Retirement Benefits (Tables)
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12 Months Ended |
Dec. 31, 2020 |
Retirement Benefits [Abstract] |
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Schedule of weighted average actuarial assumptions utilized defined benefit plans |
The weighted average actuarial assumptions utilized for the U.S. and significant non-U.S. defined benefit plans and post-retirement benefit plans are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Pension Benefits | | Post-retirement Benefits | | 2020 | | 2019 | | 2020 | | 2019 | Weighted average assumptions: | | | | | | | | Discount rate (for expense) | 2.57 | % | | 3.48 | % | | 2.72 | % | | 3.65 | % | Expected return on plan assets | 5.31 | % | | 5.74 | % | | — | | | — | | Rate of compensation increase (for expense)* | 1.76 | % | | 1.74 | % | | — | | | — | | Discount rate (for benefit obligation) | 1.92 | % | | 2.57 | % | | 2.42 | % | | 2.72 | % | Rate of compensation increase (for benefit obligation)* | 1.85 | % | | 1.76 | % | | — | | | — | |
The weighted average actuarial assumptions utilized in determining expense during the year and benefit obligation at the end of the year for the U.S. defined benefit and other U.S. post-retirement plans are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | U.S. Pension Benefits | | U.S. Post-retirement Benefits | | 2020 | | 2019 | | 2020 | | 2019 | Weighted average assumptions: | | | | | | | | Discount rate (for expense) | 3.44 | % | | 4.45 | % | | 3.10 | % | | 4.24 | % | Expected return on plan assets | 7.82 | % | | 7.95 | % | | — | | | — | | | | | | | | | | Discount rate (for benefit obligation) | 2.73 | % | | 3.44 | % | | 2.18 | % | | 3.10 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | Non-U.S. Pension Benefits | | Non-U.S. Post-retirement Benefits | | 2020 | | 2019 | | 2020 | | 2019 | Weighted average assumptions: | | | | | | | | Discount rate (for expense) | 2.09 | % | | 2.89 | % | | 2.53 | % | | 3.32 | % | Expected return on plan assets | 4.35 | % | | 4.87 | % | | — | | | — | | Rate of compensation increase (for expense) | 2.75 | % | | 2.82 | % | | — | | | — | | Discount rate (for benefit obligation) | 1.49 | % | | 2.09 | % | | 1.96 | % | | 2.53 | % | Rate of compensation increase (for benefit obligation) | 2.84 | % | | 2.75 | % | | — | | | — | |
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Schedule of components of net periodic benefit cost for U.S. defined benefit and other postretirement benefit plans |
The components of the net periodic benefit cost for defined benefit and other post-retirement plans are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Combined U.S. and significant non-U.S. Plans | Pension | | Post-retirement | For the Years Ended December 31, | Benefits | | Benefits | (In millions) | 2020 | | 2019 | | 2018 | | 2020 | | 2019 | | 2018 | Service cost | $ | 36 | | | $ | 31 | | | $ | 34 | | | $ | — | | | $ | — | | | $ | 1 | | Interest cost | 421 | | | 487 | | | 463 | | | 3 | | | 3 | | | 3 | | Expected return on plan assets | (844) | | | (863) | | | (864) | | | — | | | — | | | — | | Amortization of prior service (credit) | — | | | — | | | (2) | | | (2) | | | (2) | | | (2) | | Recognized actuarial loss (gain) | 161 | | | 104 | | | 146 | | | — | | | (1) | | | (1) | | Net periodic benefit (credit) cost | $ | (226) | | | $ | (241) | | | $ | (223) | | | $ | 1 | | | $ | — | | | $ | 1 | | | | | | | | | | | | | | Plan termination | 1 | | | — | | | — | | | — | | | — | | | — | | Settlement loss | 3 | | | 7 | | | 42 | | | — | | | — | | | — | | Total (credit) cost | $ | (222) | | | $ | (234) | | | $ | (181) | | | $ | 1 | | | $ | — | | | $ | 1 | |
The following chart provides the amounts reported in the consolidated statements of income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Combined U.S. and significant non-U.S. Plans | Pension Benefits | | Post-retirement Benefits | For the Years Ended December 31, | | (In millions) | 2020 | | 2019 | 2018 | | 2020 | | 2019 | 2018 | Compensation and benefits expense (Operating income) | $ | 36 | | | $ | 31 | | $ | 34 | | | $ | — | | | $ | — | | $ | 1 | | Other net benefit (credit) cost | (258) | | | (265) | | (215) | | | 1 | | | — | | — | | Total (credit) cost | $ | (222) | | | $ | (234) | | $ | (181) | | | $ | 1 | | | $ | — | | $ | 1 | |
