Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans (Tables)

v3.22.4
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2022
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, 2022 and 2021. 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 2022 resulted in a decrease to the PBO of $5.3 billion at December 31, 2022. The increases in the weighted-average discount rates in 2021 resulted in a decrease to the PBO of approximately $895 million at December 31, 2021. Significant gains and losses related to changes in the PBO for 2022 and 2021 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) 2022 2021 2022 2021 2022 2021 2022 2021
Fair value, January 1 $ 22,078  $ 21,776  $ 3,031  $ 3,078  $ 2,585  $ 2,789  $ 117  $ 143 
Actual return on plan assets (3,896) 1,215  (898) 62  (332) (55) 2  — 
Company contributions (withdrawals) —  —  30  24  (135) 87  45  38 
Plan participant contributions —  —  1  1  —  —  104  107 
Settlements and curtailments —  —  (51) (11) (6) —  —  — 
Benefits paid (924) (913) (62) (84) (226) (236) (161) (171)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  — 
Foreign currency exchange rate changes  n/a n/a (323) (39)  n/a n/a  n/a n/a
Fair value, December 31 $ 17,258  $ 22,078  $ 1,728  $ 3,031  $ 1,886  $ 2,585  $ 107  $ 117 
Change in projected benefit obligation                
Projected benefit obligation, January 1 $ 15,676  $ 16,427  $ 3,116  $ 3,340  $ 2,753  $ 3,005  $ 928  $ 1,007 
Service cost —  —  29  28  —  —  4  5 
Interest cost 438  414  53  45  74  67  25  24 
Plan participant contributions —  —  1  1  —  —  104  107 
Plan amendments —  —  3  —  —  —  —  — 
Settlements and curtailments —  —  (51) (11) (6) —  —  — 
Actuarial loss (gain) (3,610) (252) (1,054) (152) (486) (83) (198) (44)
Benefits paid (924) (913) (62) (84) (226) (236) (161) (171)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  — 
Foreign currency exchange rate changes  n/a n/a (283) (51)  n/a n/a (2) — 
Projected benefit obligation, December 31 $ 11,580  $ 15,676  $ 1,752  $ 3,116  $ 2,109  $ 2,753  $ 700  $ 928 
Amounts recognized on Consolidated Balance Sheet
Other assets $ 5,678  $ 6,402  $ 370  $ 550  $ 495  $ 777  $ —  $ — 
Accrued expenses and other liabilities —  —  (394) (635) (718) (945) (593) (811)
Net amount recognized, December 31 $ 5,678  $ 6,402  $ (24) $ (85) $ (223) $ (168) $ (593) $ (811)
Funded status, December 31                
Accumulated benefit obligation $ 11,580  $ 15,676  $ 1,694  $ 3,031  $ 2,109  $ 2,753   n/a n/a
Overfunded (unfunded) status of ABO 5,678  6,402  34  —  (223) (168)  n/a n/a
Provision for future salaries —  —  58  85  —  —   n/a n/a
Projected benefit obligation 11,580  15,676  1,752  3,116  2,109  2,753  $ 700  $ 928 
Weighted-average assumptions, December 31                
Discount rate 5.54  % 2.86  % 4.59  % 1.85  % 5.58  % 2.80  % 5.56  % 2.85  %
Rate of compensation increase n/a n/a 4.25  4.46  4.00  4.00  n/a n/a
Interest-crediting rate 5.36  % 4.83  % 2.03  1.90  4.69  4.22   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, 2022 and 2021. 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 2022 resulted in a decrease to the PBO of $5.3 billion at December 31, 2022. The increases in the weighted-average discount rates in 2021 resulted in a decrease to the PBO of approximately $895 million at December 31, 2021. Significant gains and losses related to changes in the PBO for 2022 and 2021 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) 2022 2021 2022 2021 2022 2021 2022 2021
Fair value, January 1 $ 22,078  $ 21,776  $ 3,031  $ 3,078  $ 2,585  $ 2,789  $ 117  $ 143 
Actual return on plan assets (3,896) 1,215  (898) 62  (332) (55) 2  — 
Company contributions (withdrawals) —  —  30  24  (135) 87  45  38 
Plan participant contributions —  —  1  1  —  —  104  107 
Settlements and curtailments —  —  (51) (11) (6) —  —  — 
Benefits paid (924) (913) (62) (84) (226) (236) (161) (171)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  — 
