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Pension plans and other postretirement benefits (Tables)
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Net Periodic Pension Expense for Defined Benefit Plans

Net periodic pension expense for defined benefit plans consisted of the following:

 

 

Year Ended December 31,

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2021

 

Service cost

 

$

11

 

 

$

18

 

 

$

20

 

Interest cost on benefit obligation

 

 

115

 

 

 

82

 

 

 

62

 

Expected return on plan assets

 

 

(201

)

 

 

(188

)

 

 

(143

)

Amortization of prior service cost

 

 

—

 

 

 

1

 

 

 

1

 

Recognized net actuarial (gain) loss

 

 

(2

)

 

 

20

 

 

 

89

 

Net periodic pension (benefit) cost

 

$

(77

)

 

$

(67

)

 

$

29

 

Net other postretirement benefits expense for defined benefit plans consisted of the following:

 

 

Year Ended December 31,

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2021

 

Service cost

 

$

2

 

 

$

3

 

 

$

1

 

Interest cost on benefit obligation

 

 

3

 

 

 

2

 

 

 

1

 

Amortization of prior service credit

 

 

(2

)

 

 

(3

)

 

 

(5

)

Recognized net actuarial gain

 

 

(3

)

 

 

(1

)

 

 

(1

)

Net other postretirement (benefit) cost

 

$

—

 

 

$

1

 

 

$

(4

)
Data Relating to Funding Position of Defined Benefit Plans

Data relating to the funding position of the defined benefit plans were as follows:

 

 

Pension Benefits

 

 

Other
Postretirement Benefits

 

(Dollars in millions)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Change in benefit obligation:

 

 

 

 

 

 

 

 

 

 

 

 

Benefit obligation at beginning of year

 

$

2,379

 

 

$

2,420

 

 

$

60

 

 

$

52

 

Service cost

 

 

11

 

 

 

18

 

 

 

2

 

 

 

3

 

Interest cost

 

 

115

 

 

 

82

 

 

 

3

 

 

 

2

 

Plan participants’ contributions

 

 

—

 

 

 

—

 

 

 

1

 

 

 

2

 

Actuarial (gain) loss

 

 

13

 

 

 

(636

)

 

 

(5

)

 

 

(22

)

Plan amendment

 

 

—

 

 

 

—

 

 

 

—

 

 

 

13

 

Business combinations

 

 

—

 

 

 

633

 

 

 

—

 

 

 

15

 

Medicare Part D reimbursement

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

Benefits paid

 

 

(149

)

 

 

(138

)

 

 

(4

)

 

 

(6

)

Benefit obligation at end of year

 

 

2,369

 

 

 

2,379

 

 

 

57

 

 

 

60

 

Change in plan assets:

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of plan assets at
   beginning of year

 

 

2,942

 

 

 

2,596

 

 

 

—

 

 

 

—

 

Actual return on plan assets

 

 

334

 

 

 

(386

)

 

 

—

 

 

 

—

 

Employer contributions

 

 

18

 

 

 

14

 

 

 

3

 

 

 

3

 

Business combinations

 

 

—

 

 

 

856

 

 

 

—

 

 

 

—

 

Plan participants’ contributions

 

 

—

 

 

 

—

 

 

 

1

 

 

 

2

 

Medicare Part D reimbursement

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

Benefits paid

 

 

(149

)

 

 

(138

)

 

 

(4

)

 

 

(6

)

Fair value of plan assets at end of year

 

 

3,145

 

 

 

2,942

 

 

 

—

 

 

 

—

 

Funded status

 

$

776

 

 

$

563

 

 

$

(57

)

 

$

(60

)

Prepaid asset recognized in the
   Consolidated Balance Sheet

 

$

922

 

 

$

715

 

 

$

—

 

 

$

—

 

Accrued liability recognized in the
   Consolidated Balance Sheet

 

 

(146

)

 

 

(152

)

 

 

(57

)

 

 

(60

)

Net accrued asset (liability)
   recognized in the Consolidated
   Balance Sheet

 

$

776

 

 

$

563

 

 

$

(57

)

 

$

(60

)

Amounts recognized in accumulated other
   comprehensive income were:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss (gain)

 

$

191

 

 

$

309

 

 

$

(37

)

 

$

(35

)

Net prior service cost (credit)

 

 

—

 

 

 

—

 

 

 

1

 

 

 

(1

)

Pre-tax adjustment to accumulated other
   comprehensive income

 

 

191

 

 

 

309

 

 

 

(36

)

 

 

(36

)

Taxes

 

 

(49

)

 

 

(80

)

 

 

9

 

 

 

9

 

Net adjustment to accumulated other
   comprehensive income

 

$

142

 

 

$

229

 

 

$

(27

)

 

$

(27

)
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income The table below reflects the changes in plan assets and benefit obligations recognized in other comprehensive income related to the Company’s postretirement benefit plans.

