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Retirement and Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2019
Retirement and Benefit Plans  
Schedule of Overfunded and Underfunded Amounts on 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)
 
2019
 
  
2018
 
Prepaid benefit cost
 
$
-
 
    
1
  
Accrued benefit liability
 
                           
(19
)
 
                          
(18
 )
Net underfunded status
 
$
(19
)
   
(17
 )
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)
 
2019
 
  
2018
 
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 cost
 
 
-
 
    
6
  
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
  
(a)
The Bancorp’s qualified defined benefit plan had an underfunded status at
December 31, 2019
and is reflected in the underfunded status table. The Plan had an overfunded status at December 31, 2018.
(b)
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)
 
2019
 
  
2018
 
Fair value of plan assets at January 1
 
$
                             
164
 
  
                     
-
  
Actual return on assets
 
 
26
 
    
-
  
Contributions
 
 
2
 
    
3
  
Settlement
 
 
(9
)
   
-
  
Benefits paid
 
 
(8
)
   
(3
 )
Fair value of plan assets at December 31
 
$
175
 
    
-
  
Projected benefit obligation at January 1
 
$
181
 
    
21
  
Interest cost
 
 
7
 
    
1
  
Settlement
 
 
(9
)
   
-
  
Actuarial loss (gain)
 
 
23
 
    
(1
 )
Benefits paid
 
 
(8
)
   
(3
 )
Projected benefit obligation at December 31
 
$
194
 
    
18
  
Underfunded projected benefit obligation at December 31
 
$
(19
)
   
(18
 )
Accumulated benefit obligation at December 31
(a)
  
$
194
 
    
18
  
(a)
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, 2019
and 2018.
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)
 
2019
 
  
2018
   
2017
 
Components of net periodic benefit cost:
 
 
 
    
     
 
Interest cost
 
$
           
7
 
  
          
7
    
          
8
  
Expected return on assets
 
 
(8
)
   
(11
 )    
(10
 )
Amortization of net actuarial loss
 
 
6
 
    
6
      
7
  
Settlement
 
 
3
 
    
3
      
4
  
Net periodic benefit cost
 
$
8
 
    
5
      
9
  
Other changes in plan assets and benefit obligations recognized in other comprehensive income:
 
Net actuarial loss (gain)
 
$
5
 
    
(1
 )    
(1
 )
Amortization of net actuarial loss
 
 
(6
)
   
(6
 )    
(7
 )
Settlement
 
 
(3
)
   
(3
 )    
(4
 )
Total recognized in other comprehensive income
 
 
(4
)
   
(10
 )    
(12
 )
Total recognized in net periodic benefit cost and other comprehensive income
 
$
4
 
    
(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)
  
2019 ($ in millions)
 
Level 1
(c)
    
Level 2
(c)
      
    
Level 3    
    
Total Fair Value  
  
Cash equivalents
 
$
                 
14
 
  
 
-
 
  
 
-
 
  
 
14
 
Mutual and exchange-traded funds
 
 
76
 
  
 
-
 
  
 
-
 
  
 
76
 
Debt securities:
 
 
 
  
 
 
  
 
 
  
 
 
U.S. Treasury and federal agencies securities
 
 
57
 
  
 
6
 
  
 
-
 
  
 
63
 
Mortgage-backed securities:
 
 
 
  
 
 
  
 
 
  
 
 
Non-agency
commercial mortgage-backed securities
  
 
-
 
  
 
1
 
  
 
-
 
  
 
1
 
Asset-backed securities and other debt securities
(b)
  
 
-
 
  
 
21
 
  
 
-
 
  
 
21
 
Total debt securities
 
$
57
 
  
 
28
 
  
 
-
 
  
 
85
 
Total Plan assets
 
$
147
 
  
 
28
 
  
 
-
 
  
 
175
 
(a)
For further information on fair value hierarchy levels, refer to Note 1.
(b)
Includes corporate bonds.
(c)
During the year ended December 31, 2019, no assets or liabilities were transferred between Level 1 and Level 2.
  
Fair Value Measurements Using
(a)
  
2018 ($ in millions)
 
Level 1
(d)
    
    
Level 2
(d)
            
    
Level 3          
    
Total Fair Value  
  
Cash equivalents
  $
25
      
-
      
-
      
25
  
Mutual and exchange-traded funds
   
46
      
-
      
-
      
46
  
Debt securities:
   
     
     
     
 
U.S. Treasury and federal agencies securities
   
43
      
3
      
-
      
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
  $
43
      
22
      
-
      
65
  
Total Plan assets, excluding collective funds
  $
114
      
22
      
-
      
136
  
Collective funds (NAV)
(c)
   
     
     
     
28
  
Total Plan assets
   
     
     
    $
164
  
(a)
For further information on fair value hierarchy levels, refer to Note 1.
(b)
Includes corporate bonds.
(c)
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.
(d)
During the year ended December 31, 2018, 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:
   
  
2019    
 
  
           2018    
    
           2017         
  
   
For measuring benefit obligations at year end:
(a)
  
 
 
    
     
 
Discount rate
 
 
3.05
 %
   
4.10
      
3.47
  
For measuring net periodic benefit cost:
(a)
  
 
 
    
     
 
Discount rate
 
 
4.10
 
    
3.47
      
3.97
  
Expected return on plan assets
 
 
5.50
 
    
6.00
      
6.00
  
   
(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)
  
    
 
2019           
 
    
2018           
  
   
Equity securities
(a)
    
0-55
  % 
    
 
19
 
    
67
  
Fixed-income securities
   
50-100
      
    
 
59
 
    
23
  
Alternative strategies
   
0-5
      
    
 
-      
 
    
3
  
Cash or cash equivalents
   
0-100
      
    
 
22
 
    
7
  
   
Total
   
   
 
100  %
 
    
100
  
   
(a)
Includes mutual and exchange-traded funds.
(b)
These reflect the targeted ranges for the year ended December 31, 2019.