Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans (Tables)

v3.3.1.900
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Schedule of Defined Benefit Plans Disclosures
 
 
 
 
 
 
 
 
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
Schedule of Amounts Recognized in Balance Sheet
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
)
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets
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

Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets
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

Schedule of Net Benefit Costs
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
Schedule of Pretax Amounts Included in Accumulated OCI
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

Schedule of Pretax Amounts Recognized in OCI
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

Schedule of Estimated Pretax Amounts Amortized from Accumulated OCI into Period Cost
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


Schedule of Allocation of Plan Assets
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
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.
Schedule of Changes in Fair Value of Plan Assets
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

Schedule of Expected 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.