(Dollars in millions)

 

Pension Plans

 

 

Other
Postretirement
Benefit Plans

 

 

Total

 

2023

 

 

 

 

 

 

 

 

 

Net gain

 

$

(120

)

 

$

(5

)

 

$

(125

)

Amortization of prior service credit

 

 

—

 

 

 

2

 

 

 

2

 

Amortization of actuarial gain

 

 

2

 

 

 

3

 

 

 

5

 

Total recognized in other comprehensive income, pre-tax

 

$

(118

)

 

$

—

 

 

$

(118

)

2022

 

 

 

 

 

 

 

 

 

Net gain

 

$

(62

)

 

$

(22

)

 

$

(84

)

Net prior service cost

 

 

—

 

 

 

13

 

 

 

13

 

Amortization of prior service (cost) credit

 

 

(1

)

 

 

3

 

 

 

2

 

Amortization of actuarial (loss) gain

 

 

(20

)

 

 

2

 

 

 

(18

)

Total recognized in other comprehensive income, pre-tax

 

$

(83

)

 

$

(4

)

 

$

(87

)
Assumed Weighted-Average Rates Used to Determine Benefit Obligations

The assumed weighted-average rates used to determine benefit obligations at December 31 were:

 

 

Pension
Benefits

 

 

Other
Postretirement
Benefits

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Discount rate

 

 

5.00

%

 

 

5.00

%

 

 

5.00

%

 

 

5.00

%

Rate of increase in future compensation levels

 

 

3.32

 

 

 

3.33

 

 

 

—

 

 

 

—

 
Assumed Weighted-Average Rates Used to Determine Net Benefit Expense

The assumed weighted-average rates used to determine net benefit expense for the years ended December 31 were:

 

 

Pension Benefits

 

 

Other
Postretirement Benefits

 

 

 

2023

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

 

2021

 

Discount rate

 

 

5.00

%

 

 

2.75

%

 

 

2.50

%

 

 

5.00

%

 

 

2.75

%

 

 

2.50

%

Long-term rate of return on plan assets

 

 

6.25

 

 

 

6.25

 

 

 

6.25

 

 

 

—

 

 

 

—

 

 

 

—

 

Rate of increase in future compensation levels

 

 

3.33

 

 

 

3.35

 

 

 

3.37

 

 

 

—

 

 

 

—

 

 

 

—

 

 
Fair Values of Company's Pension Plan Assets by Asset Category

The fair values of the Company’s pension plan assets at December 31, 2023 and 2022, by asset category, were as follows:

 

 

Fair Value Measurement of Plan Assets At December 31, 2023

 

(Dollars in millions)

 

Total

 

 

Quoted Prices in Active Markets for Identical Assets (Level 1)

 

 

Significant Observable Inputs (Level 2)

 

 

Significant Unobservable Inputs (Level 3)

 

Asset category:

 

 

 

 

 

 

 

 

 

 

 

 

Money-market investments

 

$

65

 

 

$

41

 

 

$

24

 

 

$

—

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

M&T

 

 

112

 

 

 

112

 

 

 

—

 

 

 

—

 

Domestic (a)

 

 

512

 

 

 

512

 

 

 

—

 

 

 

—

 

International (b)

 

 

17

 

 

 

17

 

 

 

—

 

 

 

—

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic (a)

 

 

307

 

 

 

307

 

 

 

—

 

 

 

—

 

International (b)

 

 

501

 

 

 

501

 

 

 

—

 

 

 

—

 

 

 

 

1,449

 

 

 

1,449

 

 

 

—

 

 

 

—

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate (c)

 

 

227

 

 

 

—

 

 

 

227

 

 

 

—

 

Government

 

 

276

 

 

 

—

 

 

 

276

 

 

 

—

 

International

 

 

6

 

 

 

—

 

 

 

6

 

 

 

—

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic (d)

 

 

450

 

 

 

450

 

 

 

—

 

 

 

—

 

 

 

 

959

 

 

 

450

 

 

 

509

 

 

 

—

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

Diversified mutual fund

 

 

110

 

 

 

110

 

 

 

—

 

 

 

—

 

Real estate partnerships

 

 

29

 

 

 

7

 

 

 

—

 

 

 

22

 

Private equity / debt

 

 

235

 

 

 

—

 

 

 

—

 

 

 

235

 

Hedge funds

 

 

285

 

 

 

107

 

 

 

—

 

 

 

178

 

Guaranteed deposit fund

 

 

9

 

 

 

—

 

 

 

—

 

 

 

9

 

 

 

 

668

 

 

 

224

 