Foreign currency exchange rate changes  n/a n/a (323) (39)  n/a n/a  n/a n/a
Fair value, December 31 $ 17,258  $ 22,078  $ 1,728  $ 3,031  $ 1,886  $ 2,585  $ 107  $ 117 
Change in projected benefit obligation                
Projected benefit obligation, January 1 $ 15,676  $ 16,427  $ 3,116  $ 3,340  $ 2,753  $ 3,005  $ 928  $ 1,007 
Service cost —  —  29  28  —  —  4  5 
Interest cost 438  414  53  45  74  67  25  24 
Plan participant contributions —  —  1  1  —  —  104  107 
Plan amendments —  —  3  —  —  —  —  — 
Settlements and curtailments —  —  (51) (11) (6) —  —  — 
Actuarial loss (gain) (3,610) (252) (1,054) (152) (486) (83) (198) (44)
Benefits paid (924) (913) (62) (84) (226) (236) (161) (171)
Federal subsidy on benefits paid  n/a n/a  n/a n/a  n/a n/a —  — 
Foreign currency exchange rate changes  n/a n/a (283) (51)  n/a n/a (2) — 
Projected benefit obligation, December 31 $ 11,580  $ 15,676  $ 1,752  $ 3,116  $ 2,109  $ 2,753  $ 700  $ 928 
Amounts recognized on Consolidated Balance Sheet
Other assets $ 5,678  $ 6,402  $ 370  $ 550  $ 495  $ 777  $ —  $ — 
Accrued expenses and other liabilities —  —  (394) (635) (718) (945) (593) (811)
Net amount recognized, December 31 $ 5,678  $ 6,402  $ (24) $ (85) $ (223) $ (168) $ (593) $ (811)
Funded status, December 31                
Accumulated benefit obligation $ 11,580  $ 15,676  $ 1,694  $ 3,031  $ 2,109  $ 2,753   n/a n/a
Overfunded (unfunded) status of ABO 5,678  6,402  34  —  (223) (168)  n/a n/a
Provision for future salaries —  —  58  85  —  —   n/a n/a
Projected benefit obligation 11,580  15,676  1,752  3,116  2,109  2,753  $ 700  $ 928 
Weighted-average assumptions, December 31                
Discount rate 5.54  % 2.86  % 4.59  % 1.85  % 5.58  % 2.80  % 5.56  % 2.85  %
Rate of compensation increase n/a n/a 4.25  4.46  4.00  4.00  n/a n/a
Interest-crediting rate 5.36  % 4.83  % 2.03  1.90  4.69  4.22   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, 2022 and 2021 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) 2022 2021 2022 2021
PBO $ 458  $ 841  $ 719  $ 945 
ABO 416  780  719  945 
Fair value of plan assets 71  207  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, 2022 and 2021 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) 2022 2021 2022 2021
PBO $ 458  $ 841  $ 719  $ 945 
ABO 416  780  719  945 
Fair value of plan assets 71  207  1  1 
Schedule of Net Benefit Costs
Components of Net Periodic Benefit Cost
  Qualified Pension Plan Non-U.S. Pension Plans
(Dollars in millions) 2022 2021 2020 2022 2021 2020
Components of net periodic benefit cost (income)
Service cost $ —  $ —  $ —  $ 29  $ 28  $ 20 
Interest cost 438  414  500  53  45  49 
Expected return on plan assets (1,204) (1,173) (1,154) (59) (70) (66)
Amortization of actuarial loss (gain) and prior service cost 140  193  173  14  19  9 
Other —  —  —  10  5  8 
Net periodic benefit cost (income) $ (626) $ (566) $ (481) $ 47  $ 27  $ 20 
Weighted-average assumptions used to determine net cost for years ended December 31
            
Discount rate 2.86  % 2.57  % 3.32  % 1.85  % 1.35  % 1.81  %
Expected return on plan assets 5.75  5.75  6.00  2.17  2.30  2.57 
Rate of compensation increase  n/a n/a n/a 4.46  4.11  4.10 
Nonqualified and
Other Pension Plans		 Postretirement Health
and Life Plans
(Dollars in millions) 2022 2021 2020 2022 2021 2020
Components of net periodic benefit cost (income)
Service cost $ —  $ —  $ 1  $ 4  $ 5  $ 5 
Interest cost 74  67  90  25  24  32 
Expected return on plan assets (59) (49) (71) (2) (3) (4)
Amortization of actuarial loss (gain) and prior service cost 54  63  50  (9) 20  29 
Other 1  —  —  —  —  (2)
Net periodic benefit cost (income) $ 70  $ 81  $ 70  $ 18  $ 46  $ 60 
Weighted-average assumptions used to determine net cost for years ended December 31
            
Discount rate 2.80  % 2.33  % 3.20  % 2.85  % 2.48  % 3.27  %
