Retirement Benefits

9 Months Ended

Sep. 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 September 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 September 30, 2021 is 27% equities and equity alternatives and 73% fixed income. At September 30, 2021, the actual allocation for the U.K. Plans was 28% equities and equity alternatives and 72% 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 plans are as follows:

Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2021		2020
Service cost	$	9	$	10
Interest cost	87		112
Expected return on plan assets	(208)		(212)
Recognized actuarial loss	52		40
Total credit	$	(60)	$	(50)
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2021		2020
Service cost	$	29	$	27
Interest cost	258		322
Expected return on plan assets	(627)		(629)
Recognized actuarial loss	155		120
Net periodic benefit credit	$	(185)	$	(160)
Settlement loss	2		—
Total credit	$	(183)	$	(160)

Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2021		2020
Compensation and benefits expense	$	9	$	10
Other net benefit credit	(69)		(60)
Total credit	$	(60)	$	(50)

Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2021		2020
Compensation and benefits expense	$	29	$	27
Other net benefit credit	(212)		(187)
Total credit	$	(183)	$	(160)

U.S. Plans only	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2021		2020
Interest cost	$	47	$	53
Expected return on plan assets	(82)		(86)
Recognized actuarial loss	22		18
Net periodic benefit credit	$	(13)	$	(15)

U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2021		2020
Interest cost	$	139	$	160
Expected return on plan assets	(245)		(259)
Recognized actuarial loss	67		54
Net periodic benefit credit	$	(39)	$	(45)

Significant non-U.S. Plans only	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2021		2020
Service cost	$	9	$	10
Interest cost	40		59
Expected return on plan assets	(126)		(126)
Recognized actuarial loss	30		22
Total credit	$	(47)	$	(35)

Significant non-U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2021		2020
Service cost	$	29	$	27
Interest cost	119		162
Expected return on plan assets	(382)		(370)
Recognized actuarial loss	88		66
Net periodic benefit credit	$	(146)	$	(115)
Settlement loss	2		—
Total credit	$	(144)	$	(115)

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
September 30,	2021		2020
Weighted average assumptions:
Expected return on plan assets	4.72	%	5.31	%
Discount rate	1.92	%	2.57	%
Rate of compensation increase	1.85	%	1.76	%

The Company made approximately $90 million of contributions to its U.S. and non-U.S. defined benefit pension plans for the nine months ended September 30, 2021. The Company expects to contribute approximately $39 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 $115 million and $110 million for the nine months ended September 30, 2021 and 2020, respectively. The cost of the U.K. DC Plans was $106 million and $94 million for the nine months ended September 30, 2021 and 2020, respectively.