Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans (Tables)

v3.22.0.1
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Schedule of Defined Benefit Plans Disclosures 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, 2021 and 2020. The estimate of the Corporation’s PBO associated with these plans considers various actuarial assumptions, including assumptions for mortality rates and discount rates. 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 increases in the weighted-average discount rates in 2021 resulted in a decrease to the PBO of $895 million at December 31, 2021. The decreases in the weighted-average discount rates in 2020 resulted in an increase to the PBO of approximately $1.9 billion at December 31, 2020. Significant gains and losses related to changes in the PBO for 2021 and 2020 primarily resulted from changes in the discount rate.
Pension and Postretirement Plans (1)
Qualified
Pension Plan		 Non-U.S.
Pension Plans		 Nonqualified and Other
Pension Plans		 Postretirement
Health and Life Plans
(Dollars in millions) 2021 2020 2021 2020 2021 2020 2021 2020
Fair value, January 1 $ 21,776  $ 20,275  $ 3,078  $ 2,696  $ 2,789  $ 2,666  $ 143  $ 199 
Actual return on plan assets 1,215  2,468  62  379  (55) 285  —  1 
Company contributions —  —  24  23  87  86  38  6 
Plan participant contributions —  —  1  1  —  —  107  110 
Settlements and curtailments —  —  (11) (61) —  —  —  — 
Benefits paid (913) (967) (84) (57) (236) (248) (171) (174)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  1 
Foreign currency exchange rate changes  n/a n/a (39) 97   n/a n/a  n/a n/a
Fair value, December 31 $ 22,078  $ 21,776  $ 3,031  $ 3,078  $ 2,585  $ 2,789  $ 117  $ 143 
Change in projected benefit obligation                
Projected benefit obligation, January 1 $ 16,427  $ 15,361  $ 3,340  $ 2,887  $ 3,005  $ 2,919  $ 1,007  $ 989 
Service cost —  —  28  20  —  1  5  5 
Interest cost 414  500  45  49  67  90  24  32 
Plan participant contributions —  —  1  1  —  —  107  110 
Plan amendments —  —  —  3  —  —  —  — 
Settlements and curtailments —  —  (11) (61) —  —  —  — 
Actuarial loss (gain) (252) 1,533  (152) 396  (83) 243  (44) 43 
Benefits paid (913) (967) (84) (57) (236) (248) (171) (173)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  1 
Foreign currency exchange rate changes  n/a n/a (51) 102   n/a n/a —  — 
Projected benefit obligation, December 31 $ 15,676  $ 16,427  $ 3,116  $ 3,340  $ 2,753  $ 3,005  $ 928  $ 1,007 
Amounts recognized on Consolidated Balance Sheet
Other assets $ 6,402  $ 5,349  $ 550  $ 428  $ 777  $ 812  $ —  $ — 
Accrued expenses and other liabilities —  —  (635) (690) (945) (1,028) (811) (864)
Net amount recognized, December 31 $ 6,402  $ 5,349  $ (85) $ (262) $ (168) $ (216) $ (811) $ (864)
Funded status, December 31                
Accumulated benefit obligation $ 15,676  $ 16,427  $ 3,031  $ 3,253  $ 2,753  $ 3,005   n/a n/a
Overfunded (unfunded) status of ABO 6,402  5,349  —  (175) (168) (216)  n/a n/a
Provision for future salaries —  —  85  87  —  —   n/a n/a
Projected benefit obligation 15,676  16,427  3,116  3,340  2,753  3,005  $ 928  $ 1,007 
Weighted-average assumptions, December 31                
Discount rate 2.86  % 2.57 % 1.85  % 1.37 % 2.80  % 2.33 % 2.85  % 2.48 %
Rate of compensation increase n/a n/a 4.46  4.11  4.00  4.00  n/a n/a
Interest-crediting rate 4.83  % 5.02  % 1.90  1.58  4.22  4.49   n/a n/a
(1)The measurement date for all of the above plans was December 31 of each year reported.
n/a = not applicable
Schedule of Amounts Recognized in Balance Sheet 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, 2021 and 2020. The estimate of the Corporation’s PBO associated with these plans considers various actuarial assumptions, including assumptions for mortality rates and discount rates. 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 increases in the weighted-average discount rates in 2021 resulted in a decrease to the PBO of $895 million at December 31, 2021. The decreases in the weighted-average discount rates in 2020 resulted in an increase to the PBO of approximately $1.9 billion at December 31, 2020. Significant gains and losses related to changes in the PBO for 2021 and 2020 primarily resulted from changes in the discount rate.
