$
87

 
$
(86
)
 
$
138

 
$
(140
)
 
$
26

 
$
(408
)
 
$
1,629

Amortization of actuarial gain (loss)
(170
)
 
(111
)
 
(6
)
 
(3
)
 
(34
)
 
(25
)
 
46

 
89

 
(164
)
 
(50
)
Current year prior service cost (credit)
—

 
—

 
(1
)
 
1

 
—

 
—

 
—

 
—

 
(1
)
 
1

Amortization of prior service cost
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(4
)
 
(4
)
 
(5
)
 
(5
)
Amounts recognized in OCI
$
(141
)
 
$
1,267

 
$
(219
)
 
$
84

 
$
(120
)
 
$
113

 
$
(98
)
 
$
111

 
$
(578
)
 
$
1,575


The estimated pretax amounts that will be amortized from accumulated OCI into expense in 2016 are presented in the table below.
 
 
 
 
 
 
 
 
 
 
Estimated Pretax Amounts Amortized from Accumulated OCI into Period Cost in 2016
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and
Life Plans
 
Total
Net actuarial loss (gain)
$
136

 
$
6

 
$
25

 
$
(67
)
 
$
100

Prior service cost
—

 
1

 
—

 
4

 
5

Total amounts amortized from accumulated OCI
$
136

 
$
7

 
$
25

 
$
(63
)
 
$
105


Plan Assets
The Qualified Pension Plan has been established as a retirement vehicle for participants, and trusts have been established to secure benefits promised under the Qualified Pension Plan. The Corporation’s policy is to invest the trust assets in a prudent manner for the exclusive purpose of providing benefits to participants and defraying reasonable expenses of administration. The Corporation’s investment strategy is designed to provide a total return that, over the long term, increases the ratio of assets to liabilities. The strategy attempts to maximize the investment return on assets at a level of risk deemed appropriate by the Corporation while complying with ERISA and any applicable regulations and laws. The investment strategy utilizes asset allocation as a principal determinant for establishing the risk/return profile of the assets. Asset allocation ranges are established, periodically reviewed and adjusted as funding levels and liability characteristics change. Active and passive investment managers are employed to help enhance the risk/return profile of the assets. An additional aspect of the investment strategy used to minimize risk (part of the asset allocation plan) includes matching the equity exposure of participant-selected investment measures. For example, the common stock of the Corporation held in the trust is maintained as an offset to the exposure related to participants who elected to receive an investment measure based on the return performance of common stock of the Corporation. No plan assets are expected to be returned to the Corporation during 2016.
The assets of the Non-U.S. Pension Plans are primarily attributable to a U.K. pension plan. This U.K. pension plan’s assets are invested prudently so that the benefits promised to members are provided with consideration given the nature and the duration of the plan’s liabilities. The current investment strategy was set following an asset-liability study and advice from the trustee’s investment advisors. The selected asset allocation strategy is designed to achieve a higher return than the lowest risk strategy while maintaining a prudent approach to meeting the plan’s liabilities.
The expected return on plan assets assumption was developed through analysis of historical market returns, historical asset class volatility and correlations, current market conditions, anticipated future asset allocations, the funds’ past experience, and expectations on potential future market returns. The expected return on plan assets assumption is determined using the calculated market-related value for the Qualified Pension Plan and the Other Pension Plan and the fair value for the Non-U.S. Pension Plans and Postretirement Health and Life Plans. The expected return on plan assets assumption represents a long-term average view of the performance of the assets in the Qualified Pension Plan, the Non-U.S. Pension Plans, the Other Pension Plan, and Postretirement Health and Life Plans, a return that may or may not be achieved during any one calendar year. The terminated Other U.S. Pension Plan is invested solely in an annuity contract which is primarily invested in fixed-income securities structured such that asset maturities match the duration of the plan’s obligations.
The target allocations for 2016 by asset category for the Qualified Pension Plan, Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans are presented in the table below.
 
