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Post-Employment Benefits
 12 Months Ended
Dec. 31, 2022
Postemployment Benefits [Abstract]  
Post-Employment Benefits Post-Employment Benefits
Retirement plans consist of defined benefit, defined contribution and medical and dental plans. Information for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:
Defined Benefit PlansMedical and Dental
Plans
(in millions)2022202120222021
Projected benefit obligations, January 1$12,773 $13,129 $1,566 $1,567 
Service cost — benefits earned during the year374 391 50 56 
Interest cost on projected benefit obligations300 248 36 33 
(Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs(3,645)(463)(437)(16)
Benefits paid(368)(340)(70)(74)
Other, including foreign currency translation(267)(192)(19)— 
Projected benefit obligations, December 31$9,167 $12,773 $1,126 $1,566 
Plan assets at fair value, January 1$13,468 $12,018 $370 $353 
Actual return (loss) on plan assets(1,856)1,521 (33)56 
Company contributions413 418 35 35 
Benefits paid(368)(340)(70)(74)
Other, including foreign currency translation(284)(149)— — 
Plan assets at fair value, December 31$11,373 $13,468 $302 $370 
Projected benefit obligations less (greater) than plan assets, December 31$2,206 $695 $(824)$(1,196)
Long-term assets$3,200 $2,270 $— $— 
Short-term liabilities(32)(31)(2)(2)
Long-term liabilities(962)(1,544)(822)(1,194)
Net asset (liability)$2,206 $695 $(824)$(1,196)
Amounts Recognized in Accumulated Other Comprehensive Income (loss):
Actuarial losses, net$1,960 $3,062 $27 $412 
Prior service cost (credits)(6)(5)(33)(39)
Total$1,954 $3,057 $(6)$373 
The $3.6 billion and $463 million of defined benefit plan gains in 2022 and 2021, respectively, that decreased the projected benefit obligations primarily reflect the year-over-year increases in the discount rates used to measure the obligations. The $437 million of medical and dental plan gains in 2022 that decreased the projected benefit obligations primarily reflect the year-over-year increase in the discount rates used to measure the obligations. The projected benefit obligations for non-U.S. defined benefit plans were $2.2 billion and $3.7 billion at December 31, 2022 and 2021, respectively. The accumulated benefit obligations for all defined benefit plans were $8.4 billion and $11.5 billion at December 31, 2022 and 2021, respectively.
For plans where the projected benefit obligations exceeded plan assets at December 31, 2022 and 2021, the projected benefit obligations and the aggregate plan assets were as follows:
(in millions) 20222021
Projected benefit obligation$1,270 $2,632 
Fair value of plan assets276 1,057 
For plans where the accumulated benefit obligations exceeded plan assets at December 31, 2022 and 2021, the aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets were as follows:
(in millions)20222021
Accumulated benefit obligation$1,044 $1,406 
Projected benefit obligation1,134 1,554 
Fair value of plan assets141 136 
The components of the net periodic benefit cost were as follows:
Defined Benefit PlansMedical and
Dental Plans
(in millions)202220212020202220212020
Service cost — benefits earned during the year$374 $391 $336 $50 $56 $46 
Interest cost on projected benefit obligations300 248 300 36 33 42 
Expected return on plans’ assets(931)(843)(770)(30)(27)(28)
Amortization of actuarial losses231 317 255 11 29 21 
Amortization of prior service cost (credits) 1 1 1 (24)(28)(28)
Total net cost$(25)$114 $122 $43 $63 $53 
Other comprehensive income (loss) for each respective year includes the amortization of actuarial losses and prior service costs (credits) as noted in the previous table. Other comprehensive income (loss) for each respective year also includes: net actuarial gains of $858 million for defined benefit plans and a gain of $374 million for medical and dental plans in 2022; net actuarial gains of $1.141 billion for defined benefit plans and a gain of $45 million for medical and dental plans in 2021, and net actuarial losses of $611 million for defined benefit plans and a gain of $23 million for medical and dental plans in 2020. The net actuarial gains in 2022 are primarily due to the year-over-year increase in discount rates partially offset by the impact of 2022 actual asset returns being less than expected returns. The net actuarial gains in 2021 are primarily due to the favorable impact of actual 2021 asset returns in excess of expected returns and the year-over-year increase in discount rates. The net actuarial losses in 2020 are primarily due to the year-over-year decline in discount rates, partially offset by the impact of actual asset returns in excess of expected returns.
The weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows:
202220212020
Discount rate5.0 %2.7 %2.3 %
Expected aggregate average long-term change in compensation4.5 %4.3 %4.3 %
The weighted average assumptions used to determine the net cost for defined benefit plans and medical and dental plans are as follows:
202220212020
Discount rate2.7 %2.3 %3.0 %
Expected return on plan assets7.5 %7.5 %7.5 %
Expected aggregate average long-term change in compensation4.4 %4.3 %4.3 %
The assumed health care cost trend rates for medical and dental plans at December 31 were as follows:
202220212020
Health care cost trend rate assumed for the next year7 %7 %8 %
Rate that the cost trend rate gradually declines to5 %5 %5 %
Year that rate reaches the assumed ultimate rate202720262025
The discount rates used to measure liabilities were determined based on high-quality fixed income securities that match the duration of the expected retiree benefits. The health care cost trend rates represent Abbott’s expected annual rates of change in the cost of health care benefits and are forward projections of health care costs as of the measurement date.
