Pension plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Pension plans

(24)Pension plans

Certain Berkshire subsidiaries sponsor defined benefit pension plans. Benefits under the plans are generally based on years of service and compensation or fixed benefit rates. Plan sponsors may make contributions to the plans to meet regulatory requirements and may also make discretionary contributions. Our net periodic pension expense for each of the three years ending December 31, 2023 was as follows (in millions).

	2023			2022			2021
Service cost	$	111		$	181		$	257
Interest cost		640			482			410
Expected return on plan assets		(785	)		(975	)		(1,008	)
Other		2			156			203
Net periodic pension expense	$	(32	)	$	(156	)	$	(138	)

The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon service and compensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation levels. Benefit obligations under qualified U.S. defined benefit pension plans are funded through assets held in trusts. Pension obligations under certain other plans are unfunded and the aggregate PBOs of such plans were $1.0 billion and $1.1 billion as of December 31, 2023 and 2022, respectively. The costs of certain BHE pension plans are expected to be recoverable through the regulated rate making process.

The funded status reflected in the Consolidated Balance Sheets at year end 2023 and 2022 and reconciliations of the changes in PBOs and plan assets related to BHE’s pension plans and all other pension plans for each of the two years ending December 31, 2023 follow (in millions).

	2023									2022
	BHE			Other			Total			BHE			Other			Total
PBOs
Balance at the beginning of the year	$	3,215		$	9,523		$	12,738		$	4,780		$	14,012		$	18,792
Service cost		21			90			111			36			145			181
Interest cost		167			473			640			118			364			482
Benefits paid		(274	)		(578	)		(852	)		(250	)		(585	)		(835	)
Settlements paid		—			(448	)		(448	)		(164	)		(678	)		(842	)
Actuarial (gains) losses and other		140			438			578			(1,305	)		(3,735	)		(5,040	)
Balance at the end of the year	$	3,269		$	9,498		$	12,767		$	3,215		$	9,523		$	12,738
Plan assets
Balance at the beginning of the year	$	3,376		$	9,216		$	12,592		$	5,158		$	13,462		$	18,620
Employer contributions		27			118			145			29			133			162
Benefits paid		(274	)		(578	)		(852	)		(250	)		(585	)		(835	)
Settlements paid		—			(448	)		(448	)		(164	)		(678	)		(842	)
Actual return on plan assets		271			1,512			1,783			(1,162	)		(2,971	)		(4,133	)
Other		71			88			159			(235	)		(145	)		(380	)
Balance at the end of the year	$	3,471		$	9,908		$	13,379		$	3,376		$	9,216		$	12,592
Funded status – net (asset) liability	$	(202	)	$	(410	)	$	(612	)	$	(161	)	$	307		$	146

Notes to Consolidated Financial Statements

(24)Pension plans

The funded status at December 31, 2023 reflected in assets was $1,823 million and in liabilities was $1,211 million. The funded status at December 31, 2022 included in assets was $1,510 million and in liabilities was $1,656 million.

The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits earned based on service and compensation prior to the valuation date. The ABO was $12.3 billion at December 31, 2023 and $12.2 billion at December 31, 2022. Information for plans with PBOs and ABOs in excess of plan assets as of December 31, 2023 and 2022 follows (in millions).

	2023		2022
PBOs	$	5,679	$	6,422
Plan assets		4,469		4,766
ABOs		1,246		5,594
Plan assets		222		4,234

Weighted average assumptions used in determining PBOs and net periodic pension expense follow.

	2023			2022			2021
Discount rate applicable to PBOs		5.0	%		5.2	%		2.7	%
Expected long-term rate of return on plan assets		6.0		5.9			6.1
Rate of compensation increase	2.6			2.5			2.6
Discount rate applicable to net periodic pension expense		5.3			2.9			2.4

Pension benefit payments expected over the next ten years follow (in millions): 2024 – $895; 2025 – $886; 2026 – $885; 2027 – $896; 2028 – $885; and 2029 through 2033 – $4,434. We expect to contribute $118 million to the pension plans in 2024.

Fair value measurements of plan assets as of December 31, 2023 and 2022 follow (in millions).

	Fair Value								Investments carried at net
	Total		Level 1		Level 2		Level 3		asset value
December 31, 2023
Cash and cash equivalents	$	449	$	370	$	79	$	—	$	—
Equity securities		8,487		7,808		543		136		—
Fixed maturity securities		2,138		1,277		851		10		—
Investment funds and other		2,305		342		272		42		1,649
	$	13,379	$	9,797	$	1,745	$	188	$	1,649
December 31, 2022
Cash and cash equivalents	$	602	$	523	$	79	$	—	$	—
Equity securities		7,673		7,112		321		240		—
Fixed maturity securities		2,152		1,328		824		—		—
Investment funds and other		2,165		198		394		42		1,531
	$	12,592	$	9,161	$	1,618	$	282	$	1,531

See Note 21 for a discussion of fair value measurements. Plan assets are generally invested with the long-term objective of producing earnings to adequately cover expected benefit obligations, while assuming a prudent level of risk. Allocations may change due to changing market conditions and investment opportunities. The expected rates of return on plan assets reflect subjective assessments of expected long-term investment returns. Generally, past investment returns are not given significant consideration when establishing assumptions for expected long-term rates of return on plan assets. Actual experience will differ from the assumed rates of return.

Notes to Consolidated Financial Statements

(24)Pension plans

A reconciliation of the pre-tax accumulated other comprehensive income (loss) of our defined benefit pension plans for each of the two years ending December 31, 2023 follows (in millions).

	2023			2022
Balance at the beginning of the year	$	(738	)	$	(485	)
Amount included in net periodic pension expense		(12	)		123
Actuarial gains (losses) and other		589			(376	)
Balance at the end of the year	$	(161	)	$	(738	)

Several of our subsidiaries also sponsor defined contribution retirement plans, such as 401(k) or profit-sharing plans. Employee contributions are subject to regulatory limitations and specific plan provisions. Several plans provide for employer matching contributions as specified in the plans and may provide for additional discretionary employer contributions. Our defined contribution plan expense was approximately $1.1 billion in 2023, $0.8 billion in 2022 and $1.0 billion in 2021.