Defined-contribution Benefits. We provide eligible employees the opportunity to participate in defined-contribution savings plans (commonly known as 401(k) plans), which permit contributions on a before-tax and after-tax basis. Employees may contribute to various investment alternatives. In most of these plans, we match a portion of the employees’ contributions. Our contributions to these plans totaled $333 in 2019, $302 in 2018 and $274 in 2017. The defined-contribution plans held approximately 20 million shares of our common stock, representing approximately 7% of our outstanding shares on December 31, 2019 and 2018.

Pension Benefits. We have twelve noncontributory and five contributory trusteed, qualified defined-benefit pension plans covering eligible government business employees, and two noncontributory and four contributory plans covering eligible commercial business employees, including some employees of our international operations. The primary factors affecting the benefits earned by participants in our pension plans are employees’ years of service and compensation levels. Our primary government pension plans, which comprise the majority of our unfunded obligation, were closed to new salaried participants on January 1, 2007. Additionally, we made changes to these plans for certain participants effective in 2014 that limit or cease the benefits that accrue for future service. We made similar changes to our primary

Other Post-retirement Benefits. We maintain plans that provide post-retirement healthcare and life insurance coverage for certain employees and retirees. These benefits vary by employment status, age, service and salary level at retirement. The coverage provided and the extent to which the retirees share in the cost of the program vary throughout the company. The plans provide health and life insurance benefits only to those employees who retire directly from our service and not to those who terminate service prior to eligibility for retirement.

It is our policy to fund our defined-benefit retirement plans in a manner that optimizes the tax deductibility and contract recovery of contributions considered within our capital deployment framework. Therefore, we may make discretionary contributions in addition to the required contributions determined in accordance with IRS regulations. We contributed $185 to our pension plans in 2019. In 2020, our required contributions are approximately $470.

We maintain several tax-advantaged accounts, primarily Voluntary Employees’ Beneficiary Association (VEBA) trusts, to fund the obligations for some of our other post-retirement benefit plans. For non-funded plans, claims are paid as received. Contributions to our other post-retirement benefit plans were not material in 2019 and are not expected to be material in 2020.

Our contractual arrangements with the U.S. government provide for the recovery of contributions to our pension and other post-retirement benefit plans covering employees working in our defense segments. For non-funded plans, our government contracts allow us to recover claims paid. Following payment, these recoverable amounts are allocated to contracts and billed to the customer in accordance with the Cost Accounting Standards (CAS) and specific contractual terms. For some of these plans, the cumulative pension and other post-retirement benefit cost exceeds the amount currently allocable to contracts. To the extent we consider recovery of the cost to be probable based on our backlog and probable follow-on contracts, we defer the excess in other contract costs in other current assets on the Consolidated Balance Sheet until the cost is allocable to contracts. See Note A for a discussion of our other contract costs. For other plans, the amount allocated to contracts and included in revenue has exceeded the plans’ cumulative benefit cost. We have similarly deferred recognition of these excess earnings on the Consolidated Balance Sheet.

Estimating retirement plan assets, liabilities and costs requires the extensive use of actuarial assumptions. These include the long-term rate of return on plan assets, the interest rates used to discount projected benefit payments, healthcare cost trend rates and future salary increases. Given the long-term nature of the assumptions being made, actual outcomes can and often do differ from these estimates.

Our annual benefit cost consists of four primary elements: the cost of benefits earned by employees for services rendered during the year, an interest charge on our plan liabilities, an assumed return on our plan assets for the year, and other gains and losses, which result from changes in actuarial assumptions, differences between the actual and assumed long-term rate of return on assets, and changes we make to plan benefit terms. These gains and losses are initially deferred in AOCL and then amortized over future years as a component of our annual benefit cost. We amortize actuarial differences under qualified plans on a straight-line basis over the average remaining service period of eligible employees. If all or almost all of a plan’s participants are inactive or are not accruing additional benefits, we amortize these differences over the average remaining life expectancy of the plan participants. We recognize the difference between the actual and expected return on plan assets for qualified plans over five years. The deferral of these differences reduces the volatility of our annual benefit cost that can result either from year-to-year changes in the assumptions or from actual results that are not necessarily representative of the long-term financial position of these plans. We recognize differences under nonqualified plans immediately.