Expected return on plan assets 2.38  1.88  2.77  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) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Net actuarial loss (gain) $ 4,775  $ 3,425  $ 312  $ 456  $ 796  $ 945  $ (187) $ 4  $ 5,696  $ 4,830 
Prior service cost (credits) —  —  43  17  —  —  (1) (3) 42  14 
Amounts recognized in accumulated OCI $ 4,775  $ 3,425  $ 355  $ 473  $ 796  $ 945  $ (188) $ 1  $ 5,738  $ 4,844 
Current year actuarial loss (gain) $ 1,490  $ (294) $ (107) $ (154) $ (95) $ 21  $ (198) $ (41) $ 1,090  $ (468)
Amortization of actuarial gain (loss) and
prior service cost
 (140) (193) (14) (19) (54) (63) 9  (20) (199) (295)
Current year prior service cost (credit) —  —  3  —  —  —  —  —  3  — 
Amounts recognized in OCI $ 1,350  $ (487) $ (118) $ (173) $ (149) $ (42) $ (189) $ (61) $ 894  $ (763)
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) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Net actuarial loss (gain) $ 4,775  $ 3,425  $ 312  $ 456  $ 796  $ 945  $ (187) $ 4  $ 5,696  $ 4,830 
Prior service cost (credits) —  —  43  17  —  —  (1) (3) 42  14 
Amounts recognized in accumulated OCI $ 4,775  $ 3,425  $ 355  $ 473  $ 796  $ 945  $ (188) $ 1  $ 5,738  $ 4,844 
Current year actuarial loss (gain) $ 1,490  $ (294) $ (107) $ (154) $ (95) $ 21  $ (198) $ (41) $ 1,090  $ (468)
Amortization of actuarial gain (loss) and
prior service cost
 (140) (193) (14) (19) (54) (63) 9  (20) (199) (295)
Current year prior service cost (credit) —  —  3  —  —  —  —  —  3  — 
Amounts recognized in OCI $ 1,350  $ (487) $ (118) $ (173) $ (149) $ (42) $ (189) $ (61) $ 894  $ (763)
Schedule of Allocation of Plan Assets The target allocations for 2023 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 $296 million (1.72 percent of total plan assets) and $398 million (1.80 percent of total plan assets) at December 31, 2022 and 2021.
2023 Target Allocation
Percentage
Asset Category Qualified
Pension Plan		 Non-U.S.
Pension Plans		 Nonqualified
and Other
Pension Plans
Equity securities
15 - 50%
0 - 20%
0 - 5%
Debt securities
45 - 80%
40 - 75%
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, 2022 and 2021 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, 2022 December 31, 2021
Money market and interest-bearing cash $ 1,329  $ —  $ —  $ 1,329  $ 1,339  $ —  $ —  $ 1,339 
U.S. government and government agency obligations 3,313  704  5  4,022  4,948  934  6  5,888 
Corporate debt —  3,587  —  3,587  —  4,900  —  4,900 
Non-U.S. debt securities 327  933  —  1,260  925  1,165  —  2,090 
Asset-backed securities —  1,273  —  1,273  —  1,485  —  1,485 
Mutual and exchange-traded funds 1,247  —  —  1,247  1,395  —  —  1,395 
Collective investment funds —  1,988  —  1,988  —  3,419  —  3,419 
Common and preferred stocks 3,901  —  —  3,901  4,826  —  —  4,826 
Real estate investment trusts 76  —  —  76  87  —  —  87 
Participant loans —  —  6  6  —  —  7  7 
Other investments (1)
1  23  410  434  1  29  630  660 
Total plan investment assets, at fair value (2)
$ 10,194  $ 8,508  $ 421  $ 19,123  $ 13,521  $ 11,932  $ 643  $ 26,096 
(1)Other investments includes insurance annuity contracts of $390 million and $612 million and other various investments of $44 million and $48 million at December 31, 2022 and 2021.
(2)At December 31, 2022 and 2021, excludes $1.9 billion and $1.7 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.
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 2022, 2021 and 2020.
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) 2022
U.S. government and government agency obligations $ 6  $ —  $ (1) $ 5 
Participant Loans 7  —  (1) 6 
Other investments 630  (8) (212) 410 
Total $ 643  $ (8) $ (214) $ 421 
  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 
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)
2023 $ 892  $ 114  $ 235  $ 73 
2024 927  108  232  70 
2025 918  116  223  67 
2026 921  117  215  64 
2027 908  114  209  61 
2028 - 2032 4,289  580  884  263 
(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.