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Post-Employment Benefits
 12 Months Ended
Dec. 31, 2023
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)2023202220232022
Projected benefit obligations, January 1$9,167 $12,773 $1,126 $1,566 
Service cost — benefits earned during the year230 374 38 50 
Interest cost on projected benefit obligations455 300 59 36 
(Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs458 (3,645)35 (437)
Benefits paid(377)(368)(77)(70)
Other, including foreign currency translation97 (267)— (19)
Projected benefit obligations, December 31$10,030 $9,167 $1,181 $1,126 
Plan assets at fair value, January 1$11,373 $13,468 $302 $370 
Actual return (loss) on plan assets1,611 (1,856)26 (33)
Company contributions349 413 37 35 
Benefits paid(377)(368)(77)(70)
Other, including foreign currency translation129 (284)— — 
Plan assets at fair value, December 31$13,085 $11,373 $288 $302 
Projected benefit obligations less (greater) than plan assets, December 31$3,055 $2,206 $(893)$(824)
Long-term assets$4,164 $3,200 $— $— 
Short-term liabilities(36)(32)(2)(2)
Long-term liabilities(1,073)(962)(891)(822)
Net asset (liability)$3,055 $2,206 $(893)$(824)
Amounts Recognized in Accumulated Other Comprehensive Income (loss):
Actuarial losses, net$1,751 $1,960 $62 $27 
Prior service costs (credits)6 (6)(22)(33)
Total$1,757 $1,954 $40 $(6)
The $458 million of defined benefit plan losses and $35 million of medical and dental plan losses in 2023 that increased the projected benefit obligations primarily reflect the year-over-year decline in the discount rates used to measure the obligations. The $3.6 billion of defined benefit plan gains and $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 $2.6 billion and $2.2 billion at December 31, 2023 and 2022, respectively. The accumulated benefit obligations for all defined benefit plans were $9.2 billion and $8.4 billion at December 31, 2023 and 2022, respectively.
For plans where the projected benefit obligations exceeded plan assets at December 31, 2023 and 2022, the projected benefit obligations and the aggregate plan assets were as follows:
(in millions) 20232022
Projected benefit obligation$1,314 $1,270 
Fair value of plan assets205 276 
For plans where the accumulated benefit obligations exceeded plan assets at December 31, 2023 and 2022, the aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets were as follows:
(in millions)20232022
Accumulated benefit obligation$1,175 $1,044 
Projected benefit obligation1,248 1,134 
Fair value of plan assets144 141 
The components of the net periodic benefit cost were as follows:
Defined Benefit PlansMedical and
Dental Plans
(in millions)202320222021202320222021
Service cost — benefits earned during the year$230 $374 $391 $38 $50 $56 
Interest cost on projected benefit obligations455 300 248 59 36 33 
Expected return on plans’ assets(971)(931)(843)(23)(30)(27)
Amortization of actuarial losses (gains)11 231 317 (2)11 29 
Amortization of prior service costs (credits) 1 1 1 (13)(24)(28)
Total net cost (income)$(274)$(25)$114 $59 $43 $63 
In addition, approximately $15 million of income was recognized in 2023 related to the curtailment of a non-U.S. defined benefit plan.
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 $182 million for defined benefit plans and a loss of $33 million for medical and dental plans in 2023; net actuarial gains of $858 million for defined benefit plans and a gain of $374 million for medical and dental plans in 2022, and net actuarial gains of $1.14 billion for defined benefit plans and a gain of $45 million for medical and dental plans in 2021. The net actuarial gains in 2023 related to defined benefit plans are primarily due to the favorable impact of actual asset returns in excess of expected returns, partially offset by the year-over-year decrease in discount rates. The net actuarial losses in 2023 related to medical and dental plans are primarily due to the year-over-year decrease in discount rates. The net actuarial gains in 2022 were 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 weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows:
202320222021
Discount rate4.8 %5.0 %2.7 %
Expected aggregate average long-term change in compensation4.6 %4.5 %4.3 %
The weighted average assumptions used to determine the net cost for defined benefit plans and medical and dental plans are as follows:
202320222021
Discount rate5.0 %2.7 %2.3 %
Expected return on plan assets7.6 %7.5 %7.5 %
Expected aggregate average long-term change in compensation4.5 %4.4 %4.3 %
The assumed health care cost trend rates for medical and dental plans at December 31 were as follows:
202320222021
Health care cost trend rate assumed for the next year8 %7 %7 %
Rate that the cost trend rate gradually declines to5 %5 %5 %
Year that rate reaches the assumed ultimate rate202920272026
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, 2023
Equities:
U.S. large cap (a)$3,425 $2,305 $— $— $1,120 
U.S. mid and small cap (b)814 807 — 1 6 
International (c)2,725 493 — — 2,232 
Fixed income securities:
U.S. government securities (d)391 5 371 — 15 
Corporate debt instruments (e)1,519 125 1,055 — 339 
Non-U.S. government securities (f)586 36 3 — 547 
Other (g)863 322 106 — 435 
Absolute return funds (h)1,669 270 — — 1,399 
Cash and Cash Equivalents276 16 — — 260 
Other (i)1,105 5 — — 1,100 
$13,373 $4,384 $1,535 $1 $7,453 
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 
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(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 SOFR, Sterling Overnight Interbank Average (SONIA) 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, 2023 and 2022. 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, 2023 and 2022. Investments in these funds may be generally redeemed monthly or quarterly with required notice periods ranging from 45 to 90 days. For approximately $280 million and $250 million of the absolute return funds, redemptions are subject to a 33 percent gate and a 25 percent gate, respectively, and $80 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 2024 to 2033. Abbott’s unfunded commitment in these funds was $555 million and $569 million as of December 31, 2023 and 2022, 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 U.S. Internal Revenue Service (IRS) funding limitations. International pension plans are funded according to similar regulations. Abbott funded $349 million in 2023 and $413 million in 2022 to defined pension plans. Abbott expects to contribute approximately $350 million to its pension plans in 2024.
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
2024$395 $65 
2025414 67 
2026434 70 
2027457 73 
2028479 77 
2029 to 20332,757 425 
The Abbott Stock Retirement Plan is the principal defined contribution plan. Abbott’s contributions to this plan were $199 million in 2023, $190 million in 2022 and $181 million in 2021.