 

 

—

 

 

 

444

 

Total (e)

 

$

3,141

 

 

$

2,164

 

 

$

533

 

 

$

444

 

 

 

 

 

Fair Value Measurement of Plan Assets At December 31, 2022

 

(Dollars in millions)

 

Total

 

 

Quoted Prices in Active Markets for Identical Assets (Level 1)

 

 

Significant Observable Inputs (Level 2)

 

 

Significant Unobservable Inputs (Level 3)

 

Asset category:

 

 

 

 

 

 

 

 

 

 

 

 

Money-market investments

 

$

90

 

 

$

52

 

 

$

38

 

 

$

—

 

Equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

M&T

 

 

118

 

 

 

118

 

 

 

—

 

 

 

—

 

Domestic (a)

 

 

450

 

 

 

450

 

 

 

—

 

 

 

—

 

International (b)

 

 

19

 

 

 

19

 

 

 

—

 

 

 

—

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic (a)

 

 

279

 

 

 

279

 

 

 

—

 

 

 

—

 

International (b)

 

 

477

 

 

 

477

 

 

 

—

 

 

 

—

 

 

 

 

1,343

 

 

 

1,343

 

 

 

—

 

 

 

—

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate (c)

 

 

200

 

 

 

—

 

 

 

200

 

 

 

—

 

Government

 

 

236

 

 

 

—

 

 

 

236

 

 

 

—

 

International

 

 

15

 

 

 

—

 

 

 

15

 

 

 

—

 

Mutual funds:

 

 

 

 

 

 

 

 

 

 

 

 

Domestic (d)

 

 

422

 

 

 

422

 

 

 

—

 

 

 

—

 

 

 

 

873

 

 

 

422

 

 

 

451

 

 

 

—

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

Diversified mutual fund

 

 

108

 

 

 

108

 

 

 

—

 

 

 

—

 

Real estate partnerships

 

 

27

 

 

 

7

 

 

 

—

 

 

 

20

 

Private equity / debt

 

 

211

 

 

 

—

 

 

 

—

 

 

 

211

 

Hedge funds

 

 

276

 

 

 

109

 

 

 

—

 

 

 

167

 

Guaranteed deposit fund

 

 

10

 

 

 

—

 

 

 

—

 

 

 

10

 

 

 

 

632

 

 

 

224

 

 

 

—

 

 

 

408

 

Total (e)

 

$

2,938

 

 

$

2,041

 

 

$

489

 

 

$

408

 

 

(a)
This category is mainly comprised of equities of companies primarily within the small-cap, mid-cap and large-cap sectors of the U.S. economy and range across diverse industries.
(b)
This category is comprised of equities in companies primarily within the mid-cap and large-cap sectors of international markets mainly in developed and emerging markets in Europe and the Pacific Rim.
(c)
This category represents investment grade bonds of U.S. issuers from diverse industries.
(d)
Approximately 73% of the mutual funds were invested in investment grade bonds and 27% in high-yielding bonds at each of December 31, 2023 and 2022. The holdings within the funds were spread across diverse industries.
(e)
Excludes dividends and interest receivable totaling $4 million at each of December 31, 2023 and 2022.
Changes in Level 3 Pension Plan Assets Measured at Fair Value on Recurring Basis

The changes in Level 3 pension plan assets measured at estimated fair value on a recurring basis during the year ended December 31, 2023 were as follows:

(Dollars in millions)

 

Balance –
January 1,
2023

 

 

Net Purchases
(Sales)

 

 

Realized/
Unrealized
Gains
(Losses)

 

 

Balance –
December 31,
2023

 

Real estate partnerships

 

$

20

 

 

$

2

 

 

$

—

 

 

$

22

 

Private equity/debt

 

 

211

 

 

 

12

 

 

 

12

 

 

 

235

 

Hedge funds

 

 

167

 

 

 

—

 

 

 

11

 

 

 

178

 

Guaranteed deposit fund

 

 

10

 

 

 

—

 

 

 

(1

)

 

 

9

 

Total

 

$

408

 

 

$

14

 

 

$

22

 

 

$

444

 
Defined Benefit Plan Estimated Future Benefit Payments

Estimated benefits expected to be paid in future years related to the Company’s defined benefit pension and other postretirement benefits plans are as follows:

(Dollars in millions)

 

Pension
Benefits

 

 

Other
Postretirement
Benefits

 

Year ending December 31:

 

 

 

 

 

 

2024

 

$

150

 

 

$

4

 

2025

 

 

154

 

 

 

4

 

2026

 

 

157

 

 

 

4

 

2027

 

 

160

 

 

 

4

 

2028

 

 

164

 

 

 

4

 

2029 through 2033

 

 

838

 

 

 

19