Pension and Postretirement Plans (1)
Qualified
Pension Plan		 Non-U.S.
Pension Plans		 Nonqualified and Other
Pension Plans		 Postretirement
Health and Life Plans
(Dollars in millions) 2021 2020 2021 2020 2021 2020 2021 2020
Fair value, January 1 $ 21,776  $ 20,275  $ 3,078  $ 2,696  $ 2,789  $ 2,666  $ 143  $ 199 
Actual return on plan assets 1,215  2,468  62  379  (55) 285  —  1 
Company contributions —  —  24  23  87  86  38  6 
Plan participant contributions —  —  1  1  —  —  107  110 
Settlements and curtailments —  —  (11) (61) —  —  —  — 
Benefits paid (913) (967) (84) (57) (236) (248) (171) (174)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  1 
Foreign currency exchange rate changes  n/a n/a (39) 97   n/a n/a  n/a n/a
Fair value, December 31 $ 22,078  $ 21,776  $ 3,031  $ 3,078  $ 2,585  $ 2,789  $ 117  $ 143 
Change in projected benefit obligation                
Projected benefit obligation, January 1 $ 16,427  $ 15,361  $ 3,340  $ 2,887  $ 3,005  $ 2,919  $ 1,007  $ 989 
Service cost —  —  28  20  —  1  5  5 
Interest cost 414  500  45  49  67  90  24  32 
Plan participant contributions —  —  1  1  —  —  107  110 
Plan amendments —  —  —  3  —  —  —  — 
Settlements and curtailments —  —  (11) (61) —  —  —  — 
Actuarial loss (gain) (252) 1,533  (152) 396  (83) 243  (44) 43 
Benefits paid (913) (967) (84) (57) (236) (248) (171) (173)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  1 
Foreign currency exchange rate changes  n/a n/a (51) 102   n/a n/a —  — 
Projected benefit obligation, December 31 $ 15,676  $ 16,427  $ 3,116  $ 3,340  $ 2,753  $ 3,005  $ 928  $ 1,007 
Amounts recognized on Consolidated Balance Sheet
Other assets $ 6,402  $ 5,349  $ 550  $ 428  $ 777  $ 812  $ —  $ — 
Accrued expenses and other liabilities —  —  (635) (690) (945) (1,028) (811) (864)
Net amount recognized, December 31 $ 6,402  $ 5,349  $ (85) $ (262) $ (168) $ (216) $ (811) $ (864)
Funded status, December 31                
Accumulated benefit obligation $ 15,676  $ 16,427  $ 3,031  $ 3,253  $ 2,753  $ 3,005   n/a n/a
Overfunded (unfunded) status of ABO 6,402  5,349  —  (175) (168) (216)  n/a n/a
Provision for future salaries —  —  85  87  —  —   n/a n/a
Projected benefit obligation 15,676  16,427  3,116  3,340  2,753  3,005  $ 928  $ 1,007 
Weighted-average assumptions, December 31                
Discount rate 2.86  % 2.57 % 1.85  % 1.37 % 2.80  % 2.33 % 2.85  % 2.48 %
Rate of compensation increase n/a n/a 4.46  4.11  4.00  4.00  n/a n/a
Interest-crediting rate 4.83  % 5.02  % 1.90  1.58  4.22  4.49   n/a n/a
(1)The measurement date for all of the above plans was December 31 of each year reported.
n/a = not applicable
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, 2021 and 2020 are presented in the table below. For these plans, funding strategies vary due to legal requirements and local practices.
Plans with ABO and PBO in Excess of Plan Assets
Non-U.S.
Pension Plans		 Nonqualified
and Other
Pension Plans
(Dollars in millions) 2021 2020 2021 2020
PBO $ 841  $ 900  $ 945  $ 1,028 
ABO 780  841  945  1,028 
Fair value of plan assets 207  211  1  1 
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, 2021 and 2020 are presented in the table below. For these plans, funding strategies vary due to legal requirements and local practices.
Plans with ABO and PBO in Excess of Plan Assets
Non-U.S.
