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RETIREMENT BENEFITS
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
RETIREMENT BENEFITS RETIREMENT BENEFITS
BMS sponsors defined benefit pension plans, defined contribution plans and termination indemnity plans for certain employees.

Defined Benefit Pension Plans

The net periodic benefit cost of defined benefit pension plans was $11 million, $27 million, and $28 million during the years ended December 31, 2023, 2022 and 2021, respectively.
Changes in defined benefit pension plan obligations, assets, funded status and amounts recognized in the consolidated balance sheets were as follows:
Year Ended December 31,
Dollars in millions20232022
Benefit obligations at beginning of year$1,976 $2,935 
Service cost—benefits earned during the year29 36 
Interest cost80 42 
Settlements and curtailments(41)(58)
Actuarial (gains)/losses165 (760)
Benefits paid(65)(68)
Foreign currency and other94 (151)
Benefit obligations at end of year$2,238 $1,976 
Fair value of plan assets at beginning of year$2,027 $2,815 
Actual return on plan assets130 (570)
Employer contributions56 76 
Settlements(38)(53)
Benefits paid(65)(68)
Foreign currency and other102 (173)
Fair value of plan assets at end of year$2,212 $2,027 
Funded status$(26)$51 
Assets/(Liabilities) recognized:
Other non-current assets$284 $285 
Other current liabilities(20)(21)
Other non-current liabilities(290)(213)
Funded status$(26)$51 
Recognized in Accumulated other comprehensive loss:
Net actuarial losses$994 $869 
Prior service credit(21)(25)
Total$973 $844 

The accumulated benefit obligation for defined benefit pension plans was $2.2 billion and $2.0 billion at December 31, 2023 and 2022, respectively.

Additional information related to pension plan was as follows:
December 31,
Dollars in millions20232022
Pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation$1,045 $728 
Fair value of plan assets735 495 
Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation1,017 728 
Fair value of plan assets734 495 

Actuarial Assumptions

Weighted-average assumptions used to determine defined benefit pension plan obligations were as follows:
December 31,
 20232022
Discount rate3.4 %4.0 %
Rate of compensation increase1.4 %1.2 %
Interest crediting rate2.5 %2.5 %
Weighted-average actuarial assumptions used to determine defined benefit pension plan net periodic benefit cost were as follows:
Year Ended December 31,
 202320222021
Discount rate4.0 %1.6 %1.2 %
Expected long-term return on plan assets4.1 %3.6 %3.6 %
Rate of compensation increase1.2 %1.0 %1.3 %
Interest crediting rate2.5 %2.1 %2.2 %

The yield on high quality corporate bonds matching the duration of the benefit obligations is used in determining the discount rate. The FTSE Pension Discount Curve is used in developing the discount rate for the U.S. plans.

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 gains and losses related to plan benefit obligations primarily resulted from changes in discount rates.

Postretirement Benefit Plans

Comprehensive medical and group life benefits are provided for substantially all 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. Postretirement benefit plan obligations were $183 million and $187 million at December 31, 2023 and 2022, respectively. The weighted-average discount rate used to determine benefit obligations was 4.8% and 5.0% at December 31, 2023 and 2022, respectively. The net periodic benefit credits were not material.

Plan Assets

The fair value of pension plan assets by asset category was as follows:
 December 31, 2023December 31, 2022
Dollars in millionsLevel 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Plan Assets
Equity securities$1 $— $— $1 $1 $— $— $1 
Equity funds— 363 7 370 — 368 — 368 
Fixed income funds— 785 — 785 — 697 — 697 
Corporate debt securities— 332 — 332 — 376 — 376 
U.S. Treasury and agency securities— 58 — 58 — 75 — 75 
Insurance contracts— — 224 224 — — 123 123 
Cash and cash equivalents32 — — 32 43 — — 43 
Other— 18 38 56 — 15 35 50 
Plan assets subject to leveling$33 $1,556 $269 $1,858 $44 $1,531 $158 $1,733 
Plan assets measured at NAV as a practical expedient354 294 
Net plan assets$2,212 $2,027 
The investment valuation policies per investment class are as follows:

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 and fixed income 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.

There were no transfers between Levels 1, 2 and 3 during the year ended December 31, 2023. Investments using the practical expedient consist primarily of multi-asset funds which are redeemable on either a daily, 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, 2023 was broadly characterized as an allocation between equity securities (21%), debt securities (63%) and other investments (16%).

Contributions and Estimated Future Benefit Payments

The Company's estimated annual contributions and future benefits payments are not expected to be material.

Savings Plans

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 U.S. defined contribution plan expense was approximately $380 million in 2023, $360 million in 2022 and $350 million in 2021.