The components of the net periodic benefit cost (credit) for the U.S. defined benefit and other post-retirement benefit plans are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | U.S. Plans only | Pension Benefits | | Post-retirement Benefits | For the Years Ended December 31, | | (In millions) | 2020 | | 2019 | | 2018 | | 2020 | | 2019 | | 2018 | | | | | | | | | | | | | Interest cost | 213 | | | 241 | | | 235 | | | 1 | | | 1 | | | 1 | | Expected return on plan assets | (345) | | | (343) | | | (357) | | | — | | | — | | | — | | | | | | | | | | | | | | Recognized actuarial loss (gain) | 72 | | | 44 | | | 55 | | | — | | | (1) | | | (1) | | Net periodic benefit (credit) cost | $ | (60) | | | $ | (58) | | | $ | (67) | | | $ | 1 | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | |
The components of the net periodic benefit cost for the non-U.S. defined benefit and other post-retirement benefit plans and the curtailment, settlement and termination expenses are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Years Ended December 31, | Non-U.S. Pension Benefits | | Non-U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2018 | | 2020 | | 2019 | | 2018 | Service cost | $ | 36 | | | $ | 31 | | | $ | 34 | | | $ | — | | | $ | — | | | $ | 1 | | Interest cost | 208 | | | 246 | | | 228 | | | 2 | | | 2 | | | 2 | | Expected return on plan assets | (499) | | | (520) | | | (507) | | | — | | | — | | | — | | Amortization of prior service credit | — | | | — | | | (2) | | | (2) | | | (2) | | | (2) | | Recognized actuarial loss | 89 | | | 60 | | | 91 | | | — | | | — | | | — | | Net periodic benefit (credit) cost | (166) | | | (183) | | | (156) | | | — | | | — | | | 1 | | Settlement loss | 3 | | | 7 | | | 42 | | | — | | | — | | | — | | | | | | | | | | | | | | Special termination benefits | 1 | | | — | | | — | | | — | | | — | | | — | | Total (credit) cost | $ | (162) | | | $ | (176) | | | $ | (114) | | | $ | — | | | $ | — | | | $ | 1 | |
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Schedule of MMC's defined benefit plans and postretirement plans |
The following schedules provide information concerning the Company’s U.S. defined benefit pension plans and post-retirement benefit plans: | | | | | | | | | | | | | | | | | | | | | | | | | U.S. Pension Benefits | | U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2020 | | 2019 | Change in benefit obligation: | | | | | | | | Benefit obligation at beginning of year | $ | 6,322 | | | $ | 5,529 | | | $ | 31 | | | $ | 32 | | | | | | | | | | Interest cost | 213 | | | 241 | | | 1 | | | 1 | | Employee contributions | — | | | — | | | 4 | | | 4 | | | | | | | | | | | | | | | | | | Plan combination | — | | | 64 | | | — | | | — | | | | | | | | | | Actuarial (gain) loss | 650 | | | 753 | | | 1 | | | 1 | | | | | | | | | | Benefits paid | (271) | | | (265) | | | (6) | | | (7) | | | | | | | | | | Benefit obligation, December 31 | $ | 6,914 | | | $ | 6,322 | | | $ | 31 | | | $ | 31 | | Change in plan assets: | | | | | | | | Fair value of plan assets at beginning of year | $ | 4,715 | | | $ | 4,062 | | | $ | 2 | | | $ | 1 | | | | | | | | | | Actual return on plan assets | 591 | | | 834 | | | — | | | — | | Employer contributions | 65 | | | 35 | | | 3 | | | 4 | | Employee contributions | — | | | — | | | 4 | | | 4 | | | | | | | | | | Benefits paid | (271) | | | (265) | | | (6) | | | (7) | | Other | — | | | 49 | | | (1) | | | — | | Fair value of plan assets, December 31 | $ | 5,100 | | | $ | 4,715 | | | $ | 2 | | | $ | 2 | | Net funded status, December 31 | $ | (1,814) | | | $ | (1,607) | | | $ | (29) | | | $ | (29) | | Amounts recognized in the consolidated balance sheets: | | | | | | | | Current liabilities | $ | (30) | | | $ | (29) | | | $ | (1) | | | $ | (1) | | Non-current liabilities | (1,784) | | | (1,578) | | | (28) | | | (28) | | Net liability recognized, December 31 | $ | (1,814) | | | $ | (1,607) | | | $ | (29) | | | $ | (29) | | Amounts