The following table summarizes the bases used to measure the defined benefit and medical and dental plan assets at fair value:
Basis of Fair Value Measurement
(in millions)
Outstanding
Balances
Quoted
Prices in
Active
Markets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Measured at
NAV (j)
December 31, 2022
Equities:
U.S. large cap (a)$2,866 $1,840 $— $— $1,026 
U.S. mid and small cap (b)693 684 — 1 8 
International (c)2,401 454 — — 1,947 
Fixed income securities:
U.S. government securities (d)362 5 341 — 16 
Corporate debt instruments (e)1,318 123 890 — 305 
Non-U.S. government securities (f)419 16 — — 403 
Other (g)775 297 75 — 403 
Absolute return funds (h)1,678 304 — — 1,374 
Cash and Cash Equivalents154 20 — — 134 
Other (i)1,009 7 — — 1,002 
$11,675 $3,750 $1,306 $1 $6,618 
December 31, 2021
Equities:
U.S. large cap (a)$3,664 $2,403 $— $— $1,261 
U.S. mid and small cap (b)936 876 — 4 56 
International (c)2,902 591 — — 2,311 
Fixed income securities:
U.S. government securities (d)366 21 325 — 20 
Corporate debt instruments (e)1,709 434 1,260 — 15 
Non-U.S. government securities (f)626 33 1 — 592 
Other (g)510 87 111 — 312 
Absolute return funds (h)1,934 476 — — 1,458 
Cash and Cash Equivalents266 35 — — 231 
Other (i)925 2 — — 923 
$13,838 $4,958 $1,697 $4 $7,179 
________________________________________________________
(a)A mix of index funds and actively managed equity accounts that are benchmarked to various large cap indices.
(b)A mix of index funds and actively managed equity accounts that are benchmarked to various mid and small cap indices.
(c)A mix of index funds and actively managed pooled investment funds that are benchmarked to various non-U.S. equity indices in both developed and emerging markets.
(d)A mix of index funds and actively managed accounts that are benchmarked to various U.S. government bond indices.
(e)A mix of index funds and actively managed accounts that are benchmarked to various corporate bond indices.
(f)Primarily United Kingdom, Canada, Japan and Eurozone government bonds.
(g)Primarily asset backed securities, bank loans, interest rate swap positions and diversified fixed income vehicles benchmarked to LIBOR, SOFR or EURIBOR.
(h)Primarily hedge funds and funds invested by managers that have a global mandate with the flexibility to allocate capital broadly across a wide range of asset classes and strategies including, but not limited to equities, fixed income, commodities, interest rate futures, currencies and other securities to outperform an agreed upon benchmark with specific return and volatility targets.
(i)Primarily investments in private funds, such as private equity, private credit, private real estate and private energy funds.
(j)Investments measured at fair value using the net asset value (NAV) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company are valued at the NAV provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. For approximately half of these funds, investments may be redeemed once per week or month, with a required 2 to 30 day notice period. For the remaining funds, daily redemption of an investment is allowed. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry recognized vendors. Abbott did not have any unfunded commitments related to fixed income funds at December 31, 2022 and 2021. Fixed income securities in a common collective trust or a registered investment company are valued at the NAV provided by the fund administrator. For the majority of these funds, investments may be redeemed either weekly or monthly, with a required 2 to 60 day notice period. For the remaining funds, investments may be generally redeemed daily.
Absolute return funds are valued at the NAV provided by the fund administrator. All private funds are valued at the NAV provided by the fund on a one-quarter lag adjusted for known cash flows and significant events through the reporting date. Abbott did not have any unfunded commitments related to absolute return funds at December 31, 2022 and 2021. Investments in these funds may be generally redeemed monthly or quarterly with required notice periods ranging from 45 to 90 days. For approximately $270 million and $290 million of the absolute return funds, redemptions are subject to a 33 percent gate and a 25 percent gate, respectively, and $70 million is subject to a lock until 2025. Investments in the private funds cannot be redeemed but the funds will make distributions through liquidation. The estimate of the liquidation period for each fund ranges from 2023 to 2032. Abbott’s unfunded commitment in these funds was $569 million and $585 million as of December 31, 2022 and 2021, respectively.
The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return, as well as balancing higher return, more volatile equity securities with lower return, less volatile fixed income securities. Investment allocations are made across a range of markets, industry sectors, capitalization sizes, and in the case of fixed income securities, maturities and credit quality. The plans do not directly hold any securities of Abbott. There are no known significant concentrations of risk in the plans’ assets. Abbott’s medical and dental plans’ assets are invested in a similar mix as the pension plan assets. The actual asset allocation percentages at year end are consistent with the company’s targeted asset allocation percentages.
The plans’ expected return on assets, as shown above, is based on management’s expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, as well as current economic and capital market conditions.
Abbott funds its domestic pension plans according to IRS funding limitations. International pension plans are funded according to similar regulations. Abbott funded $413 million in 2022 and $418 million in 2021 to defined pension plans. Abbott expects to contribute approximately $407 million to its pension plans in 2023.
Total benefit payments expected to be paid to participants, which includes payments funded from company assets, as well as paid from the plans, are as follows:
(in millions)Defined
Benefit Plans		Medical and
Dental Plans
2023$368 $67 
2024387 68 
2025406 69 
2026427 71 
2027449 74 
2028 to 20322,593 409 
The Abbott Stock Retirement Plan is the principal defined contribution plan. Abbott’s contributions to this plan were $190 million in 2022, $181 million in 2021 and $164 million in 2020.