XML 47 R21.htm IDEA: XBRL DOCUMENT v3.22.4
Retirement Plans
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Retirement Plans RETIREMENT PLANS
Defined Contribution Plans
We provide certain employees with defined contribution plans and other types of retirement plans. A portion of our retirement plan expense under the defined contribution plans is funded with Stryker common stock. The use of Stryker common stock represents a non-cash operating activity that is not reflected in our Consolidated Statements of Cash Flows.
202220212020
Plan expense$305 $259 $235 
Expense funded with Stryker common stock41 37 34 
Stryker common stock held by plan:
Dollar amount522 582 542 
Shares (in millions)2.1 2.2 2.2 
Value as a percentage of total plan assets10 %10 %11 %
Defined Benefit Plans
Certain of our subsidiaries have both funded and unfunded defined benefit pension plans covering some or all of their employees. The majority of our defined benefit pension plans have projected benefit obligations in excess of plan assets.
Discount Rate
The discount rates were selected using a hypothetical portfolio of high quality bonds on December 31 that would provide the necessary cash flows to match our projected benefit payments.
Expected Return on Plan Assets
The expected return on plan assets is determined by applying the target allocation in each asset category of plan investments to the anticipated return for each asset category based on historical and projected returns.
Components of Net Periodic Pension Cost
Net periodic benefit cost:202220212020
Service cost$(56)$(72)$(63)
Interest cost(10)(7)(8)
Expected return on plan assets15 11 13 
Amortization of prior service credit1 1 1 
Recognized actuarial loss(9)(16)(13)
Curtailment gain— 9 — 
Net periodic benefit cost$(59)$(74)$(70)
Changes in assets and benefit obligations recognized in OCI:
Net actuarial gain (loss)$244 $132 $(117)
Recognized net actuarial loss9 16 13 
Prior service credit and transition amount(1)(1)(1)
Curtailment gain— (9)— 
Total recognized in other comprehensive income (loss)$252 $138 $(105)
Total recognized in net periodic benefit cost and OCI$193 $64 $(175)
Weighted-average rates used to determine net periodic benefit cost:
Discount rate1.1 %0.8 %1.0 %
Expected return on plan assets3.1 %2.5 %2.9 %
Rate of compensation increase2.6 %2.6 %2.9 %
Weighted-average discount rate used to determine projected benefit obligations3.3 %1.1 %0.8 %
The actuarial gain (loss) for all pension plans was primarily related to a change in the discount rate used to measure the benefit obligations of those plans.
Investment Strategy
The investment strategy for our defined benefit pension plans is to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk tolerances.
20222021
Fair value of plan assets$420 $543 
Benefit obligations(673)(1,036)
Funded status$(253)$(493)
Reported as:
Noncurrent assets—other assets$21 $— 
Current liabilities—accrued compensation(3)(2)
Noncurrent liabilities—other liabilities(271)(491)
Pre-tax amounts recognized in AOCI:
Unrecognized net actuarial gain (loss)33 (215)
Unrecognized prior service credit11 7 
Total$44 $(208)
Change in Benefit Obligations
20222021
Beginning projected benefit obligations$1,036 $1,118 
Service cost56 72 
Interest cost10 7 
Foreign exchange impact(56)(70)
Employee contributions5 8 
Actuarial (gains) losses(354)(71)
Curtailment gain— (23)
Benefits paid(24)(5)
Ending projected benefit obligations$673 $1,036 
Ending accumulated benefit obligations$645 $987 
Change in Plan Assets
20222021
Beginning fair value of plan assets$543 $522 
Actual return(109)17 
Employer contributions19 33 
Employee contributions5 8 
Foreign exchange impact(24)(29)
Benefits paid(14)(8)
Ending fair value of plan assets$420 $543 
Allocation of Plan Assets
2023 Target2022 Actual2021 Actual
Equity securities25 %27 %23 %
Debt securities41 38 41 
Other34 35 36 
Total100 %100 %100 %
Valuation of Plan Assets
2022Level 1Level 2Level 3Total
Cash and cash equivalents$18 $— $— $18 
Equity securities21 99 — 120 
Corporate debt securities
2 151 — 153 
Other5 69 55 129 
Total$46 $319 $55 $420 
2021
Cash and cash equivalents$21 $— $— $21 
Equity securities28 119 — 147 
Corporate debt securities2 202 — 204 
Other4 68 99 171 
Total$55 $389 $99 $543 
Our Level 3 pension plan assets consist primarily of guaranteed investment contracts with insurance companies. The insurance contracts guarantee us principal repayment and a fixed rate of return. The $44 decrease in Level 3 pension plan assets is primarily driven by the change in the corresponding pension liability. We expect to contribute $19 to our defined benefit pension plans in 2023.
Estimated Future Benefit Payments
202320242025202620272028-2032
$22 $26 $23 $23 $25 $146