Retirement Benefits

9 Months Ended

Sep. 30, 2022

Retirement Benefits [Abstract]

Retirement Benefits

Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for 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 by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans.

The target asset allocation for the U.S. plans is 60% equities and equity alternatives and 40% fixed income. At September 30, 2022, the actual allocation for the U.S. plans was 61% equities and equity alternatives and 39% fixed income. The target allocation for the U.K. plans at September 30, 2022 is 14% equities and equity alternatives and 86% fixed income. At September 30, 2022, the actual allocation for the U.K. plans was 17% equities and equity alternatives and 83% 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 net benefit cost or credit of the Company's defined benefit plans is measured on an actuarial basis using various methods and assumptions. The components of the net benefit credit 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)	2022		2021
Service cost	$	6	$	9
Interest cost	95		87
Expected return on plan assets	(191)		(208)
Recognized actuarial loss	38		52
Net benefit credit	$	(52)	$	(60)
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2022		2021
Service cost	$	21	$	29
Interest cost	294		258
Expected return on plan assets	(590)		(627)
Recognized actuarial loss	114		155
Net periodic benefit credit	$	(161)	$	(185)
Settlement loss	2		2
Net benefit credit	$	(159)	$	(183)

Amounts Recorded in the Consolidated Statements of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2022		2021
Compensation and benefits expense	$	6	$	9
Other net benefit credit	(58)		(69)
Net benefit credit	$	(52)	$	(60)

Amounts Recorded in the Consolidated Statements of Income
Combined U.S. and significant non-U.S. Plans	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2022		2021
Compensation and benefits expense	$	21	$	29
Other net benefit credit	(180)		(212)
Net benefit credit	$	(159)	$	(183)

U.S. Plans only	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2022		2021
Interest cost	$	48	$	47
Expected return on plan assets	(85)		(82)
Recognized actuarial loss	19		22
Net benefit credit	$	(18)	$	(13)

U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2022		2021
Interest cost	$	145	$	139
Expected return on plan assets	(253)		(245)
Recognized actuarial loss	56		67
Net benefit credit	$	(52)	$	(39)

Significant non-U.S. Plans only	Pension Benefits
For the Three Months Ended September 30,
(In millions)	2022		2021
Service cost	$	6	$	9
Interest cost	47		40
Expected return on plan assets	(106)		(126)
Recognized actuarial loss	19		30
Net benefit credit	$	(34)	$	(47)

Significant non-U.S. Plans only	Pension Benefits
For the Nine Months Ended September 30,
(In millions)	2022		2021
Service cost	$	21	$	29
Interest cost	149		119
Expected return on plan assets	(337)		(382)
Recognized actuarial loss	58		88
Net periodic benefit credit	$	(109)	$	(146)
Settlement loss	2		2
Net benefit credit	$	(107)	$	(144)

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,	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 contributions to its U.S. and non-U.S. defined benefit pension plans for the three and nine months ended September 30, 2022 of approximately $28 million and $141 million, respectively, compared to contributions of $33 million and $90 million for the corresponding periods in the prior year. The Company expects to contribute approximately $28 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 for the three and nine months ended September 30, 2022 was $39 million and $122 million, respectively, and $37 million and $115 million for the corresponding periods in the prior year. The cost of the U.K. DC Plans for the three and nine months ended September 30, 2022, was $31 million and $108 million, respectively, and $33 million and $106 million for the corresponding periods in the prior year.