 
 
 
2016 Target Allocation
 
 
 
 
 
Percentage
Asset Category
Qualified
Pension Plan
Non-U.S.
Pension Plans
Nonqualified
and Other
Pension Plans
Equity securities
20 - 60
10 - 35
0 - 5
Debt securities
40 - 80
40 - 80
95 - 100
Real estate
0 - 10
0 - 15
0 - 5
Other
0 - 5
0 - 15
0 - 5

Equity securities for the Qualified Pension Plan include common stock of the Corporation in the amounts of $189 million (1.05 percent of total plan assets) and $215 million (1.15 percent of total plan assets) at December 31, 2015 and 2014.
Fair Value Measurements
For information on fair value measurements, including descriptions of Level 1, 2 and 3 of the fair value hierarchy and the valuation methods employed by the Corporation, see Note 1 – Summary of Significant Accounting Principles and Note 20 – Fair Value Measurements.
Combined plan investment assets measured at fair value by level and in total at December 31, 2015 and 2014 are summarized in the Fair Value Measurements table.
 
 
 
 
 
 
 
 
Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
(Dollars in millions)
Level 1
 
Level 2
 
Level 3
 
Total
Cash and short-term investments
 

 
 

 
 

 
 

Money market and interest-bearing cash
$
3,061

 
$
—

 
$
—

 
$
3,061

Cash and cash equivalent commingled/mutual funds
—

 
4

 
—

 
4

Fixed income
 

 
 

 
 

 
 

U.S. government and agency securities
2,723

 
881

 
11

 
3,615

Corporate debt securities
—

 
1,795

 
—

 
1,795

Asset-backed securities
—

 
1,939

 
—

 
1,939

Non-U.S. debt securities
632

 
662

 
—

 
1,294

Fixed income commingled/mutual funds
551

 
1,421

 
—

 
1,972

Equity
 

 
 

 
 

 
 

Common and preferred equity securities
6,735

 
—

 
—

 
6,735

Equity commingled/mutual funds
3

 
1,503

 
—

 
1,506

Public real estate investment trusts
138

 
—

 
—

 
138

Real estate
 

 
 

 
 

 
 

Private real estate
—

 
—

 
144

 
144

Real estate commingled/mutual funds
—

 
12

 
731

 
743

Limited partnerships
—

 
121

 
49

 
170

Other investments (1)
—

 
287

 
102

 
389

Total plan investment assets, at fair value
$
13,843

 
$
8,625

 
$
1,037

 
$
23,505

 
 
 
 
 
 
 
 
 
December 31, 2014
Cash and short-term investments
 

 
 

 
 

 
 

Money market and interest-bearing cash
$
3,814

 
$
—

 
$
—

 
$
3,814

Cash and cash equivalent commingled/mutual funds
—

 
4

 
—

 
4

Fixed income
 

 
 

 
 

 
 

U.S. government and agency securities
2,004

 
2,151

 
11

 
4,166

Corporate debt securities
—

 
1,454

 
—

 
1,454

Asset-backed securities
—

 
1,930

 
—

 
1,930

Non-U.S. debt securities
627

 
487

 
—

 
1,114

Fixed income commingled/mutual funds
101

 
1,397

 
—

 
1,498

Equity
 

 
 

 
 

 
 

Common and preferred equity securities
6,628

 
—

 
—

 
6,628

Equity commingled/mutual funds
16

 
1,817

 
—

 
1,833

Public real estate investment trusts
124

 
—

 
—

 
124

Real estate
 

 
 

 
 

 
 

Private real estate
—

 
—

 
127

 
127

Real estate commingled/mutual funds
—

 
4

 
632

 
636

Limited partnerships
—

 
122

 
65

 
187

Other investments (1)
1

 
490

 
127

 
618

Total plan investment assets, at fair value
$
13,315

 
$
9,856

 
$
962

 
$
24,133

(1) 
Other investments include interest rate swaps of $114 million and $297 million, participant loans of $58 million and $78 million, commodity and balanced funds of $165 million and $178 million and other various investments of $52 million and $65 million at December 31, 2015 and 2014.
The Level 3 Fair Value Measurements table presents a reconciliation of all plan investment assets measured at fair value using significant unobservable inputs (Level 3) during 2015, 2014 and 2013.
 