	Pension Benefits
Year Ended December 31	2019			2018			2017
Service cost	$	111		$	180		$	168
Interest cost	600			532			453
Expected return on plan assets	(911		)	(856		)	(679		)
Recognized net actuarial loss	326			359			362
Amortization of prior service credit	(19		)	(46		)	(66		)
Net annual benefit cost	$	107		$	169		$	238



	Other Post-retirement Benefits
Year Ended December 31	2019			2018			2017
Service cost	$	8		$	10		$	9
Interest cost	35			33			30
Expected return on plan assets	(36		)	(40		)	(34		)
Recognized net actuarial gain	(8		)	(4		)	(4		)
Amortization of prior service credit	(3		)	(4		)	(3		)
Net annual benefit credit	$	(4	)	$	(5	)	$	(2	)

We recognize an asset or liability on the Consolidated Balance Sheet equal to the funded status of each of our defined-benefit retirement plans. The funded status is the difference between the fair value of the plan’s assets and its benefit obligation. The following is a reconciliation of the benefit obligations and plan/trust assets, and the resulting funded status, of our defined-benefit retirement plans:



	Pension Benefits						Other Post-retirement Benefits
Year Ended December 31	2019			2018			2019			2018
Change in Benefit Obligation
Benefit obligation at beginning of year	$	(15,720	)	$	(14,212	)	$	(935	)	$	(996	)
Service cost	(111		)	(180		)	(8		)	(10		)
Interest cost	(600		)	(532		)	(35		)	(33		)
Acquisitions	—			(2,758		)	—			(62		)
Amendments	(3		)	15			(8		)	—
Actuarial (loss) gain	(2,446		)	1,183			(101		)	78
Settlement/curtailment/other	(33		)	23			(4		)	21
Benefits paid	806			741			64			67
Benefit obligation at end of year	$	(18,107	)	$	(15,720	)	$	(1,027	)	$	(935	)
Change in Plan/Trust Assets
Fair value of assets at beginning of year	$	11,532		$	10,130		$	570		$	541
Actual return on plan assets	2,206			(749		)	117			(4		)
Acquisitions	—			2,328			—			77
Employer contributions	185			571			2			1
Settlement/curtailment/other	39			(26		)	—			—
Benefits paid	(785		)	(722		)	(45		)	(45		)
Fair value of assets at end of year	$	13,177		$	11,532		$	644		$	570
Funded status at end of year	$	(4,930	)	$	(4,188	)	$	(383	)	$	(365	)

The overall increases in our pension benefit obligation and assets for the year ended December 31, 2018, were due primarily to the acquisition of CSRA retirement plans. The increase in the obligation due to acquired plans was offset partially by actuarial gains created by the change in the weighted-average discount rate, which increased from 3.69% at December 31, 2017, to 4.28% at December 31, 2018.



	Pension Benefits						Other Post-retirement Benefits
December 31	2019			2018			2019			2018
Noncurrent assets	$	61		$	67		$	94		$	74
Current liabilities	(166		)	(131		)	(130		)	(141		)
Noncurrent liabilities	(4,825		)	(4,124		)	(347		)	(298		)
Net liability recognized	$	(4,930	)	$	(4,188	)	$	(383	)	$	(365	)



	Pension Benefits						Other Post-retirement Benefits
Year Ended December 31	2019			2018			2019		2018
Net actuarial loss (gain)	$	1,151		$	422		$	20	$	(34	)
Prior service credit (cost)	3			(15		)	8		—
Amortization of:
Net actuarial (loss) gain from prior years	(326		)	(359		)	8		4
Prior service credit	19			46			3		4
Other*	—			(5		)	—		(2		)
Change in AOCL, pretax	$	847		$	89		$	39	$	(28	)

A pension plan’s funded status is the difference between the plan’s assets and its projected benefit obligation (PBO). The PBO is the present value of future benefits attributed to employee services rendered to date, including assumptions about future compensation levels. On December 31, 2019 and 2018, most of our pension plans had a PBO that exceeded the plans’ assets. Summary information for those plans follows:

A retirement plan’s accumulated benefit obligation (ABO) is the present value of future benefits attributed to employee services rendered to date, excluding assumptions about future compensation levels for pension plans. The ABO for all defined-benefit pension plans was $17.8 billion and $15.5 billion on December 31, 2019 and 2018, respectively. The ABO for all other post-retirement plans was $1 billion and $935 on December 31, 2019 and 2018, respectively. On December 31, 2019 and 2018, most of our retirement plans had an ABO that exceeded the plans’ assets. Summary information for those plans follows:



Assumptions on December 31	2019		2018
Pension Benefits
Benefit obligation discount rate	3.19	%	4.28	%
Rate of increase in compensation levels	2.68	%	2.79	%
Other Post-retirement Benefits
Benefit obligation discount rate	3.18	%	4.24	%
Healthcare cost trend rate:
Trend rate for next year	6.00	%	6.50	%
Ultimate trend rate	5.00	%	5.00	%
Year rate reaches ultimate trend rate	2024		2024



Assumptions for Year Ended December 31	2019		2018		2017
Pension Benefits
Discount rates:
Benefit obligation	4.28	%	3.69	%	4.19	%
Service cost	3.81	%	3.51	%	4.13	%
Interest cost	3.92	%	3.34	%	3.56	%
Expected long-term rate of return on assets	7.46	%	7.45	%	7.43	%
Rate of increase in compensation levels	2.77	%	2.79	%	2.90	%
Other Post-retirement Benefits
Discount rates:
Benefit obligation	4.24	%	3.64	%	4.11	%
Service cost	4.23	%	3.79	%	4.34	%
Interest cost	3.88	%	3.27	%	3.43	%
Expected long-term rate of return on assets	6.84	%	7.75	%	7.76	%

We base the discount rates on a current yield curve developed from a portfolio of high-quality, fixed-income investments with maturities consistent with the projected benefit payout period. We use the spot rate approach to identify individual spot rates along the yield curve that correspond with the timing of each projected service cost and discounted benefit obligation payment.

We determine the long-term rates of return on assets based on consideration of historical and forward-looking returns and the current and expected asset allocation strategy. We decreased the expected long-term rate of return on assets in our primary U.S. government and commercial pension plans by 75 basis points beginning in 2017, and we decreased the expected long-term rates of return on assets in our primary U.S. other post-retirement benefit plans by 100 basis points beginning in 2019, both following an assessment of the historical and expected long-term returns of our various asset classes.

Retirement plan assumptions are based on our best judgment, including consideration of current and future market conditions. Changes in these estimates impact future pension and other post-retirement benefit cost. As discussed above, we defer recognition of the cumulative benefit cost for our government plans in

A committee of our board of directors is responsible for the strategic oversight of our defined-benefit retirement plan assets held in trust. Management develops investment policies and provides oversight of a third-party investment manager who reports to the committee on a regular basis. The outsourced third-party investment manager develops investment strategies and makes all day-to-day investment decisions related to defined-benefit retirement plan assets in accordance with our investment policy and target allocation percentages.

Our investment policy endeavors to strike the appropriate balance among capital preservation, asset growth and current income. The objective of our investment policy is to generate future returns consistent with our assumed long-term rates of return used to determine our benefit obligations and net annual benefit cost. Target allocation percentages vary over time depending on the perceived risk and return potential of various asset classes and market conditions. At the end of 2019, our asset allocation policy ranges were:

More than 90% of our pension plan assets are held in a single trust for our primary U.S. government and commercial pension plans. On December 31, 2019, the trust was invested largely in publicly traded equities, fixed-income securities and commingled funds comprised of equity securities. The trust also invests in other asset classes consistent with our investment policy. Our investment policy allows the use of derivative instruments when appropriate to reduce anticipated asset volatility, to gain exposure to an asset class or to adjust the duration of fixed-income assets.

We hold assets in VEBA trusts for some of our other post-retirement benefit plans. These assets are managed by a third-party investment manager with oversight by management and are generally invested in publicly traded equities, fixed-income securities and commingled funds comprised of equity and fixed-income securities. Our asset allocation strategy for the VEBA trusts considers potential fluctuations in our other post-retirement benefit obligation, the taxable nature of certain VEBA trusts, tax deduction limits on contributions and the regulatory environment.

