BMS sponsors defined benefit pension plans, defined contribution plans and termination indemnity plans for regular full-time employees. The principal defined benefit pension plan was the Bristol-Myers Squibb Retirement Income Plan (the “Plan”), which covered most U.S. employees. Future benefits related to service for the Plan were eliminated in 2009. BMS contributed at least the minimum amount required by ERISA. Plan benefits were based primarily on the participant’s years of credited service and final average compensation.

In December 2018, BMS announced plans to fully terminate the Plan. Pension obligations related to the Plan were to be distributed through a combination of lump sum payments to eligible Plan participants who elected such payments and through the purchase of group annuity contracts from wholly owned insurance subsidiaries of Athene Holding Ltd. (“Athene”). In 2019, $1.3 billion was distributed to Plan participants who elected lump sum payments during the election window, and group annuity contracts were purchased from Athene for $2.6 billion for the remaining Plan participants for whom Athene irrevocably assumed the pension obligations. These transactions fully terminated the Plan and resulted in a $1.5 billion non-cash pre-tax pension settlement charge in 2019.

BMS acquired Celgene on November 20, 2019. Certain of Celgene's international subsidiaries have both funded and unfunded defined benefit pension plans. We have recorded the fair value of the Celgene plans using assumptions and accounting policies consistent with those disclosed by BMS. Upon acquisition, the excess of projected benefit obligation over the plan assets was recognized as a liability and previously existing deferred actuarial gains and losses and unrecognized service costs or benefits were eliminated.



	Year Ended December 31,
Dollars in Millions	2019			2018			2017
Service cost — benefits earned during the year	$	26		$	26		$	25
Interest cost on projected benefit obligation	115			193			188
Expected return on plan assets	(200		)	(386		)	(411		)
Amortization of prior service credits	(4		)	(4		)	(4		)
Amortization of net actuarial loss	59			74			82
Settlements and Curtailments	1,640			121			159
Special termination benefits	—			—			3
Net periodic pension benefit cost/(credit)	$	1,636		$	24		$	42



	Year Ended December 31,
Dollars in Millions	2019			2018
Benefit obligations at beginning of year	$	5,966		$	6,749
Service cost—benefits earned during the year	26			26
Interest cost	115			193
Settlements and Curtailments	(4,105		)	(278		)
Actuarial losses/(gains)	777			(523		)
Benefits paid	(109		)	(123		)
Acquisition/Divestiture	262			—
Foreign currency and other	8			(78		)
Benefit obligations at end of year	$	2,940		$	5,966

Fair value of plan assets at beginning of year	$	6,129		$	6,749
Actual return on plan assets	804			(203		)
Employer contributions	63			71
Settlements	(4,104		)	(276		)
Benefits paid	(109		)	(123		)
Asset transfer	(424		)	—
Acquisition/Divestiture	164			—
Foreign currency and other	13			(89		)
Fair value of plan assets at end of year	$	2,536		$	6,129

(Unfunded)/Funded status	$	(404	)	$	163

Assets/(Liabilities) recognized:
Other non-current assets	$	192		$	622
Other current liabilities	(27		)	(32		)
Other non-current liabilities	(569		)	(427		)
Funded status	$	(404	)	$	163

Recognized in Accumulated other comprehensive loss:
Net actuarial losses	$	1,192		$	2,717
Prior service credit	(26		)	(30		)
Total	$	1,166		$	2,687



	December 31,
Dollars in Millions	2019		2018
Pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation	$	1,652	$	1,275
Fair value of plan assets	1,056		817
Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation	1,417		1,181
Fair value of plan assets	875		757

The expected return on plan assets assumption for each plan is based on management's expectations of long-term average rates of return to be achieved by the underlying investment portfolio. Several factors are considered in developing the expected return on plan assets, including long-term historical returns and input from external advisors. Individual asset class return forecasts were developed based upon market conditions, for example, price-earnings levels and yields and long-term growth expectations. The expected long-term rate of return is the weighted-average of the target asset allocation of each individual asset class.

Actuarial gains and losses resulted from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates) and from differences between assumed and actual experience (such as differences between actual and expected return on plan assets). Actuarial losses in 2019 related to plan benefit obligations were primarily the result of decreases in discount rates. Actuarial gains in 2018 related to plan benefit obligations were primarily the result of increases in discount `rates. Gains and losses are amortized over the life expectancy of the plan participants for U.S. plans (26 years in 2020) and expected remaining service periods for most other plans to the extent they exceed 10% of the higher of the market-related value or the projected benefit obligation for each respective plan.