Pension Plans		 Nonqualified
and Other
Pension Plans
(Dollars in millions) 2021 2020 2021 2020
PBO $ 841  $ 900  $ 945  $ 1,028 
ABO 780  841  945  1,028 
Fair value of plan assets 207  211  1  1 
Schedule of Net Benefit Costs
Components of Net Periodic Benefit Cost
  Qualified Pension Plan Non-U.S. Pension Plans
(Dollars in millions) 2021 2020 2019 2021 2020 2019
Components of net periodic benefit cost (income)
Service cost $ —  $ —  $ —  $ 28  $ 20  $ 17 
Interest cost 414  500  593  45  49  65 
Expected return on plan assets (1,173) (1,154) (1,088) (70) (66) (99)
Amortization of net actuarial loss 193  173  135  19  9  6 
Other —  —  —  5  8  4 
Net periodic benefit cost (income) $ (566) $ (481) $ (360) $ 27  $ 20  $ (7)
Weighted-average assumptions used to determine net cost for years ended December 31
            
Discount rate 2.57  % 3.32 % 4.32  % 1.35  % 1.81 % 2.60  %
Expected return on plan assets 5.75  6.00  6.00  2.30  2.57  4.13 
Rate of compensation increase  n/a n/a n/a 4.11  4.10  4.49 
Nonqualified and
Other Pension Plans		 Postretirement Health
and Life Plans
(Dollars in millions) 2021 2020 2019 2021 2020 2019
Components of net periodic benefit cost (income)
Service cost $ —  $ 1  $ 1  $ 5  $ 5  $ 5 
Interest cost 67  90  113  24  32  38 
Expected return on plan assets (49) (71) (95) (3) (4) (5)
Amortization of net actuarial loss (gain) 63  50  34  20  29  (24)
Other —  —  —  —  (2) (2)
Net periodic benefit cost (income) $ 81  $ 70  $ 53  $ 46  $ 60  $ 12 
Weighted-average assumptions used to determine net cost for years ended December 31
            
Discount rate 2.33  % 3.20 % 4.26  % 2.48  % 3.27 % 4.25  %
Expected return on plan assets 1.88  2.77  3.73  2.00  2.00  2.00 
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 and OCI
  Qualified
Pension Plan		 Non-U.S.
Pension Plans		 Nonqualified
and Other
Pension Plans		 Postretirement
Health and
Life Plans		 Total
(Dollars in millions) 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Net actuarial loss (gain) $ 3,425  $ 3,912  $ 456  $ 628  $ 945  $ 987  $ 4  $ 66  $ 4,830  $ 5,593 
Prior service cost (credits) —  —  17  18  —  —  (3) (4) 14  14 
Amounts recognized in accumulated OCI $ 3,425  $ 3,912  $ 473  $ 646  $ 945  $ 987  $ 1  $ 62  $ 4,844  $ 5,607 
Current year actuarial loss (gain) $ (294) $ 219  $ (154) $ 79  $ 21  $ 29  $ (41) $ 47  $ (468) $ 374 
Amortization of actuarial gain (loss) and
prior service cost
 (193) (173) (19) (12) (63) (50) (20) (27) (295) (262)
Current year prior service cost (credit) —  —  —  3  —  —  —  —  —  3 
Amounts recognized in OCI $ (487) $ 46  $ (173) $ 70  $ (42) $ (21) $ (61) $ 20  $ (763) $ 115 
Schedule of Pretax Amounts Recognized in OCI
Pretax Amounts included in Accumulated OCI and OCI
  Qualified
Pension Plan		 Non-U.S.
Pension Plans		 Nonqualified
and Other
Pension Plans		 Postretirement
Health and
Life Plans		 Total
(Dollars in millions) 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Net actuarial loss (gain) $ 3,425  $ 3,912  $ 456  $ 628  $ 945  $ 987  $ 4  $ 66  $ 4,830  $ 5,593 
Prior service cost (credits) —  —  17  18  —  —  (3) (4) 14  14 
Amounts recognized in accumulated OCI $ 3,425  $ 3,912  $ 473  $ 646  $ 945  $ 987  $ 1  $ 62  $ 4,844  $ 5,607 
Current year actuarial loss (gain) $ (294) $ 219  $ (154) $ 79  $ 21  $ 29  $ (41) $ 47  $ (468) $ 374 
Amortization of actuarial gain (loss) and
prior service cost
 (193) (173) (19) (12) (63) (50) (20) (27) (295) (262)
Current year prior service cost (credit) —  —  —  3  —  —  —  —  —  3 
Amounts recognized in OCI $ (487) $ 46  $ (173) $ 70  $ (42) $ (21) $ (61) $ 20  $ (763) $ 115 
Schedule of Allocation of Plan Assets The target allocations for 2022 by asset category for the Qualified Pension Plan, Non-U.S. Pension Plans, and Nonqualified and Other Pension Plans are presented in the table below. Equity securities for the Qualified Pension Plan include common stock of the Corporation in the amounts of $398 million (1.80 percent of total plan assets) and $274 million (1.26 percent of total plan assets) at December 31, 2021 and 2020.