Our retirement plan assets are reported at fair value. See Note E for a discussion of the hierarchy for determining fair value. Our Level 1 assets include investments in publicly traded equity securities. These securities are actively traded and valued using quoted prices for identical securities from the market exchanges. Our Level 2 assets consist of fixed-income securities and commingled funds whose underlying investments are valued using observable marketplace inputs. The fair value of plan assets invested in fixed-income securities is generally determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets. Our plan assets that are invested in commingled funds are valued using a unit price or net asset value (NAV) that is based on the underlying investments of the fund. Our Level 3 assets include real estate funds, insurance deposit contracts, retirement annuity contracts and direct private equity investments.



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category	December 31, 2019
Cash and equivalents	$	56	$	—	$	56	$	—
Equity securities (a):
U.S. companies	958		958		—		—
Non-U.S. companies	128		128		—		—
Private equity investments	26		—		—		26
Fixed-income securities:
Corporate bonds (b)	2,163		—		2,163		—
Treasury securities	1,855		—		1,855		—
Commingled funds:
Equity funds	6,494		—		6,494		—
Fixed-income funds	365		—		365		—
Real estate funds	84		—		—		84
Other investments:
Insurance deposit contracts	137		—		—		137
Retirement annuity contracts	35		—		—		35
Total plan assets in fair value hierarchy	$	12,301	$	1,086	$	10,933	$	282
Plan assets measured using NAV as a practical expedient (c):
Real estate funds	443
Hedge funds	419
Equity funds	14
Total pension plan assets	$	13,177

(c)Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table for these investments are included to permit reconciliation of the fair value hierarchy to the total plan assets.



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset Category	December 31, 2018
Cash and equivalents	$	73	$	—	$	73	$	—
Equity securities (a):
U.S. companies	732		732		—		—
Non-U.S. companies	117		117		—		—
Private equity investments	20		—		—		20
Fixed-income securities:
Corporate bonds (b)	1,600		—		1,600		—
Treasury securities	1,410		—		1,410		—
Commingled funds:
Equity funds	5,243		—		5,243		—
Fixed-income funds	624		—		624		—
Real estate funds	68		—		—		68
Other investments:
Insurance deposit contracts	128		—		—		128
Total plan assets in fair value hierarchy	$	10,015	$	849	$	8,950	$	216
Plan assets measured using NAV as a practical expedient (c):
Hedge funds	910
Real estate funds	420
Fixed-income funds	101
Equity funds	86
Total pension plan assets	$	11,532



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Asset Category (a)	December 31, 2019
Cash and equivalents	$	18	$	—	$	18
Equity securities	92		92		—
Fixed-income securities	122		—		122
Commingled funds:
Equity funds	288		—		288
Fixed-income funds	113		—		113
Real estate funds	2		2		—
Total plan assets in fair value hierarchy	$	635	$	94	$	541
Plan assets measured using NAV as a practical expedient (b):
Real estate funds	5
Hedge funds	4
Total other post-retirement benefit plan assets	$	644

(a) We had no Level 3 investments on December 31, 2019.

(b) Investments measured at fair value using NAV as a practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table for these investments are included to permit reconciliation of the fair value hierarchy to the total plan assets.



	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Asset Category (a)	December 31, 2018
Cash and equivalents	$	23	$	—	$	23
Equity securities	80		80		—
Fixed-income securities	87		—		87
Commingled funds:
Equity funds	237		—		237
Fixed-income funds	111		—		111
Real estate funds	2		2		—
Total plan assets in fair value hierarchy	$	540	$	82	$	458
Plan assets measured using NAV as a practical expedient (b):
Hedge funds	22
Equity funds	3
Fixed-income funds	3
Real estate funds	2
Total other post-retirement benefit plan assets	$	570



	Private Equity Investments		Real Estate Funds			Insurance Deposits Contracts		Retirement Annuity Contracts		Total Level 3 Assets
December 31, 2017	$	18	$	51		$	120	$	—	$	189
Actual return on plan assets:
Unrealized losses, net	—		(1		)	—		—		(1		)
Realized gains, net	—		—			3		—		3
Purchases, sales and settlements, net	2		18			5		—		25
December 31, 2018	20		68			128		—		216
Actual return on plan assets:
Unrealized gains, net	5		6			6		—		17
Purchases, sales and settlements, net	1		10			3		35		49
December 31, 2019	$	26	$	84		$	137	$	35	$	282