The Anthem Cash Balance Plan A and the Anthem Cash Balance Plan B are cash balance pension plans covering certain eligible employees of the affiliated companies that participate in these plans. Effective January 1, 2006, benefits were curtailed, with the result that most participants stopped accruing benefits but continue to earn interest on benefits accrued prior to the curtailment. Certain participants subject to collective bargaining and certain other participants who met grandfathering rules continued to accrue benefits. Participants who did not receive credits and/or benefit accruals were included in the Anthem Cash Balance Plan A, while employees who were still receiving credits and/or benefits participated in the Anthem Cash Balance Plan B. Effective January 1, 2019, benefits under the Anthem Cash Balance Plan B were curtailed. All grandfathered participants no longer have pay credits added to their accounts but continue to earn interest on existing account balances. Participants continue to earn years of pension service for vesting purposes. Several pension plans acquired through various corporate mergers and acquisitions were merged into these plans in prior years.

The Employees’ Retirement Plan of Blue Cross of California, or the BCC Plan, is a defined benefit pension plan that covers eligible employees of Blue Cross of California who are covered by a collective bargaining agreement. Effective January 1, 2007, benefits were curtailed under the BCC Plan with the result that no Blue Cross of California employees hired or rehired after December 31, 2006 are eligible to participate in the BCC Plan.

All of the plans’ assets consist primarily of equity securities, fixed maturity securities, investment funds and cash. The funding policies for all plans are to contribute amounts at least sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, as amended, or ERISA, as amended by the Pension Protection Act of 2006, and in accordance with income tax regulations, plus such additional amounts as are necessary to provide assets sufficient to meet the benefits to be paid to plan participants.

The following tables disclose consolidated “pension benefits,” which include the defined benefit pension plans described above, and consolidated “other benefits,” which include postretirement health and welfare benefits including medical, vision and dental benefits offered to certain employees. Calculations were computed using assumptions at the December 31 measurement dates.



	Pension Benefits						Other Benefits
	2019			2018			2019			2018
Benefit obligation at beginning of year	$	1,743		$	1,872		$	431		$	524
Service cost	—			8			1			1
Interest cost	62			55			15			15
Actuarial loss (gain)	200			(70		)	5			(57		)
Benefits paid	(125		)	(122		)	(29		)	(52		)
Benefit obligation at end of year	$	1,880		$	1,743		$	423		$	431



	Pension Benefits						Other Benefits
	2019			2018			2019			2018
Fair value of plan assets at beginning of year	$	1,818		$	2,012		$	336		$	356
Actual return on plan assets	329			(76		)	55			(17		)
Employer contributions	4			4			5			49
Benefits paid	(125		)	(122		)	(29		)	(52		)
Fair value of plan assets at end of year	$	2,026		$	1,818		$	367		$	336



	Pension Benefits						Other Benefits
	2019			2018			2019			2018
Noncurrent assets	$	212		$	134		$	—		$	—
Current liabilities	(6		)	(6		)	—			—
Noncurrent liabilities	(60		)	(53		)	(56		)	(95		)
Net amount at December 31	$	146		$	75		$	(56	)	$	(95	)

The estimated net actuarial loss and prior service cost for the defined benefit pension plans that will be reclassified from accumulated other comprehensive loss into net periodic benefit costs over the next year are $22 and $0, respectively. The estimated net actuarial loss and prior service credit for postretirement benefit plans that will be reclassified from accumulated other comprehensive loss into net periodic benefit costs over the next year are $0 and $7, respectively.

As of December 31, 2019, certain pension plans had accumulated benefit obligations in excess of plan assets. For those same plans, the projected benefit obligation was also in excess of plan assets. Such plans had a combined projected benefit obligation, accumulated benefit obligation and fair value of plan assets of $104, $102 and $39, respectively.