2022 Target Allocation
Percentage
Asset Category Qualified
Pension Plan		 Non-U.S.
Pension Plans		 Nonqualified
and Other
Pension Plans
Equity securities
15 - 50%
0 - 25%
0 - 5%
Debt securities
45 - 80%
40 - 70%
95 - 100%
Real estate
0 - 10%
0 - 15%
0 - 5%
Other
0 - 5%
10 - 40%
0 - 5%
Schedule of Changes in Fair Value of Plan Assets Combined plan investment assets measured at fair value by level and in total at December 31, 2021 and 2020 are summarized in the Fair Value Measurements table.
Fair Value Measurements
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(Dollars in millions) December 31, 2021 December 31, 2020
Money market and interest-bearing cash $ 1,339  $ —  $ —  $ 1,339  $ 1,380  $ —  $ —  $ 1,380 
U.S. government and government agency obligations 4,948  934  6  5,888  4,590  1,238  7  5,835 
Corporate debt —  4,900  —  4,900  —  5,021  —  5,021 
Non-U.S. debt securities 925  1,165  —  2,090  1,021  1,122  —  2,143 
Asset-backed securities —  1,485  —  1,485  —  1,967  —  1,967 
Mutual and exchange traded funds 1,395  —  —  1,395  1,362  —  —  1,362 
Collective investment funds —  3,419  —  3,419  —  3,199  —  3,199 
Common and preferred stocks 4,826  —  —  4,826  4,438  —  —  4,438 
Real estate investment trusts 87  —  —  87  73  —  —  73 
Participant loans —  —  7  7  —  —  7  7 
Other investments (1)
1  29  630  660  1  29  684  714 
Total plan investment assets, at fair value (2)
$ 13,521  $ 11,932  $ 643  $ 26,096  $ 12,865  $ 12,576  $ 698  $ 26,139 
(1)Other investments includes insurance annuity contracts of $612 million and $664 million and other various investments of $48 million and $50 million at December 31, 2021 and 2020.
(2)At December 31, 2021 and 2020, excludes $1.7 billion and $1.6 billion of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient and are not required to be classified in the fair value hierarchy. Prior period has been revised to conform to current-period presentation.
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 2021, 2020 and 2019.
Level 3 Fair Value Measurements
  Balance
January 1		 Actual Return on
Plan Assets Still
Held at the
Reporting Date		 Purchases, Sales and Settlements Balance
December 31
(Dollars in millions) 2021
U.S. government and government agency obligations $ 7  $ —  $ (1) $ 6 
Participant Loans 7  —  —  7 
Other investments 684  (5) (49) 630 
Total $ 698  $ (5) $ (50) $ 643 
  2020
U.S. government and government agency obligations $ 8  $ —  $ (1) $ 7 
Participant Loans 8  —  (1) 7 
Other investments 628  6  50  684 
Total $ 644  $ 6  $ 48  $ 698 
2019
U.S. government and government agency obligations $ 9  $ —  $ (1) $ 8 
Private real estate 5  —  (5) — 
Participant loans 12  —  (4) 8 
Other investments 576  6  46  628 
Total $ 602  $ 6  $ 36  $ 644 
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
(Dollars in millions)
Qualified
Pension Plan (1)
Non-U.S.
Pension Plans (2)
Nonqualified
and Other
Pension Plans (2)
Postretirement Health and Life Plans (3)
2022 $ 948  $ 134  $ 239  $ 78 
2023 938  142  244  74 
2024 949  135  225  71 
2025 936  142  223  67 
2026 941  140  218  64 
2027 - 2031 4,395  668  940  275 
(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.