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PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2018
Funded Status of Our Plans
The funded status of the plans we sponsor is determined by comparing the projected benefit obligation with the fair value of plan assets at the end of the year. The following table demonstrates how our plans' funded status is reflected on the Consolidated Balance Sheet.
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2018

2017

2018

2017

Funded status:
 
 
 
 
Fair value of plan assets
$
4,930

$
5,514

$
18

$
—

Projected benefit obligations
(5,263
)
(6,795
)
(166
)
(200
)
Funded status
$
(333
)
$
(1,281
)
$
(148
)
$
(200
)
Presentation on our Consolidated Balance Sheet:
 
 
 
 
Noncurrent assets
$
74

$
45

$
—

$
—

Current liabilities
(18
)
(21
)
(10
)
(19
)
Noncurrent liabilities
(389
)
(1,305
)
(138
)
(181
)
Funded status
$
(333
)
$
(1,281
)
$
(148
)
$
(200
)
Changes in Fair Value of Plan Assets
Changes in Fair Value of Plan Assets
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2018

2017

2018

2017

Fair value of plan assets at beginning of year (estimated)
$
5,514

$
5,351

$
—

$
—

Adjustment for final fair value of plan assets
44

18

—

—

Actual return on plan assets
123

553

—

—

Foreign currency translation
(73
)
59

—

—

Employer contributions and benefit payments
345

57

36

20

Plan participants’ contributions
—

—

4

6

Plan transfers
1

3

—

—

Benefits paid (includes lump sum settlements)
(1,024
)
(527
)
(22
)
(26
)
Fair value of plan assets at end of year (estimated)
$
4,930

$
5,514

$
18

$
—
Changes in Projected Benefit Obligations of Our Pension and Other Postretirement Benefit Plans
Changes in Projected Benefit Obligations of Our Pension and Other Postretirement Benefit Plans
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2018

2017

2018

2017

Reconciliation of projected benefit obligation:
 
 
 
 
Projected benefit obligation beginning of year
$
6,795

$
6,469

$
200

$
225

Service cost
37

35

—

—

Interest cost
236

264

7

8

Plan participants’ contributions
—

—

4

6

Actuarial (gains) losses
(718
)
489

(18
)
(18
)
Foreign currency translation
(69
)
59

(5
)
5

Benefits paid (includes lump sum settlements)
(1,024
)
(527
)
(22
)
(26
)
Plan amendments and other
5

3

—

—

Plan transfers
1

3

—

—

Projected benefit obligation at end of year
$
5,263

$
6,795

$
166

$
200
Schedules of Allocation of Our Plans' Assets
The net pension plan assets, when categorized in accordance with this fair value hierarchy, are as follows. Investments valued using net asset value (NAV) as a practical expedient are presented to reconcile with total plan assets.
DOLLAR AMOUNTS IN MILLIONS
2018
LEVEL 1

LEVEL 2

LEVEL 3

NAV

TOTAL

Pension trust investments:
 
 
 
 
 

Cash and short-term investments
$
275

$
12

$
—

$
—

$
287

Common and preferred stock
—

—

—

—

—

Fixed income investments:
 
 
 
 
 
      Corporate
—

1,054

—

—

1,054

      Government
—

426

—

—

426

Hedge fund and related investments
—

—

3

1,811

1,814

Private equity and related investments
—

—

65

1,014

1,079

Derivative instruments
—

15

262

—

277

Total pension trust investments
275

1,507

330

2,825

4,937

Accrued liabilities, net
 
 
 
 
(17
)
Pension trust net assets
 
 
 
 
4,920

Canadian nonregistered plan assets:
 
 
 
 
 
Cash and short-term investments
5

—

—

—

5

Common and preferred stock
5

—

—

—

5

Total Canadian nonregistered plan assets
10

—

—

—

10

Total plan assets
 
 
 
 
$
4,930

DOLLAR AMOUNTS IN MILLIONS
2017
LEVEL 1

LEVEL 2

LEVEL 3

NAV

TOTAL

Pension trust investments:
 
 
 
 
 

Cash and short-term investments
$
580

$
2

$
—

$
—

$
582

Common and preferred stock
1

—

—

—

1

Hedge fund and related investments
59

—

10

3,168

3,237

Private equity and related investments
—

—

102

1,120

1,222

Derivative instruments
—

31

445

—

476

Total pension trust investments
640

33

557

4,288

5,518

Accrued liabilities, net
 
 
 