	2019			2018			2017
Pension Benefits
Service cost	$	—		$	8		$	10
Interest cost	62			55			66
Expected return on assets	(138		)	(147		)	(147		)
Recognized actuarial loss	17			22			22
Settlement loss	9			5			7
Net periodic benefit credit	$	(50	)	$	(57	)	$	(42	)

Other Benefits
Service cost	$	1		$	1		$	1
Interest cost	15			15			21
Expected return on assets	(22		)	(24		)	(23		)
Recognized actuarial loss	2			3			11
Amortization of prior service credit	(12		)	(12		)	(13		)
Net periodic benefit credit	$	(16	)	$	(17	)	$	(3	)

During the years ended December 31, 2019, 2018 and 2017, we incurred total settlement losses of $9, $5 and $7, respectively, as lump-sum payments exceeded the service cost and interest cost components of net periodic benefit cost for certain of our plans.



	2019		2018		2017
Pension Benefits
Discount rate	4.15	%	3.44	%	3.77	%
Rate of compensation increase	3.00	%	3.00	%	3.00	%
Expected rate of return on plan assets	7.44	%	7.83	%	7.95	%

Other Benefits
Discount rate	4.04	%	3.42	%	3.82	%
Rate of compensation increase	3.00	%	3.00	%	3.00	%
Expected rate of return on plan assets	7.00	%	7.00	%	7.00	%

The assumed healthcare cost trend rates used to measure the expected cost of pre-Medicare (those who are not currently eligible for Medicare benefits) other benefits at our December 31, 2019 measurement date was 7.00% for 2020 with a gradual decline to 4.50% by the year 2028. The assumed healthcare cost trend rates used to measure the expected cost of post-Medicare (those who are currently eligible for Medicare benefits) other benefits at our December 31, 2019 measurement date was 6.00% for 2020 with a gradual decline to 4.50% by the year 2028. These estimated trend rates are subject to change in the future. The healthcare cost trend rate assumption affects the amounts reported. For example, an increase in the assumed healthcare cost trend rate of one percentage point would increase the postretirement benefit obligation as of December 31, 2019 by $23 and would increase service and interest costs by $1. Conversely, a decrease in the assumed healthcare cost trend rate of one percentage point would decrease the postretirement benefit obligation as of December 31, 2019 by $20 and would decrease service and interest costs by $1.

Plan assets include a diversified mix of equity securities, investment grade fixed maturity securities and other types of investments across a range of sectors and levels of capitalization to maximize long-term return for a prudent level of risk. The

weighted-average target allocation for pension benefit plan assets is 44% equity securities, 48% fixed maturity securities, and 8% to all other types of investments. Equity securities primarily include a mix of domestic securities, foreign securities and mutual funds invested in equities. Fixed maturity securities primarily include treasury securities, corporate bonds and asset-backed investments issued by corporations and the U.S. government. Other types of investments primarily include insurance contracts designed specifically for employee benefit plans and partnership interests, collective trusts that replicate money market funds and insurance contracts designed specifically for employee benefit plans. As of December 31, 2019, there were no significant concentrations of investments in the pension benefit assets or other benefit assets. No plan assets were invested in Anthem common stock.

The fair values of our pension benefit assets and other benefit assets by asset category and level inputs at December 31, 2019, excluding cash, investment income receivable and amounts due to/from brokers, resulting in a net asset of $64, are as follows (see Note 6, “Fair Value,” for additional information regarding the definition of level inputs):



	Level I		Level II		Level III		Total
December 31, 2019
Pension Benefit Assets:
Equity securities:
U.S. securities	$	626	$	—	$	—	$	626
Foreign securities	197		—		—		197
Mutual funds	38		—		—		38
Fixed maturity securities:
Government securities	—		252		—		252
Corporate securities	—		339		—		339
Asset-backed securities	—		163		—		163
Other types of investments:
Alternative investments	—		136		52		188
Insurance company contracts	—		—		175		175
Total pension benefit assets	$	861	$	890	$	227	$	1,978