 
 
 
 
 
 
 
 
 
Level 3 Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
(Dollars in millions)
Balance
January 1
 
Actual Return on
Plan Assets Still
Held at the
Reporting Date
 
Purchases, Sales and Settlements
 
Transfers
out of Level 3
 
Balance
December 31
Fixed income
 

 
 

 
 

 
 

 
 

U.S. government and agency securities
$
11

 
$
—

 
$
—

 
$
—

 
$
11

Real estate
 

 
 

 
 
 
 

 
 

Private real estate
127

 
14

 
3

 
—

 
144

Real estate commingled/mutual funds
632

 
37

 
62

 
—

 
731

Limited partnerships
65

 
(1
)
 
(15
)
 
—

 
49

Other investments
127

 
(5
)
 
(20
)
 
—

 
102

Total
$
962

 
$
45

 
$
30

 
$
—

 
$
1,037

 
 
 
 
 
 
 
 
 
 
 
2014
Fixed income
 

 
 

 
 

 
 

 
 

U.S. government and agency securities
$
12

 
$
—

 
$
(1
)
 
$
—

 
$
11

Non-U.S. debt securities
6

 
—

 
(2
)
 
(4
)
 
—

Real estate
 

 
 

 
 
 
 

 
 

Private real estate
119

 
5

 
3

 
—

 
127

Real estate commingled/mutual funds
462

 
20

 
150

 
—

 
632

Limited partnerships
145

 
5

 
(85
)
 
—

 
65

Other investments
135

 
1

 
(9
)
 
—

 
127

Total
$
879

 
$
31

 
$
56

 
$
(4
)
 
$
962

 
 
 
 
 
 
 
 
 
 
 
2013
Fixed income
 
 
 
 
 
 
 
 
 
U.S. government and agency securities
$
13

 
$
—

 
$
(1
)
 
$
—

 
$
12

Non-U.S. debt securities
10

 
(2
)
 
(2
)
 
—

 
6

Real estate
 
 
 
 
 
 
 
 
 

Private real estate
110

 
4

 
5

 
—

 
119

Real estate commingled/mutual funds
324

 
15

 
123

 
—

 
462

Limited partnerships
231

 
8

 
(66
)
 
(28
)
 
145

Other investments
129

 
(6
)
 
12

 
—

 
135

Total
$
817

 
$
19

 
$
71

 
$
(28
)
 
$
879


Projected Benefit Payments
Benefit payments projected to be made from the Qualified Pension Plan, Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans are presented in the table below.
 
 
 
 
 
 
 
 
 
 
Projected Benefit Payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Postretirement Health and Life Plans
(Dollars in millions)
Qualified
Pension Plan (1)
 
Non-U.S.
Pension Plans (2)
 
Nonqualified
and Other
Pension Plans (2)
 
Net Payments (3)
 
Medicare
Subsidy
2016
$
915

 
$
56

 
$
246

 
$
121

 
$
13

2017
900

 
59

 
238

 
115

 
13

2018
902

 
62

 
240

 
111

 
13

2019
894

 
68

 
237

 
105

 
12

2020
903

 
71

 
236

 
101

 
12

2021 - 2025
4,409

 
463

 
1,110

 
450

 
52

(1) 
Benefit payments expected to be made from the plan’s assets.
(2) 
Benefit payments expected to be made from a combination of the plans’ and the Corporation’s assets.
(3) 
Benefit payments (net of retiree contributions) expected to be made from a combination of the plans’ and the Corporation’s assets.
Defined Contribution Plans
The Corporation maintains qualified defined contribution retirement plans and nonqualified defined contribution retirement plans. The Corporation recorded expense of $1.0 billion, $1.0 billion and $1.1 billion in 2015, 2014 and 2013, respectively, related to the qualified defined contribution plans. At December 31, 2015 and 2014, 236 million and 238 million shares of the Corporation’s common stock were held by these plans. Payments to the plans for dividends on common stock were $48 million, $29 million and $10 million in 2015, 2014 and 2013, respectively.
Certain non-U.S. employees are covered under defined contribution pension plans that are separately administered in accordance with local laws.