Retirement Benefits

3 Months Ended

Mar. 31, 2022

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 60% equities and equity alternatives and 40% fixed income. At March 31, 2022 the actual allocation for the Company's U.S. Plan was 62% equities and equity alternatives and 38% fixed income. The target allocation for the U.K. Plans at March 31, 2022 is 22% equities and equity alternatives and 78% fixed income. At March 31, 2022, the actual allocation for the U.K. Plans was 24% equities and equity alternatives and 76% fixed income. The Company's U.K. Plans comprised approximately 81% of non-U.S. plan assets at December 31, 2021. 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 March 31,
(In millions)	2022		2021
Service cost	$	8	$	10
Interest cost	100		85
Expected return on plan assets	(202)		(208)
Recognized actuarial loss	39		52
Net periodic credit	$	(55)	$	(61)

Amounts Recorded in the Consolidated Statement of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended March 31,
(In millions)	2022		2021
Compensation and benefits expense	$	8	$	10
Other net benefit credit	(63)		(71)
Total credit	$	(55)	$	(61)

U.S. Plans only	Pension Benefits
For the Three Months Ended March 31,
(In millions)	2022		2021
Interest cost	$	48	$	46
Expected return on plan assets	(84)		(82)
Recognized actuarial loss	19		23
Net periodic credit	$	(17)	$	(13)

Significant non-U.S. Plans only	Pension Benefits
For the Three Months Ended March 31,
(In millions)	2022		2021
Service cost	$	8	$	10
Interest cost	52		39
Expected return on plan assets	(118)		(126)
Recognized actuarial loss	20		29
Net periodic credit	$	(38)	$	(48)

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
For the Three Months Ended March 31,	2022		2021
Weighted average assumptions:
Expected return on plan assets	4.56	%	4.72	%
Discount rate	2.28	%	1.92	%
Rate of compensation increase	2.16	%	1.85	%

The Company made approximately $68 million of contributions to its U.S. and non-U.S. defined benefit pension plans for the three months ended March 31, 2022. The Company expects to contribute approximately $110 million to its U.S. and non-U.S. defined benefit pension plans during the remainder of 2022.

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 $43 million and $39 million for the three months ended March 31, 2022 and 2021, respectively. The cost of the U.K. DC Plans was $44 million and $39 million for the three months ended March 31, 2022 and 2021, respectively.