Comprehensive medical and group life benefits are provided for substantially all legacy BMS U.S. retirees electing to participate in comprehensive medical and group life plans and to a lesser extent certain benefits for non-U.S. employees. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement. The life insurance plan is noncontributory. Plan assets consist principally of fixed-income securities. Postretirement benefit plan obligations were $255 million and $253 million at December 31, 2019 and 2018, respectively, and the fair value of plan assets were $398 million and $331 million at December 31, 2019 and 2018, respectively. The weighted-average discount rate used to determine benefit obligations was 2.9% and 3.9% at December 31, 2019 and 2018, respectively. The net periodic benefit credits were not material.



	December 31, 2019								December 31, 2018
Dollars in Millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Plan Assets
Equity securities	$	87	$	—	$	—	$	87	$	124	$	—	$	—	$	124
Equity funds	4		544		—		548		2		475		—		477
Fixed income funds	—		769		—		769		—		606		—		606
Corporate debt securities	—		764		—		764		—		3,865		—		3,865
U.S. Treasury and agency securities	—		168		—		168		—		553		—		553
Short-term investment funds	—		—		—		—		—		55		—		55
Insurance contracts	—		—		128		128		—		—		134		134
Cash and cash equivalents	24		—		—		24		311		—		—		311
Other	—		111		33		144		—		105		19		124
Plan assets subject to leveling	$	115	$	2,356	$	161	$	2,632	$	437	$	5,659	$	153	$	6,249

Plan assets measured at NAV as a practical expedient
Venture capital and limited partnerships							$	1							$	121
Other							301								91
Total plan assets measured at NAV as a practical expedient							302								212
Net plan assets							$	2,934							$	6,461

Level 1 inputs utilize unadjusted quoted prices in active markets accessible at the measurement date for identical assets or liabilities. The fair value hierarchy provides the highest priority to Level 1 inputs. These instruments include equity securities, equity funds and fixed income funds publicly traded on a national securities exchange, and cash and cash equivalents. Cash and cash equivalents are highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value. Pending trade sales and purchases are included in cash and cash equivalents until final settlement.

Level 2 inputs utilize observable prices for similar instruments, quoted prices for identical or similar instruments in non-active markets, and other observable inputs that can be corroborated by market data for substantially the full term of the assets or liabilities. Equity funds, fixed income funds, and short-term investment funds classified as Level 2 within the fair value hierarchy are valued at the NAV of their shares held at year end, which represents fair value. Corporate debt securities and U.S. Treasury and agency securities classified as Level 2 within the fair value hierarchy are valued utilizing observable prices for similar instruments and quoted prices for identical or similar instruments in markets that are not active.

Level 3 unobservable inputs are used when little or no market data is available. Insurance contracts are held by certain foreign pension plans and are carried at contract value, which approximates the estimated fair value and is based on the fair value of the underlying investment of the insurance company.

Essentially all venture capital and limited partnership investments were liquidated by the end of 2019. The remaining investments using the practical expedient consist of multi-asset funds and are redeemable on a either a daily or weekly or monthly basis.

The investment strategy is to maximize return while maintaining an appropriate level of risk to provide sufficient liquidity for benefit obligations and plan expenses. Individual plan investment allocations are determined by local fiduciary committees and the composition of total assets for all pension plans at December 31, 2019 was broadly characterized as an allocation between equity securities (28%), debt securities (63%) and other investments (9%).

The principal U.S. defined benefit pension plan was over-funded at termination. As a result, excess Plan assets of $424 million are reflected as BMS assets as of December 31, 2019. These assets are primarily reported in long term restricted cash due to the election to contribute these assets to the Bristol-Myers Squibb Savings and Investment Program, a qualified replacement plan. This election requires that these assets be used to fund future annual Company contribution to the Bristol-Myers Squibb Savings and Investment Program.

Contributions to pension plans were $63 million in 2019, $71 million in 2018 and $396 million in 2017 and are not expected to be material in 2020. Estimated annual future benefit payments for non-terminating plans (including lump sum payments) will be approximately $120 million in each of the next five years and in the subsequent five year period.

The principal defined contribution plan is the Bristol-Myers Squibb Savings and Investment Program. The contributions are based on employee contributions and the level of Company match. The expense attributed to defined contribution plans in the U.S. was approximately $200 million in 2019, 2018 and 2017.