BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2019

Information with respect to the Company's benefit plans' assets and obligations as of December 31 was as follows:



	Pension Benefits																	Other
	Japan								U.S.									Postretirement Benefits
(In millions)	2019				2018				2019					2018				2019					2018
Projected benefit obligation:
Benefit obligation, beginning of year		$	396			$	341			$	875				$	908			$	37				$	36
Service cost		22				19				23					27				0					0
Interest cost		7				7				20					31				1					1
Actuarial (gain) loss		17				35				163			⁽³⁾		(69		)		4					4
Benefits and expenses paid		(11		)		(11		)		(23		)			(22		)		(3		)			(4		)
Effect of foreign exchange rate changes		5				5				0					0				0					0
Benefit obligation, end of year		436				396				1,058					875				39					37

Plan assets:
Fair value of plan assets, beginning of year		289				270				465					448				0					0
Actual return on plan assets		24				(9		)		98					(30		)		0					0
Employer contributions		38				34				104					69				3					4
Benefits and expenses paid		(11		)		(11		)		(23		)			(22		)		(3		)			(4		)
Effect of foreign exchange rate changes		4				5				0					0				0					0
Fair value of plan assets, end of year		344				289				644					465				0					0
Funded status of the plans⁽¹⁾		$	(92	)		$	(107	)		$	(414	)			$	(410	)		$	(39	)			$	(37	)

Amounts recognized in accumulated other comprehensive income:
Net actuarial (gain) loss		$	92			$	95			$	259				$	174			$	12				$	9
Prior service (credit) cost		(2		)		(2		)		(4		)			(4		)		0					0
Total included in accumulated other comprehensive income		$	90			$	93			$	255				$	170			$	12				$	9
Accumulated benefit obligation		$	390			$	356			$	886				$	746			N/A			⁽²⁾		N/A			⁽²⁾

⁽¹⁾ Recognized in other liabilities in the consolidated balance sheets

⁽²⁾Not applicable

⁽³⁾Actuarial losses increased due to lower discount rates at the end of 2019. Also, additional funds were contributed to the U.S. funded defined benefit plan in 2019. The Company contributed $95 million in 2019 compared to $60 million in 2018.

Information for Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets

Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets



	Pension Benefits
	Japan						U.S.
(In millions)	2019			2018			2019			2018
Accumulated benefit obligation		$	390		$	356		$	886		$	746
Fair value of plan assets		344			289			644			465

Information for Pension Plans with a Projected Benefit Obligation in Excess of Plan Assets



	Pension Benefits
	Japan ⁽¹⁾						U.S.⁽²⁾
(In millions)	2019			2018			2019			2018
Projected benefit obligation		$	436		$	396		$	1,058		$	875
Fair value of plan assets		344			289			644			465

⁽¹⁾ The net amount of projected benefit obligation and plan assets for the underfunded (including unfunded) Japan pension plan was $92 and $107 at December 31, 2019 and 2018, respectively, and was classified as liabilities on the statement of financial position.

⁽²⁾The net amount of projected benefit obligation and plan assets for the underfunded (including unfunded) U.S. pension plan was $414 and $410 at December 31, 2019 and 2018, respectively, and was classified as liabilities on the statement of financial position.

Schedule of Assumptions Used



	Pension Benefits																	Other
	Japan									U.S.								Postretirement Benefits
	2019			2018			2017			2019			2018		2017			2019			2018			2017
Weighted-average actuarial assumptions:
Discount rate - net periodic benefit cost	1.25	%		1.25	%		1.25	%		4.25	%		3.75	%	4.25	%		4.25	%		3.75	%		4.25	%
Discount rate - benefit obligations	.75			1.25			1.25			3.25			4.25		3.75			3.25			4.25			3.75
Expected long-term return on plan assets	2.00			2.00			2.00			6.25			6.50		6.75			N/A		⁽¹⁾	N/A		⁽¹⁾	N/A		⁽¹⁾
Rate of compensation increase	N/A		⁽¹⁾	N/A		⁽¹⁾	N/A		⁽¹⁾	4.00			4.00		4.00			N/A		⁽¹⁾	N/A		⁽¹⁾	N/A		⁽¹⁾
Health care cost trend rates	N/A		⁽¹⁾	N/A		⁽¹⁾	N/A		⁽¹⁾	N/A		⁽¹⁾	N/A		N/A		⁽¹⁾	7.50		⁽²⁾	7.40		⁽²⁾	5.40		⁽²⁾