 
(16
)
Pension trust net investments
 
 
 
 
5,502

Canadian nonregistered plan assets:
 
 
 
 
 
Cash and short-term investments
6

—

—

—

6

Common and preferred stock
6

—

—

—

6

Total Canadian nonregistered plan assets
12

—

—

—

12

Total plan assets
 
 
 
 
$
5,514
Reconciliation of Pension Plan Assets Measured at Level 3 Fair Value
A reconciliation of the beginning and ending balances of the pension plan assets measured at fair value using significant unobservable inputs (Level 3) is presented below:
DOLLAR AMOUNTS IN MILLIONS
  
INVESTMENTS
 
  
Hedge funds and related investments

Private equity and related investments

Derivative instruments, net

Total

Balance as of December 31, 2016
$
4

$
75

$
376

$
455

Net realized gains (losses)
(1
)
(30
)
15

(16
)
Net change in unrealized gains (losses)
2

41

67

110

Purchases
—

14

—

14

Sales
(1
)
—

—

(1
)
Settlements
—

—

(13
)
(13
)
Transfers into Level 3
6

19

—

25

Transfers out of Level 3
—

(17
)
—

(17
)
Balance as of December 31, 2017
10

102

445

557

Net realized gains (losses)
—

—

238

238

Net change in unrealized gains (losses)
1

(5
)
(184
)
(188
)
Purchases
—

5

—

5

Sales
—

(2
)
—

(2
)
Settlements
—

—

(237
)
(237
)
Transfers into Level 3
—

18

—

18

Transfers out of Level 3
(8
)
(53
)
—

(61
)
Balance as of December 31, 2018
$
3

$
65

$
262

$
330
Assumptions We Use in Estimating Health Care Benefit Costs
Assumptions We Use in Estimating Health Care Benefit Cost Trends
  
2018
2017
  
U.S.

CANADA

U.S.

CANADA

Weighted health care cost trend rate assumed for next year
7.80% for Pre-Medicare and 4.50% for HRA

4.90
%
8.40% for Pre-Medicare and 4.50% for HRA

5.10
%
Rate that the cost trend rate gradually declines to
4.50
%
4.00
%
4.50
%
4.30
%
Year the cost trend rate is reached
2037

2039

2037

2028
Effect of a One Percent Change in Health Care Costs
Effect of a One Percent Change in Health Care Costs
AS OF DECEMBER 31, 2018 (DOLLAR AMOUNTS IN MILLIONS)
  
1% INCREASE

1% DECREASE

Effect on total service and interest cost components
Less than $1

Less than $(1)

Effect on accumulated postretirement benefit obligation
$
5

$
(4
)
Net Periodic Benefit Cost (Credit)
Net Periodic Benefit Cost (Credit)
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER POSTRETIREMENT
BENEFITS
  
2018

2017

2016

2018

2017

2016

Net periodic benefit cost (credit):
 
 
 
 
 
 
Service cost(1)
$
37

$
35

$
48

$
—

$
—

$
—

Interest cost
236

264

277

7

8

8

Expected return on plan assets
(399
)
(409
)
(495
)
—

—

—

Amortization of actuarial loss
225

195

156

8

8

9

Amortization of prior service cost (credit)
3

4

4

(8
)
(8
)
(7
)
Accelerated pension costs for Plum Creek merger-related change-in-control provisions
—

—

5

—

—

—

Settlement charge
200

—

—

—

—

—

Net periodic benefit cost (credit)
$
302

$
89

$
(5
)
$
7

$
8

$
10

(1) Service cost includes $13 million in 2016 for employees that were part of our Cellulose Fibers divestitures. These charges are included in our results of discontinued operations. Curtailment and special termination benefits are related to involuntary terminations due to restructuring activities.
Estimated Amortization from Cumulative Other Comprehensive Loss
Estimated Amortization from Accumulated Other Comprehensive Loss in 2019
DOLLAR AMOUNTS IN MILLIONS
  
