Retirement Benefits

6 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Retirement Benefits

Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for some of its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax-qualified defined benefit pension plans is to contribute amounts at least sufficient to meet the funding requirements set forth in accordance with applicable law.

The target asset allocation for the Company's U.S. plans is 64% equities and equity alternatives and 36% fixed income. At June 30, 2021 the actual allocation for the Company's U.S. Plan was 65% equities and equity alternatives and 35% fixed income. The target allocation for the U.K. Plans at June 30, 2021 is 27% equities and equity alternatives and 73% fixed income. At June 30, 2021, the actual allocation for the U.K. Plans was 29% equities and equity alternatives and 71% fixed income. The Company's U.K. Plans comprised approximately 81% of non-U.S. plan assets at December 31, 2020. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company generally uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.

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 Benefits				Post-retirement Benefits
For the Three Months Ended June 30,
(In millions)	2021		2020		2021		2020
Service cost	$	10	$	9	$	—	$	—
Interest cost	86		104		1		—
Expected return on plan assets	(211)		(207)		—		—
Recognized actuarial loss	51		40		—		—
Net periodic benefit (credit) cost	$	(64)	$	(54)	$	1	$	—
Settlement loss	2		—		—		—
Total (credit) cost	$	(62)	$	(54)	$	1	$	—
Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits
For the Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Service cost	$	20	$	17	$	—	$	—
Interest cost	171		210		1		1
Expected return on plan assets	(419)		(417)		—		—
Amortization of prior service credit	—		—		(1)		(1)
Recognized actuarial loss	103		80		1		—
Net periodic benefit (credit) cost	$	(125)	$	(110)	$	1	$	—
Settlement loss	2		—		—		—
Total (credit) cost	$	(123)	$	(110)	$	1	$	—

Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits
For the Three Months Ended June 30,
(In millions)	2021		2020		2021		2020
Compensation and benefits expense	$	10	$	9	$	—	$	—
Other net benefit (credit) cost	(72)		(63)		1		—
Total (credit) cost	$	(62)	$	(54)	$	1	$	—

Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits
For the Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Compensation and benefits expense	$	20	$	17	$	—	$	—
Other net benefit (credit) cost	(143)		(127)		1		—
Total (credit) cost	$	(123)	$	(110)	$	1	$	—

U.S. Plans only	Pension Benefits				Post-retirement Benefits
For the Three Months Ended June 30,
(In millions)	2021		2020		2021		2020
Interest cost	$	46	$	54	$	—	$	—
Expected return on plan assets	(81)		(87)		—		—
Recognized actuarial loss	22		18		—		—
Net periodic benefit credit	$	(13)	$	(15)	$	—	$	—

U.S. Plans only	Pension Benefits				Post-retirement Benefits
For the Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Interest cost	$	92	$	107	$	—	$	—
Expected return on plan assets	(163)		(173)		—		—
Recognized actuarial loss	45		36		—		—
Net periodic benefit credit	$	(26)	$	(30)	$	—	$	—

Significant non-U.S. Plans only	Pension Benefits				Post-retirement Benefits
For the Three Months Ended June 30,
(In millions)	2021		2020		2021		2020
Service cost	$	10	$	9	$	—	$	—
Interest cost	40		50		1		—
Expected return on plan assets	(130)		(120)		—		—
Recognized actuarial loss	29		22		—		—
Net periodic benefit (credit) cost	$	(51)	$	(39)	$	1	$	—
Settlement loss	2		—		—		—
Total (credit) cost	$	(49)	$	(39)	$	1	$	—

Significant non-U.S. Plans only	Pension Benefits				Post-retirement Benefits
For the Six Months Ended June 30,
(In millions)	2021		2020		2021		2020
Service cost	$	20	$	17	$	—	$	—
Interest cost	79		103		1		1
Expected return on plan assets	(256)		(244)		—		—
Amortization of prior service credit	—		—		(1)		(1)
Recognized actuarial loss	58		44		1		—
Net periodic benefit (credit) cost	$	(99)	$	(80)	$	1	$	—
Settlement loss	2		—		—		—
Total (credit) cost	$	(97)	$	(80)	$	1	$	—

The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:

Combined U.S. and significant non-U.S. Plans	Pension Benefits				Post-retirement Benefits
June 30,	2021		2020		2021		2020
Weighted average assumptions:
Expected return on plan assets	4.72	%	5.31	%	—		—
Discount rate	1.92	%	2.57	%	2.42	%	2.72	%
Rate of compensation increase	1.85	%	1.76	%	—		—

The Company made approximately $57 million of contributions to its U.S. and non-U.S. defined benefit pension plans for the six months ended June 30, 2021. The Company expects to contribute approximately $72 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2021.

Defined Contribution Plans

The Company maintains certain defined contribution plans ("DC Plans") for its employees, the most significant being in the U.S. and the U.K. The cost of the U.S. DC Plans was $78 million and $73 million for the six months ended June 30, 2021 and 2020, respectively. The cost of the U.K. DC Plans was $73 million and $64 million for the six months ended June 30, 2021 and 2020, respectively.