⁽¹⁾ Not applicable

⁽²⁾For the years 2019, 2018 and 2017, the health care cost trend rates are expected to trend down to 3.8% in 54 years, 4.1% in 61 years, and 4.5% in 77 years, respectively.

Schedule of Net Benefit Costs

Total net periodic benefit cost includes the following components:



	Pension Benefits																								Other
		Japan											U.S.												Postretirement Benefits
(In millions)	2019				2018				2017				2019				2018				2017				2019			2018			2017
Service cost		$	22			$	19			$	20			$	23			$	27			$	24			$	0		$	0		$	0
Interest cost		7				7				6				20				31				40				1			1			1
Expected return on plan assets		(6		)		(6		)		(5		)		(29		)		(26		)		(24		)		0			0			0
Amortization of net actuarial loss		4				1				2				10				16				14				1			1			1
Net periodic (benefit) cost		$	27			$	21			$	23			$	24			$	48			$	54			$	2		$	2		$	2

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)

The following table summarizes the amounts recognized in other comprehensive loss (income) for the years ended December 31:



	Pension Benefits																								Other
	Japan												U.S.												Postretirement Benefits
(In millions)	2019				2018				2017				2019				2018				2017				2019				2018				2017
Net actuarial loss (gain)		$	1			$	52			$	(21	)		$	95			$	(13	)		$	28			$	4			$	4			$	0
Amortization of net actuarial loss		(4		)		(1		)		(2		)		(10		)		(16		)		(14		)		(1		)		(1		)		(1		)
Total		$	(3	)		$	51			$	(23	)		$	85			$	(29	)		$	14			$	3			$	3			$	(1	)

Schedule of Expected Benefit Payments

The following table provides expected benefit payments, which reflect expected future service, as appropriate.



	Pension Benefits						Other
(In millions)	Japan			U.S.			Postretirement Benefits
2020		$	13		$	25		$	3
2021		12			27			4
2022		17			29			4
2023		14			30			4
2024		16			31			4
2025-2029		84			203			16

Schedule of Allocation of Plan Assets

Asset allocation targets as of December 31, 2019 were as follows:



	Japan Pension			U.S. Pension
Domestic equities		5	%		40	%
International equities		20			20
Fixed income securities		66			40
Other		9			0
Total		100	%		100	%

Plan Assets

Fair Value, Assets Measured on Recurring Basis

The following table presents the fair value of Aflac Japan's pension plan assets that are measured at fair value on a recurring basis as of December 31. All of these assets are classified as Level 2 in the fair value hierarchy.



(In millions)	2019			2018
Japan pension plan assets:
Equities:
Japanese equity securities		$	17		$	14
International equity securities		67			50
Fixed income securities:
Japanese bonds		20			34
International bonds		207			160
Insurance contracts		33			31
Total		$	344		$	289

The following table presents the fair value of Aflac U.S.'s pension plan assets that are measured at fair value on a recurring basis as of December 31. All of these assets are classified as Level 1 in the fair value hierarchy.



(In millions)	2019			2018
U.S. pension plan assets:
Mutual funds:
Large cap equity funds		$	179		$	120
Mid cap equity funds		22			17
Real estate equity funds		16			13
International equity funds		112			92
Fixed income bond funds		209			179
Aflac Incorporated common stock		6			5
Cash and cash equivalents		100			39
Total		$	644		$	465