Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

Net periodic benefit cost expensed by the Company included the following components (dollars in millions):

	For the Years Ended December 31,
	2019			2018			2017
Interest cost on projected benefit obligation	$	23		$	22		$	23
Expected return on plan assets	(29		)	(26		)	(25		)
Net amortization	4			5			4
Net periodic benefit (income) cost	$	(2	)	$	1		$	2

Schedule of Pretax Amounts Recognized in AOCI Not Recognized as Components of Net Periodic Benefit Cost

Pretax amounts recognized in AOCI that have not yet been recognized as components of net periodic benefit cost consist of (dollars in millions):

	December 31, 2019
Prior service credit	$	1
Net loss	(294		)
Total	$	(293	)

Schedule of Funded Status and Changes in Benefit Obligations and Fair Value of Plan Assets

The following table provides a reconciliation of the changes in the benefit obligation and fair value of plan assets as well as a summary of the Discover Pension Plan’s funded status (dollars in millions):

	For the Years Ended December 31,
	2019			2018
Reconciliation of benefit obligation
Benefit obligation at beginning of year	$	550		$	603
Interest cost	23			22
Actuarial losses (gains)	98			(57		)
Benefits paid	(21		)	(18		)
Benefit obligation at end of year	650			550

Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year	455			424
Actual return on plan assets	91			(36		)
Employer contributions	—			85
Benefits paid	(21		)	(18		)
Fair value of plan assets at end of year	525			455

Unfunded status (recorded in accrued expenses and other liabilities)	$	(125	)	$	(95	)

Schedule of Assumptions Used to Determine Benefit Obligations and Net Periodic Benefit Cost

The following table presents the assumptions used to determine the benefit obligation:

	December 31,
	2019		2018
Discount rate	3.30	%	4.27	%

The following table presents the assumptions used to determine net periodic benefit cost:

	For the Years Ended December 31,
	2019		2018		2017
Discount rate	4.27	%	3.68	%	4.29	%
Expected long-term rate of return on plan assets	6.15	%	6.15	%	6.50	%

Schedule of Pension Plan Assets by Level Within the Fair Value Hierarchy

The Discover Pension Plan’s assets are stated at fair value. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for the measurement, if available. If a quoted market price is not available, the estimate of the fair value is based on the best information available in the circumstances. The table below presents information about the Discover Pension Plan assets and indicates the level within the fair value hierarchy, as defined by ASC Topic 820, with which each item is associated as of the end of the current period. For a description of the fair value hierarchy, see Note 20: Fair Value Measurements. (dollars in millions):

	Level 1		Level 2		Level 3		Net Asset Value		Total		Net Asset Allocation
Balance at December 31, 2019
Assets
Cash	$	7	$	—	$	—	$	—	$	7	1	%
Domestic small/mid cap equity fund	—		6		—		—		6		1	%
Emerging markets equity fund	—		—		—		16		16		3	%
Global equity fund	—		73		3		45		121		23	%
Domestic large cap equity fund	—		8		—		—		8		2	%
Long duration credit fund	—		205		—		—		205		39	%
Non-core fixed income fund	—		—		64		—		64		12	%
U.S. Treasury securities	87		—		—		—		87		17	%
Temporary investment fund	—		15		—		—		15		3	%
Total assets	94		307		67		61		529
Liabilities
Futures contracts	—		4		—		—		4		1	%
Total liabilities	—		4		—		—		4
Net assets	$	94	$	303	$	67	$	61	$	525	100	%

Balance at December 31, 2018
Assets
Domestic small/mid cap equity fund	$	—	$	6	$	—	$	—	$	6	1	%
Emerging markets equity fund	—		—		—		17		17		4	%
Global equity fund	—		82		—		42		124		27	%
Domestic large cap equity fund	—		7		—		—		7		2	%
Long duration credit fund	—		125		—		—		125		28	%
Futures contracts	—		6		—		—		6		1	%
Non-core fixed income fund	—		—		65		—		65		14	%
U.S. Treasury securities	59		—		—		—		59		13	%
Stable value fund	—		1		—		—		1		—	%
Temporary investment fund	—		45		—		—		45		10	%
Total assets	$	59	$	272	$	65	$	59	$	455	100	%

Schedule of Expected Benefit Payments for Next Five Years and Thereafter

Expected benefit payments associated with the Discover Pension Plan for each of the next five years and in aggregate for the years thereafter are as follows (dollars in millions):

	December 31, 2019
2020	$	16
2021	$	18
2022	$	19
2023	$	20
2024	$	22
Following five years thereafter	$	132