PENSION

OTHER POSTRETIREMENT BENEFITS

TOTAL

Net actuarial loss
$
108

$
7

$
115

Prior service cost (credit)
4

(1
)
3

Net effect cost
$
112

$
6

$
118
Estimated Projected Benefit Payments for the Next 10 Years
Estimated Projected Benefit Payments for the Next 10 Years
DOLLAR AMOUNTS IN MILLIONS
 
 
  
PENSION (1)

OTHER
POSTRETIREMENT
BENEFITS

2019
$
272

$
17

2020
233

16

2021
231

15

2022
232

14

2023
234

14

2024-2028
1,161

57

(1) Estimated payments exclude future payments transferred in conjunction with our January 2019 group annuity contract purchase.
Qualified and Registered Plans [Member]  
Schedules of Allocation of Our Plans' Assets
Assets within our qualified and registered pension plans in our U.S. and Canadian pension trusts were invested as follows:
 
DECEMBER 31, 2018

DECEMBER 31, 2017

Cash and short-term investments
5.8
 %
10.6
 %
Fixed income investments:
 
 
Corporate
21.5

—

Government
8.6

—

Hedge funds and related investments
36.9

58.8

Private equity and related investments
21.9

22.2

Derivative instruments, net
5.6

8.7

Accrued liabilities
(0.3
)
(0.3
)
Total
100.0
 %
100.0
 %
Pension  
Rates We Use in Estimating Our Benefit Obligations
Rates We Use in Estimating Our Benefit Obligations
  
PENSION
  
DECEMBER 31,
2018

DECEMBER 31,
2017

Discount rates:
 

 

United States
4.40
%
3.70
%
Canada
3.70
%
3.50
%
Lump sum distributions(1)(2)
PPA Table

PPA Table

Rate of compensation increase:
 

 

Salaried:
 

 

United States
13.00% to 2.00% decreasing with participant age

13.00% to 2.00% decreasing with participant age

Canada
3.25
%
3.25
%
Hourly:
 

 

United States
13.00% to 2.30% decreasing with participant age

13.00% to 2.30% decreasing with participant age

Canada
3.00
%
3.00
%
Lump sum or installment distributions election(2)
60.00
%
60.00
%
(1) PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013.
(2) U.S. qualified salaried and nonqualified plans only.
Estimating Our Net Periodic Benefit Costs
Estimating Our Net Periodic Benefit Costs
  
PENSION
  
2018

2017

2016

Discount rates:
 

 

 

United States
3.70
%
4.30
%
4.50
%
Canada
3.50
%
3.70
%
4.00
%
Lump sum distributions(1)(2)
PPA Table

PPA Table

PPA Table

Expected return on plan assets:
 

 

 

Qualified/registered plans(3)
8.00
%
8.00
%
9.00% for all plans except 7.00% for plans assumed from Plum Creek

Nonregistered plans
3.50
%
3.50
%
3.50
%
Rate of compensation increase:
 

 

 

Salaried:
 

 

 

United States
13.00% to 2.00% decreasing with participant age

13.00% to 2.00% decreasing with participant age

13.00% to 2.00% decreasing with participant age

Canada
3.25
%
3.50
%
3.50
%
Hourly:
 

 

 

United States
13.00% to 2.30% decreasing with participant age

13.00% to 2.30% decreasing with participant age

13.00% to 2.30% decreasing with participant age

Canada
3.00
%
3.25
%
3.25
%
Lump sum distributions election(2)
60.00
%
60.00
%
60.00
%
(1) PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013.
(2) U.S. qualified salaried and nonqualified plans only.
(3) Beginning in 2017 we used an assumed expected return on plan assets of 8.00 percent for qualified and registered pension plans.
Derivative instruments | Qualified and Registered Plans [Member]  
Schedules of Allocation of Our Plans' Assets
The table below shows the fair value and aggregate notional amount of the derivative instruments held by our pension trusts at the end of the last two years.
DOLLAR AMOUNTS IN MILLIONS
 
FAIR VALUE
NOTIONAL
  
DECEMBER 31,
2018

DECEMBER 31,
2017

DECEMBER 31,
2018

DECEMBER 31,
2017

Equity and fixed income index derivatives, net
$
—

$
19

$
—

$
501

Foreign currency derivatives, net
—

12

13

1,413

Futures contracts, net
15

—

1,073

—

Total return swaps, net
262

445

558

1,443

Total
$
277

$
476

$
1,644

$
3,357