recognized in other comprehensive income (loss): | | | | | | | | | | | | | | | | Net actuarial (loss) gain | (2,446) | | | (2,114) | | | 3 | | | 4 | | Total recognized accumulated other comprehensive (loss) income, December 31 | $ | (2,446) | | | $ | (2,114) | | | $ | 3 | | | $ | 4 | | Cumulative employer contributions in excess of (less than) net periodic cost | 632 | | | 507 | | | (32) | | | (33) | | Net amount recognized in consolidated balance sheet | $ | (1,814) | | | $ | (1,607) | | | $ | (29) | | | $ | (29) | | Accumulated benefit obligation at December 31 | $ | 6,914 | | | $ | 6,322 | | | $ | — | | | $ | — | |
The following schedules provide information concerning the Company’s non-U.S. defined benefit pension plans and non-U.S. post-retirement benefit plans: | | | | | | | | | | | | | | | | | | | | | | | | | Non-U.S. Pension Benefits | | Non-U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2020 | | 2019 | Change in benefit obligation: | | | | | | | | Benefit obligation at beginning of year | $ | 11,321 | | | $ | 8,969 | | | $ | 61 | | | $ | 57 | | Service cost | 36 | | | 31 | | | — | | | — | | Interest cost | 208 | | | 246 | | | 2 | | | 2 | | Employee contributions | 2 | | | 2 | | | — | | | — | | Plan combination | — | | | 915 | | | — | | | — | | Actuarial loss | 1,273 | | | 1,339 | | | 10 | | | 3 | | Plan amendments | 11 | | | (1) | | | — | | | — | | Effect of settlement | (13) | | | (25) | | | — | | | — | | | | | | | | | | Special termination benefits | 1 | | | — | | | — | | | — | | Benefits paid | (402) | | | (364) | | | (2) | | | (3) | | Foreign currency changes | 561 | | | 209 | | | 2 | | | 2 | | | | | | | | | | Benefit obligation, December 31 | $ | 12,998 | | | $ | 11,321 | | | $ | 73 | | | $ | 61 | | Change in plan assets: | | | | | | | | Fair value of plan assets at beginning of year | $ | 12,313 | | | $ | 10,306 | | | $ | — | | | $ | — | | Plan combination | — | | | 683 | | | — | | | — | | Actual return on plan assets | 1,415 | | | 1,367 | | | — | | | — | | Effect of settlement | (13) | | | (25) | | | — | | | — | | Company contributions | 78 | | | 87 | | | 2 | | | 3 | | Employee contributions | 2 | | | 2 | | | — | | | — | | Benefits paid | (402) | | | (364) | | | (2) | | | (3) | | Foreign currency changes | 635 | | | 257 | | | — | | | — | | | | | | | | | | | | | | | | | | Fair value of plan assets, December 31 | $ | 14,028 | | | $ | 12,313 | | | $ | — | | | $ | — | | Net funded status, December 31 | $ | 1,030 | | | $ | 992 | | | $ | (73) | | | $ | (61) | | Amounts recognized in the consolidated balance sheets: | | | | | | | | Non-current assets | $ | 1,764 | | | $ | 1,632 | | | $ | — | | | $ | — | | Current liabilities | (7) | | | (6) | | | (3) | | | (3) | | Non-current liabilities | (727) | | | (634) | | | (70) | | | (58) | | Net asset (liability) recognized, December 31 | $ | 1,030 | | | $ | 992 | | | $ | (73) | | | $ | (61) | | Amounts recognized in other comprehensive (loss) income: | | | | | | | | Prior service credit | $ | (13) | | | $ | (2) | | | $ | 9 | | | $ | 11 | | Net actuarial loss | (3,467) | | | (3,055) | | | (16) | | | (5) | | Total recognized accumulated other comprehensive (loss) income, December 31 | $ | (3,480) | | | $ | (3,057) | | | $ | (7) | | | $ | 6 | | Cumulative employer contributions in excess of (less than) net periodic cost | 4,510 | | | 4,049 | | | (66) | | | (67) | | Net asset (liability) recognized in consolidated balance sheets, December 31 | $ | 1,030 | | | $ | 992 | | | $ | (73) | | | $ | (61) | | Accumulated benefit obligation, December 31 | $ | 12,736 | | | $ | 11,079 | | | $ | — | | | $ | — | |
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Schedule of total recognized in net periodic benefit cost and other comprehensive income (loss) |