Other Benefit Assets:
Equity securities:
U.S. securities	$	8	$	—	$	—	$	8
Foreign securities	2		—		—		2
Mutual funds	25		—		—		25
Fixed maturity securities:
Government securities	—		2		—		2
Corporate securities	—		4		—		4
Asset-backed securities	—		3		—		3
Other types of investments:
Alternative investments	—		1		—		1
Life insurance contracts	—		—		294		294
Investment in DOL 103-12 trust	—		12		—		12
Total other benefit assets	$	35	$	22	$	294	$	351

The fair values of our pension benefit assets and other benefit assets by asset category and level inputs at December 31, 2018, excluding cash, investment income receivable and amounts due to/from brokers, resulting in a net asset of $69, are as follows:



	Level I		Level II		Level III		Total
December 31, 2018
Pension Benefit Assets:
Equity securities:
U.S. securities	$	488	$	—	$	—	$	488
Foreign securities	147		—		—		147
Mutual funds	36		—		—		36
Fixed maturity securities:
Government securities	—		248		—		248
Corporate securities	—		347		—		347
Asset-backed securities	—		153		—		153
Other types of investments:
Alternative investments	—		—		187		187
Insurance company contracts	—		—		166		166
Total pension benefit assets	$	671	$	748	$	353	$	1,772

Other Benefit Assets:
Equity securities:
U.S. securities	$	9	$	—	$	—	$	9
Foreign securities	3		—		—		3
Mutual funds	27		—		—		27
Fixed maturity securities:
Government securities	—		3		—		3
Corporate securities	—		5		—		5
Asset-backed securities	—		5		—		5
Other types of investments:
Alternative investments	—		—		2		2
Life insurance contracts	—		—		249		249
Investment in DOL 103-12 trust	—		10		—		10
Total other benefit assets	$	39	$	23	$	251	$	313



	Alternative Investments			Insurance Company Contracts			Life Insurance Contracts			Total
Year ended December 31, 2019
Beginning balance at January 1, 2019	$	189		$	166		$	249		$	604
Actual return on plan assets relating to assets still held at the reporting date	28			12			45			85
Purchases	24			6			—			30
Sales	(52		)	(9		)	—			(61		)
Transfers out of Level III	(137		)	—			—			(137		)
Ending balance at December 31, 2019	$	52		$	175		$	294		$	521

Year ended December 31, 2018
Beginning balance at January 1, 2018	$	221		$	173		$	269		$	663
Actual return on plan assets relating to assets still held at the reporting date	(10		)	(7		)	(15		)	(32		)
Purchases	—			8			—			8
Sales	(22		)	(8		)	(5		)	(35		)
Ending balance at December 31, 2018	$	189		$	166		$	249		$	604

Year ended December 31, 2017
Beginning balance at January 1, 2017	$	114		$	173		$	238		$	525
Actual return on plan assets relating to assets still held at the reporting date	20			(1		)	31			50
Purchases	126			10			—			136
Sales	(39		)	(9		)	—			(48		)
Ending balance at December 31, 2017	$	221		$	173		$	269		$	663

During 2019, we transferred one of our alternative investments from Level III to Level II based on the inputs used to measure fair value. There were no other transfers into or out of Level III during the years ended December 31, 2019, 2018 or 2017.

Our current funding strategy is to fund an amount at least equal to the minimum required funding as determined under ERISA with consideration of maximum tax deductible amounts. We may elect to make discretionary contributions up to the maximum amount deductible for income tax purposes. For the years ended December 31, 2019, 2018 and 2017, no material contributions were necessary to meet ERISA required funding levels. However, during each of the years ended December 31, 2019, 2018 and 2017, we made tax deductible discretionary contributions to the pension benefit plans of $4. Employer contributions to other benefit plans represent discretionary contributions and do not include payments to retirees for current benefits.

In addition to the defined benefit plans, we maintain the Anthem 401(k) Plan, which is a qualified defined contribution plan covering substantially all employees. Voluntary employee contributions are matched by us subject to certain limitations. Contributions made by us totaled $201, $211 and $142 during 2019, 2018 and 2017, respectively. Contributions in 2018 include approximately $58 for a one time contribution made to employees following the enactment of the Tax Cuts and Jobs Act.