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Employee Benefit Plans (Notes)
 12 Months Ended
Dec. 31, 2019
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Employee Benefit Plans Employee Benefit Plans

Pension Plans

The Company sponsors three qualified defined benefit pension plans and one nonqualified defined benefit pension plan that provide pension benefits to a majority of employees who were employed by TWC before the merger with TWC.
 
Changes in the projected benefit obligation, fair value of plan assets and funded status of the pension plans from January 1 through December 31 are presented below:
 
 
2019
 
2018
Projected benefit obligation at beginning of year
$
3,041

 
$
3,569

Interest cost
129

 
128

Actuarial (gain) loss
499

 
(438
)
Settlement
(257
)
 
(169
)
Benefits paid
(51
)
 
(49
)
Projected benefit obligation at end of year (a)
$
3,361

 
$
3,041

 
 
 
 
Accumulated benefit obligation at end of year (a)
$
3,361

 
$
3,041

 
 
 
 
Fair value of plan assets at beginning of year
$
2,943

 
$
3,273

Actual return on plan assets
559

 
(118
)
Employer contributions
4

 
6

Settlement
(257
)
 
(169
)
Benefits paid
(51
)
 
(49
)
Fair value of plan assets at end of year (b)
$
3,198

 
$
2,943

 
 
 
 
Funded status
$
(163
)
 
$
(98
)

(a) 
As of December 31, 2019 and 2018, qualified pension plans represented $3.3 billion and $3.0 billion, respectively, of both the projected benefit obligation and accumulated benefit obligation while the Company’s nonqualified pension plan represented $35 million and $34 million, respectively.
(b) 
The fair value of plan assets consists entirely of the Company’s qualified pension plans.

Pretax amounts recognized in the consolidated balance sheet as of December 31, 2019 and 2018 consisted of the following:

 
December 31,
 
2019
 
2018
Noncurrent asset
$
1

 
$
1

Current liability
(4
)
 
(4
)
Long-term liability
(160
)
 
(95
)
Net amounts recognized in consolidated balance sheet
$
(163
)
 
$
(98
)


The components of net periodic benefit (cost) for the years ended December 31, 2019, 2018 and 2017 consisted of the following:

 
Year Ended December 31,
 
2019
 
2018
 
2017
Interest cost
$
(129
)
 
$
(128
)
 
$
(133
)
Expected return on plan assets
164

 
198

 
189

Remeasurement gain (loss)
(104
)
 
122

 
(55
)
Net periodic pension benefit (cost)
$
(69
)
 
$
192

 
$
1



The remeasurement gains (losses) recorded during the years ended December 31, 2019, 2018 and 2017 were primarily driven by changes in the discount rate as well as gains or losses to record pension assets to fair value. The remeasurement loss recorded during the year ended December 31, 2017 was also impacted by the adoption of the revised lump sum conversion mortality tables published by the IRS effective January 1, 2018.

The discount rates used to determine benefit obligations as of December 31, 2019 and 2018 were 3.48% and 4.37%, respectively. The Company utilized the RP 2015/MP2015 mortality tables published by the Society of Actuaries to measure the benefit obligations as of December 31, 2019 and 2018.

Weighted average assumptions used to determine net periodic benefit costs consisted of the following:

 
Year ended December 31,
 
2019
 
2018
 
2017
Expected long-term rate of return on plan assets
5.75
%
 
5.75
%
 
6.50
%
Discount rate
4.37
%
 
4.24
%
 
3.88
%

In developing the expected long-term rate of return on plan assets, the Company considered the pension portfolio’s composition, past average rate of earnings and the Company’s future asset allocation targets. The weighted average expected long-term rate of return on plan assets and discount rate used to determine net periodic pension benefit for the year ended December 31, 2020 are expected to be 5.00% and 3.48%, respectively. The Company determined the discount rates used to determine benefit obligations and net periodic pension benefit based on the yield of a large population of high quality corporate bonds with cash flows sufficient in timing and amount to settle projected future defined benefit payments.

Pension Plan Assets

The assets of the qualified pension plans are held in a master trust in which the qualified pension plans are the only participating plans (the “Master Trust”). The investment policy for the qualified pension plans is to manage the assets of the Master Trust with the objective to provide for pension liabilities to be met, maintaining retirement income security for the participants of the plans and their beneficiaries. The investment portfolio is a mix of pooled funds invested in fixed income securities, equity securities and certain alternative investments with the objective of matching plan liability performance, diversifying risk and achieving a
target investment return. Pension assets are managed in a balanced portfolio comprised of two major components: a return-seeking portion and a liability-matching portion.

The Company uses an investment strategy designed to increase the fixed income allocation as the funded status of the qualified pension plans improves. As the qualified pension plans reach set funded status milestones, the assets will be rebalanced to shift more assets from equity to fixed income. Based on the progress with this strategy, the target investment allocation for pension fund assets is permitted to vary within specified ranges subject to Investment Committee approval for return-seeking securities and liability-matching securities. The target and actual investment allocation of the qualified pension plans by asset category consisted of the following:

 
December 31, 2019
 
December 31, 2018
 
Target Allocation
 
Actual Allocation
 
Target Allocation
 
Actual Allocation
 
 
 
 
Return-seeking securities
60.0
%
 
56.2
%
 
60.0
%
 
54.6
%
Liability-matching securities
40.0
%
 
43.7
%
 
40.0
%
 
45.1
%
Other investments
—
%
 
0.1
%
 
—
%
 
0.3
%


The following tables set forth the investment assets of the qualified pension plans by level within the fair value hierarchy as of December 31, 2019 and 2018:

 
December 31, 2019
 
December 31, 2018
 
Fair Value
 
Level 1
 
Level 2
 
Fair Value
 
Level 1
 
Level 2
Cash
$
4

 
$
4

 
$
—

 
$
4

 
$
4

 
$
—

Commingled bond funds(a)
1,335

 
—

 
1,335

 
1,270

 
—

 
1,270

Commingled equity funds(a)
1,135

 
—

 
1,135

 
952

 
—

 
952

Collective trust funds(b)
139

 
—

 
139

 
113

 
—

 
113

Total investment assets
2,613

 
$
4

 
$
2,609

 
2,339

 
$
4

 
$
2,335

Accrued investment income and other receivables
1

 
 
 
 
 
11

 
 
 
 
Investments measured at net asset value(c)
584

 
 
 
 
 
593

 
 
 
 
Fair value of plan assets
$
3,198

 
 
 
 
 
$
2,943

 
 
 
 


(a) 
Commingled funds include bond funds with corporate and U.S. treasury debt securities and equity funds with global equity index, infrastructure and real estate securities that have a readily determinable fair value and are valued using the net assets provided by the administrator of the fund. The value of each fund is based on the fair value of underlying securities in the portfolio, which represents the amount that the fund might reasonably expect to receive for the securities upon a sale, less liabilities, and then divided by the number of units outstanding. Equity securities within the funds are valued using observable inputs on either a daily or weekly basis and the resulting per share value serves as a basis for current redemption value. Debt securities within the funds are valued based on observable prices from the new issue market, benchmark quotes, secondary trading and dealer quotes.
(b) 
Collective trust funds consist of short-term investment strategies comprised of instruments issued or fully guaranteed by the U.S. government and/or its agencies and multi-strategy funds, which are valued using the net assets provided by the administrator of the fund. The value of each fund is based on the readily determinable fair value of the underlying assets owned by the fund, less liabilities, and then divided by the number of units outstanding.
(c) 
As a practical expedient, certain investment classes which hold securities that are not readily available for redemption and are measured at fair value using the net asset value ("NAV") per share (or its equivalent) have not been classified in the fair value hierarchy.

Investments Measured at Net Asset Value per Share Practical Expedient

The following table summarizes the investment classes for which fair value is measured using the NAV per share (or its equivalent) practical expedient as of December 31, 2019 and 2018. These investment classes are not readily available for redemption. The NAV of each fund is based on the fair value of underlying assets in the portfolio. Certain investments report NAV per share on a month or quarter lag. There are no material unfunded commitments with respect to these investment classes.

 
Fair Value
 
 
 
 
 
December 31,
 
Redemption Frequency (if currently eligible)
 
Redemption Notice Period
 
2019
 
2018
 
 
Alternative funds(a)
$
271

 
$
301

 
weekly, monthly, quarterly
 
1-180 days
Fixed income funds(b)
177

 
164

 
daily, monthly
 
10-40 days
Real estate funds(c)
136

 
128

 
quarterly
 
45-90 days
Investments measured at NAV
$
584

 
$
593

 
 
 
 

(a) 
The alternative fund investment class includes funds with various securities selected to provide complimentary sources of return with our equity and bond portfolios that better manage risk.  The Company’s alternative fund investments include holdings such as public equities, exchange traded derivatives, and corporate bonds, among others. A portion of the alternative funds cannot be redeemed until the one year anniversary of the purchase date.
(b) 
Fixed income funds invest in residential and commercial mortgages, as well as global sovereign securities.
(c) 
Real estate funds are not publicly traded and invest primarily in unlisted direct core real estate, including super-regional malls, shopping centers, and commercial real estate (e.g. education, healthcare and storage).

Pension Plan Contributions
The Company made no cash contributions to the qualified pension plans during the years ended December 31, 2019, 2018 and 2017; however, the Company may make discretionary cash contributions to the qualified pension plans in the future. Such contributions will be dependent on a variety of factors, including current and expected interest rates, asset performance, the funded status of the qualified pension plans and management’s judgment. For the nonqualified unfunded pension plan, the Company will continue to make contributions during 2020 to the extent benefits are paid.

Benefit payments for the pension plans are expected to be $183 million in 2020, $186 million in 2021, $188 million in 2022, $190 million in 2023, $190 million in 2024 and $929 million in 2025 to 2029.

Multiemployer Plans

The Company contributes to multiemployer plans under the terms of collective-bargaining agreements that cover its union-represented employees. Such multiemployer plans provide medical, pension and retirement savings benefits to active employees and retirees. The Company made contributions to multiemployer plans of $9 million, $9 million and $18 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019 and 2018, other long-term liabilities includes approximately $101 million and $104 million, respectively, related to the Company's withdrawal from a multiemployer pension plan.

Defined Contribution Benefit Plans

The Company’s employees may participate in the Charter Communications, Inc. 401(k) Savings Plan (the “401(k) Plan”). Employees that qualify for participation can contribute up to 50% of their salary, on a pre-tax basis, subject to a maximum contribution limit as determined by the Internal Revenue Service. The Company’s matching contribution is discretionary and is equal to 100% of the amount of the salary reduction the participant elects to defer (up to 6% of the participant’s eligible compensation), excluding any catch-up contributions and is paid by the Company on a per pay period basis. The Company made contributions to the 401(k) plan totaling $303 million, $290 million and $274 million for the years ended December 31, 2019, 2018 and 2017, respectively.

For employees who are not eligible to participate in the Company’s long-term incentive plan and who are not covered by a collective bargaining agreement, the Company offers a contribution to the Retirement Accumulation Plan ("RAP"), equal to 3% of eligible pay. The Company made contributions to the RAP totaling $152 million, $151 million and $139 million for the years ended December 31, 2019, 2018 and 2017, respectively.