Several of our subsidiaries sponsor defined benefit pension plans covering certain employees. Benefits under the plans are generally based on years of service and compensation, although benefits under certain plans are based on years of service and fixed benefit rates. Our subsidiaries may make contributions to the plans to meet regulatory requirements and may also make discretionary contributions. The components of our net periodic pension expense for each of the three years ending December 31, 2019 were as follows (in millions).

The accumulated benefit obligation is the actuarial present value of benefits earned based on service and compensation prior to the valuation date. 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 non-U.S. plans and non-qualified U.S. plans are unfunded and the aggregate PBOs of such plans were approximately $1.3 billion and $1.2 billion as of December 31, 2019 and 2018, respectively.

Reconciliations of the changes in plan assets and PBOs related to BHE’s pension plans and all other pension plans for each of the two years ending December 31, 2019 are in the following tables (in millions). The costs of pension plans covering employees of certain regulated subsidiaries of BHE are generally recoverable through the regulated rate making process.

	2019									2018
	BHE			All other			Consolidated			BHE			All other			Consolidated
Benefit obligations
Accumulated benefit obligation end of year	$	4,653		$	12,889		$	17,542		$	4,346		$	11,540		$	15,886

PBO beginning of year	$	4,551		$	12,371		$	16,922		$	5,207		$	13,617		$	18,824
Service cost		32			192			224			40			231			271
Interest cost		161			457			618			161			432			593
Benefits paid		(257	)		(776	)		(1,033	)		(208	)		(633	)		(841	)
Settlements		(121	)		(46	)		(167	)		(301	)		(133	)		(434	)
Actuarial (gains) or losses and other		532			1,610			2,142			(348	)		(1,143	)		(1,491	)
PBO end of year	$	4,898		$	13,808		$	18,706		$	4,551		$	12,371		$	16,922

Plan assets
Plan assets beginning of year	$	4,385		$	10,574		$	14,959		$	5,129		$	11,885		$	17,014
Employer contributions		68			131			199			98			495			593
Benefits paid		(257	)		(776	)		(1,033	)		(208	)		(633	)		(841	)
Actual return on plan assets		650			1,764			2,414			(191	)		(949	)		(1,140	)
Settlements		(121	)		(46	)		(167	)		(324	)		(132	)		(456	)
Other		83			41			124			(119	)		(92	)		(211	)
Plan assets end of year	$	4,808		$	11,688		$	16,496		$	4,385		$	10,574		$	14,959

Funded status – net liability	$	90		$	2,120		$	2,210		$	166		$	1,797		$	1,963

The funded status of our defined benefit pension plans at December 31, 2019 reflected in assets was $857 million and in liabilities was $3,067 million. At December 31, 2018, the funded status included in assets was $510 million and in liabilities was $2,473 million.

Weighted average assumptions used in determining PBOs and net periodic pension expense were as follows.

Benefit payments expected over the next ten years are as follows (in millions): 2020 – $1,059; 2021 – $997; 2022 – $1,003; 2023 – $1,009; 2024 – $1,017; and 2025 to 2029 – $5,035. Sponsoring subsidiaries expect to contribute $191 million to defined benefit pension plans in 2020.

Fair value measurements of plan assets as of December 31, 2019 and 2018 follow (in millions).

	Fair Value								Investment funds and partnerships
	Total		Level 1		Level 2		Level 3		at net asset value
December 31, 2019
Cash and cash equivalents	$	412	$	309	$	103	$	—	$	—
Equity securities		11,105		9,860		836		409		—
Government obligations		1,537		1,433		104		—		—
Other fixed maturity securities		791		160		600		31		—
Investment funds and other		2,651		143		358		40		2,110
	$	16,496	$	11,905	$	2,001	$	480	$	2,110
December 31, 2018
Cash and cash equivalents	$	1,328	$	1,197	$	131	$	—	$	—
Equity securities		7,671		7,499		22		150		—
Government obligations		1,727		1,654		73		—		—
Other fixed maturity securities		836		172		631		33		—
Investment funds and other		3,397		170		1,042		273		1,912
	$	14,959	$	10,692	$	1,899	$	456	$	1,912

Refer to Note 20 for a discussion of the three levels in the hierarchy of fair values. 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 as a result of changing market conditions and investment opportunities. The expected rates of return on plan assets reflect subjective assessments of expected invested asset returns over a period of several years. 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.

A reconciliation of the pre-tax accumulated other comprehensive income (loss) related to defined benefit pension plans for each of the two years ending December 31, 2019 follows (in millions).

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 the specific plan provisions. Several plans provide for employer matching contributions up to levels specified in the plans and provide for additional discretionary contributions as determined by management. Employer contributions expensed with respect to our defined contribution plans were $1,233 million in 2019, $1,009 million in 2018 and $1,001 million in 2017.