| | | | | | | | | | | | | | | | | | | | | | | | | U.S. Pension Benefits | | U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2020 | | 2019 | Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive income (loss): | | | | | | | | Beginning balance | $ | (2,114) | | | $ | (1,896) | | | $ | 4 | | | $ | 6 | | Recognized as component of net periodic benefit cost (credit) | 72 | | | 44 | | | — | | | (1) | | Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | | | | | Liability experience | (650) | | | (753) | | | (1) | | | (1) | | Asset experience | 246 | | | 491 | | | — | | | — | | Total loss recognized as change in plan assets and benefit obligations | (404) | | | (262) | | | (1) | | | (1) | | Net actuarial (loss) gain, December 31 | $ | (2,446) | | | $ | (2,114) | | | $ | 3 | | | $ | 4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Non-U.S. Pension Benefits | | Non-U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2020 | | 2019 | Reconciliation of prior service (cost) credit recognized in accumulated other comprehensive income (loss): | | | | | | | | Beginning balance | $ | (2) | | | $ | (2) | | | $ | 11 | | | $ | 12 | | Recognized as component of net periodic benefit credit: | | | | | | | | Amortization of prior service credit | — | | | — | | | (2) | | | (2) | | | | | | | | | | Total recognized as component of net periodic benefit credit | — | | | — | | | (2) | | | (2) | | Changes in plan assets and benefit obligations recognized in other comprehensive income: | | | | | | | | Plan amendments | (11) | | | 1 | | | — | | | — | | Exchange rate adjustments | — | | | (1) | | | — | | | 1 | | Prior service (cost) credit, December 31 | $ | (13) | | | $ | (2) | | | $ | 9 | | | $ | 11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Non-U.S. Pension Benefits | | Non-U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2020 | | 2019 | Reconciliation of net actuarial (loss) gain recognized in accumulated other comprehensive (loss) income: | | | | | | | | Beginning balance | $ | (3,055) | | | $ | (2,568) | | | $ | (5) | | | $ | (1) | | Recognized as component of net periodic benefit cost: | | | | | | | | Amortization of net loss | 89 | | | 60 | | | — | | | — | | Effect of settlement | 3 | | | 7 | | | — | | | — | | Total recognized as component of net periodic benefit credit | 92 | | | 67 | | | — | | | — | | Changes in plan assets and benefit obligations recognized in other comprehensive income (loss): | | | | | | | | Liability experience | (1,273) | | | (1,339) | | | (10) | | | (3) | | Asset experience | 916 | | | 847 | | | — | | | — | | | | | | | | | | | | | | | | | | Total amount recognized as change in plan assets and benefit obligations | (357) | | | (492) | | | (10) | | | (3) | | Exchange rate adjustments | (147) | | | (62) | | | (1) | | | (1) | | Net actuarial loss, December 31 | $ | (3,467) | | | $ | (3,055) | | | $ | (16) | | | $ | (5) | |
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Schedule of amounts recognized in other comprehensive income (loss) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Years Ended December 31, | U.S. Pension Benefits | | U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2018 | | 2020 | | 2019 | | 2018 | Total recognized in net periodic benefit cost and other comprehensive loss | $ | 272 | | | $ | 160 | | | $ | 63 | | | $ | 2 | | | $ | 2 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Years Ended December 31, | Non-U.S. Pension Benefits | | Non-U.S. Post-retirement Benefits | (In millions) | 2020 | | 2019 | | 2018 | | 2020 | | 2019 | | 2018 | Total recognized in net periodic benefit cost and other comprehensive loss (income) | $ | 261 | | | $ | 311 | | | $ | (147) | | | $ | 13 | | | $ | 5 | | | $ | (5) | |
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Schedule of estimated future benefit payments for its pension and postretirement benefits |
The estimated future benefit payments for the Company's pension and post-retirement benefit plans are as follows: | | | | | | | | | | | | | | | | | | | | | | | | For the Years Ended December 31, | Pension Benefits | | Post-retirement Benefits | (In millions) | U.S. | | Non-U.S. | | U.S. | | Non-U.S. | 2021 | $ | 291 | | | $ | 344 | | | $ | 4 | | | $ | 3 | | 2022 | $ | 302 | | | $ | 353 | | | $ | 3 | | | $ | 3 | | 2023 | $ | 315 | | | $ | 373 | | | $ | 3 | | | $ | 3 | | 2024 | $ | 321 | | | $ | 382 | | | $ | 3 | | | $ | 3 | | 2025 | $ | 327 | | | $ | 394 | | | $ | 3 | | | $ | 3 | | 2026-2030 | $ | 1,701 | | | $ | 2,160 | | | $ | 10 | | | $ | 15 | |
