Pension and Other Postretirement Benefit Plans

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Pension and Other Postretirement Benefit Plans

Pension and Other Postretirement Benefit Plans

The Company has defined benefit pension plans covering eligible employees in the U.S. and in certain of its international subsidiaries. The net periodic benefit cost (credit) of such plans consisted of the following components: 

	Three Months Ended March 31,
	2024				2023
($ in millions)	U.S.		International		U.S.		International
Service cost	$	86	$	61	$	76	$	49
Interest cost	134		74		133		74
Expected return on plan assets	(207)		(139)		(187)		(128)
Amortization of unrecognized prior service credit	—		(3)		—		(3)
Net loss (gain) amortization	10		1		—		(1)
Termination benefits	3		—		—		—
Curtailments	—		—		2		—
Settlements	—		—		21		—
	$	26	$	(6)	$	45	$	(9)

The Company provides medical benefits, principally to its eligible U.S. retirees and similar benefits to their dependents, through its other postretirement benefit plans. The net credit of such plans consisted of the following components: 

	Three Months Ended March 31,
($ in millions)	2024		2023
Service cost	$	8	$	8
Interest cost	14		16
Expected return on plan assets	(20)		(16)
Amortization of unrecognized prior service credit	(11)		(12)
Net gain amortization	(12)		(11)
	$	(21)	$	(15)

In connection with restructuring actions (see Note 4), termination charges were recorded on pension plans related to expanded eligibility for certain employees exiting Merck. Also, in connection with these restructuring activities, curtailments were recorded on certain pension plans. In addition, lump sum payments to U.S. pension plan participants triggered a partial settlement resulting in a charge of $21 million in the first quarter of 2023. This partial settlement triggered a remeasurement of some of the Company’s U.S. pension plans. The remeasurement, which was calculated using discount rates and asset values as of March 31, 2023, resulted in a net increase of $44 million to net pension liabilities and also resulted in a related adjustment to AOCL.

The components of net periodic benefit cost (credit) other than the service cost component are included in Other (income) expense, net (see Note 10), with the exception of certain amounts for termination benefits, curtailments and settlements, which are recorded in Restructuring costs if the event giving rise to the termination benefits, curtailment or settlement related to restructuring actions.