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Retirement and Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2018
Retirement and Benefit Plans  
Overfunded and Underfunded Pension Amounts Recognized in Other Liabilities in the Consolidated Balance Sheet
The overfunded and underfunded amounts recognized in other assets and accrued taxes, interest and expense, respectively, on the Consolidated Balance Sheets were as follows as of December 31:
($ in millions)20182017
Prepaid benefit cost$1-
Accrued benefit liability(18)(24)
Net underfunded status$(17)(24)
Defined Benefit Retirement Plans with an Overfunded Status
The following tables summarize the defined benefit retirement plans as of and for the years ended December 31:
Plans with an overfunded status(a)
($ in millions)20182017
Fair value of plan assets at January 1$185-
Actual return on assets(6)-
Settlement(9)-
Benefits paid(6)-
Fair value of plan assets at December 31$164-
Projected benefit obligation at January 1$188-
Interest cost6-
Settlement(9)-
Actuarial gain(16)-
Benefits paid(6)-
Projected benefit obligation at December 31$163-
Overfunded projected benefit obligation at December 31$1-
Accumulated benefit obligation at December 31(b)$163-

  • The Bancorp’s qualified defined benefit plan had an overfunded status at December 31, 2018. The Plan was underfunded at December 31, 2017 and is reflected in the underfunded status table.
  • Since the Plan’s benefits are frozen, the rate of compensation increase is no longer an assumption used to calculate the accumulated benefit obligation. Therefore, the accumulated benefit obligation was the same as the projected benefit obligation at December 31, 2018.
Defined Benefit Retirement Plans with an Underfunded Status
Plans with an underfunded status
($ in millions)20182017
Fair value of plan assets at January 1$-172
Actual return on assets-28
Contributions36
Settlement-(11)
Benefits paid(3)(10)
Fair value of plan assets at December 31$-185
Projected benefit obligation at January 1$21206
Interest cost18
Settlement-(11)
Actuarial (gain) loss(1)16
Benefits paid(3)(10)
Projected benefit obligation at December 31$18209
Underfunded projected benefit obligation at December 31$(18)(24)
Accumulated benefit obligation at December 31(a)$18209

Since the Plan’s benefits are frozen, the rate of compensation increase is no longer an assumption used to calculate the accumulated benefit obligation. Therefore, the accumulated benefit obligation was the same as the projected benefit obligation at both December 31, 2018 and 2017.
Net Periodic Benefit Cost and Other Changes In Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

The following table summarizes net periodic benefit cost and other changes in the Plan’s assets and benefit obligations recognized in OCI for the years ended December 31:

($ in millions)201820172016
Components of net periodic benefit cost:
Interest cost$789
Expected return on assets(11)(10)(11)
Amortization of net actuarial loss6711
Settlement347
Net periodic benefit cost$5916
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Net actuarial (gain) loss$(1)(1)2
Amortization of net actuarial loss(6)(7)(11)
Settlement(3)(4)(7)
Total recognized in other comprehensive income(10)(12)(16)
Total recognized in net periodic benefit cost and other comprehensive income$(5)(3)-
Plan Assets Measured at Fair Value on a Recurring Basis
The following tables summarize Plan assets measured at fair value on a recurring basis as of December 31:
Fair Value Measurements Using(a)
2018 ($ in millions)Level 1(d)Level 2(d)Level 3Total Fair Value
Cash equivalents$25--25
Mutual and exchange-traded funds46--46
Debt securities:
U.S. Treasury and federal agencies securities433-46
Mortgage-backed securities:
Non-agency commercial mortgage-backed securities-1-1
Asset-backed securities and other debt securities(b)-18-18
Total debt securities$4322-65
Total Plan assets, excluding collective funds$11422-136
Collective funds (NAV) 28 (c)
Total Plan assets$164

  • For further information on fair value hierarchy levels, refer to Note 1.
  • Includes corporate bonds.
  • Certain investments that are measured at fair value using the NAV per share (or its equivalent) 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 fair value of Plan assets presented elsewhere within this footnote.
  • During the year ended December 31, 2018, no assets or liabilities were transferred between Level 1 and Level 2.

Fair Value Measurements Using(a)
2017 ($ in millions)Level 1(d)Level 2(d)Level 3Total Fair Value
Cash equivalents$7--7
Equity securities27--27
Mutual and exchange-traded funds92--92
Debt securities:
U.S. Treasury and federal agencies securities93-12
Mortgage-backed securities:
Non-agency commercial mortgage-backed securities-1-1
Asset-backed securities and other debt securities(b)-17-17
Total debt securities$921-30
Total Plan assets, excluding collective funds$13521-156
Collective funds (NAV) 29 (c)
Total Plan assets$185

  • For further information on fair value hierarchy levels, refer to Note 1.
  • Includes corporate bonds.
  • Certain investments that are measured at fair value using the NAV per share (or its equivalent) 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 fair value of Plan assets presented elsewhere within this footnote.
  • During the year ended December 31, 2017, no assets or liabilities were transferred between Level 1 and Level 2.
Plan Assumptions
The following table summarizes the weighted-average plan assumptions for the years ended December 31:
201820172016
For measuring benefit obligations at year end:(a)
Discount rate4.10%3.473.97
Expected return on plan assets6.006.007.00
For measuring net periodic benefit cost:(a)
Discount rate3.473.974.16
Expected return on plan assets6.006.007.00

(a) Since the Plan’s benefits were frozen, except for grandfathered employees, the rate of compensation increase is no longer applicable beginning in 2014 since minimal grandfathered employees are still accruing benefits.
Weighted Average Allocation of Plan Assets
The following table provides the Bancorp’s targeted and actual weighted-average asset allocations by asset category for the years ended December 31:
Targeted Range(b)20182017
Equity securities67%76
Bancorp common stock-1
Total equity securities(a)0-55%6777
Fixed-income securities50-1002316
Alternative strategies0-533
Cash0-10074
Total100%100

  • Includes mutual and exchange-traded funds.
  • These reflect the targeted ranges for the year ended December 31, 2018.