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Summary of the U.S. and non-U.S. plans investments measured at fair value on a recurring basis |
The following table sets forth, by level within the fair value hierarchy, a summary of the U.S. and non-U.S. plans' investments measured at fair value on a recurring basis at December 31, 2020 and 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements at December 31, 2020 | Assets (In millions) | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | NAV | | Total | Common/collective trusts | $ | 561 | | | $ | — | | | $ | — | | | $ | 4,298 | | | $ | 4,859 | | Corporate obligations | — | | | 4,707 | | | 2 | | | — | | | 4,709 | | Corporate stocks | 2,737 | | | 39 | | | 1 | | | — | | | 2,777 | | Private equity/partnerships | — | | | — | | | — | | | 1,353 | | | 1,353 | | Government securities | 15 | | | 4,331 | | | — | | | — | | | 4,346 | | Real estate | — | | | — | | | — | | | 487 | | | 487 | | Short-term investment funds | 1,040 | | | — | | | — | | | — | | | 1,040 | | Company common stock | 234 | | | — | | | — | | | — | | | 234 | | Other investments | 13 | | | 7 | | | 771 | | | — | | | 791 | | Total investments | $ | 4,600 | | | $ | 9,084 | | | $ | 774 | | | $ | 6,138 | | | $ | 20,596 | | Net derivative liabilities | — | | | (1,522) | | | — | | | — | | | (1,522) | | Net Investments | $ | 4,600 | | | $ | 7,562 | | | $ | 774 | | | $ | 6,138 | | | $ | 19,074 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements at December 31, 2019 | Assets (In millions) | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | NAV | | Total | Common/collective trusts | $ | 492 | | | $ | — | | | $ | — | | | $ | 5,959 | | | $ | 6,451 | | Corporate obligations | — | | | 4,063 | | | — | | | — | | | 4,063 | | Corporate stocks | 2,871 | | | 34 | | | 1 | | | — | | | 2,906 | | Private equity/partnerships | — | | | — | | | — | | | 1,055 | | | 1,055 | | Government securities | 20 | | | 679 | | | — | | | — | | | 699 | | Real estate | — | | | — | | | — | | | 660 | | | 660 | | Short-term investment funds | 309 | | | 3 | | | — | | | — | | | 312 | | Company common stock | 223 | | | — | | | — | | | — | | | 223 | | Other investments | 15 | | | 17 | | | 682 | | | 2 | | | 716 | | Total investments | $ | 3,930 | | | $ | 4,796 | | | $ | 683 | | | $ | 7,676 | | | $ | 17,085 | |
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Summary of changes in the fair value of the plans' Level 3 assets |
The tables below set forth a summary of changes in the fair value of the plans’ Level 3 assets for the years ended December 31, 2020 and December 31, 2019: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets (In millions) | Fair Value, January 1, 2020 | | Purchases | | Sales | | Unrealized Gain/ (Loss) | | Realized Gain/ (Loss) | | Exchange Rate Impact | | Transfers in/(out) and Other | | Fair Value, December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other investments | $ | 682 | | | $ | 20 | | | $ | (12) | | | $ | 25 | | | $ | 1 | | | $ | 55 | | | $ | 2 | | | $ | 773 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Corporate stocks | 1 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | $ | 683 | | | $ | 20 | | | $ | (12) | | | $ | 25 | | | $ | 1 | | | $ | 55 | | | $ | 2 | | | $ | 774 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets (In millions) | Fair Value, January 1, 2019 | | Purchases | | Sales | | Unrealized Gain/ (Loss) | | Realized Gain/ (Loss) | | Exchange Rate Impact | | Transfers in/(out) and Other (a) | | Fair Value, December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Other investments | $ | 333 | | | $ | 17 | | | $ | (14) | | | $ | 72 | | | $ | 1 | | | $ | (9) | | | $ | 282 | | | $ | 682 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Corporate stocks | 1 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | $ | 334 | | | $ | 17 | | | $ | (14) | | | $ | 72 | | | $ | 1 | | | $ | (9) | | | $ | 282 | | | $ | 683 | |
(a) Transfers in during 2019 are primarily related to the inclusion of JLT plan assets.
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