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Retirement Plans and Other Benefits (Tables)

12 Months Ended

Feb. 02, 2019

Defined Benefit Plan Disclosure [Line Items]

Changes in Benefit Obligations and Plan Assets, Funded Status, and Amounts Recognized in Consolidated Balance Sheets

The following tables set forth the plans’ changes in benefit obligations and plan assets, funded status, and amounts recognized in the Consolidated Balance Sheets:


	Pension Benefits				Postretirement Benefits
	2018		2017		2018		2017
	($ in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	683	$	666	$	15	$	15
Service cost		18		17		—		—
Interest cost		29		25		—		1
Plan participants’ contributions		—		—		1		1
Actuarial (gain) / loss		(16)		25		(2)		—
Foreign currency translation adjustments		(4)		3		—		—
Plan reformation (1)		194		—		—		—
Benefits paid		(165)		(53)		(2)		(2)
Benefit obligation at end of year	$	739	$	683	$	12	$	15

Change in plan assets
Fair value of plan assets at beginning of year	$	697	$	647
Actual return on plan assets		(15)		70
Employer contributions		131		29
Foreign currency translation adjustments		(4)		4
Benefits paid		(165)		(53)
Fair value of plan assets at end of year	$	644	$	697

Funded status	$	(95)		14	$	(12)	$	(15)

Amounts recognized on the balance sheet:
Other assets	$	7	$	36	$	—	$	—
Accrued and other liabilities		(3)		(3)		(1)		(1)
Other liabilities		(99)		(19)		(11)		(14)
	$	(95)	$	14	$	(12)	$	(15)

Amounts recognized in accumulated other
comprehensive loss, pre-tax:
Net loss (gain)	$	391	$	368	$	(6)	$	(5)
Prior service cost		1		1		—		—
	$	392	$	369	$	(6)	$	(5)

(1)

In connection with the pension litigation more fully disclosed in Note 22, Legal Proceedings, the Company reformed its U.S. qualified pension plan during the second quarter of 2018 in accordance with the court’s order.

Information for Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets

Accordingly, the table below reflects both the U.S. qualified plan and the non-qualified plans for 2018, whereas the amounts presented for 2017 reflects the non-qualified plans.

Changes in Accumulated Other Comprehensive Loss (Pre-Tax)

The following tables set forth the changes in accumulated other comprehensive loss (pre-tax) at February 2, 2019:


	Pension		Postretirement
	Benefits		Benefits
	($ in millions)
Net actuarial loss (gain) at beginning of year	$	368	$	(5)
Amortization of net (loss) gain		(12)		1
Loss / (gain) arising during the year		37		(2)
Foreign currency fluctuations		(2)		—
Net actuarial loss (gain) at end of year (1)	$	391	$	(6)
Net prior service cost at end of year (2)		1		—
Total amount recognized	$	392	$	(6)

(1)

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost (income) during the next year are approximately $12 million and $(1) million related to the pension and postretirement plans, respectively.

(2)

The net prior service cost did not change during the year and is not expected to change significantly during the next year.

Assumptions Used in the Calculation of Net Benefit Cost

Assumptions used in the calculation of net benefit cost include the discount rate selected and disclosed at the end of the previous year, as well as other assumptions detailed in the table below:


	Pension Benefits						Postretirement Benefits
	2018		2017		2016		2018		2017		2016
Discount rate (1)	4.0	%	4.0	%	4.1	%	3.7	%	4.0	%	4.1	%
Rate of compensation increase	3.6	%	3.6	%	3.7	%
Expected long-term rate of return on assets	5.9	%	5.8	%	6.1	%

(1)

The U.S qualified pension plan was remeasured during the second quarter of 2018 in connection with the pension litigation more fully described in Note 22, Legal Proceedings. The discount rate used to determine the benefit obligation before the remeasurement was 3.7%.

Net Benefit Expense (Income)

The components of net benefit expense (income) are:



	Pension Benefits						Postretirement Benefits
	2018		2017		2016		2018		2017		2016

Service cost	$	18	$	17	$	16	$	—	$	—	$	—
Interest cost		29		25		26		—		1		1
Expected return on plan assets		(38)		(37)		(37)		—		—		—
Amortization of net loss (gain)		12		13		14		(1)		(2)		(2)
Net benefit expense (income)	$	21	$	18	$	19	$	(1)	$	(1)	$	(1)

Assumed Health Care Cost Trend Rates Related to Measurement of SERP Medical Plan

The following initial and ultimate cost trend rate assumptions were used to determine the benefit obligations under the SERP Medical Plan:


	Medical Trend Rate						Dental Trend Rate
	2018		2017		2016		2018		2017		2016
Initial cost trend rate	6.5	%	7.0	%	7.0	%	5.0	%	5.0	%	5.0	%
Ultimate cost trend rate	5.0	%	5.0	%	5.0	%	5.0	%	5.0	%	5.0	%
Year that the ultimate cost trend rate is reached	2025		2025		2021		2019		2018		2017

The following initial and ultimate cost trend rate assumptions were used to determine the net periodic cost under the SERP Medical Plan:


	Medical Trend Rate						Dental Trend Rate
	2018		2017		2016		2018		2017		2016
Initial cost trend rate	7.0	%	7.0	%	7.0	%	5.0	%	5.0	%	5.0	%
Ultimate cost trend rate	5.0	%	5.0	%	5.0	%	5.0	%	5.0	%	5.0	%
Year that the ultimate cost trend rate is reached	2025		2021		2021		2018		2017		2016

Effect of One Percentage-Point Change in Assumed Health Care Cost Trend Rates

A one percentage-point change in the assumed health care cost trend rates would have the following effects on the SERP Medical Plan:

Estimated Future Benefit Payments

Estimated future benefit payments for each of the next five years and the five years thereafter are as follows:


	Pension		Postretirement
	Benefits		Benefits
	($ in millions)
2019	$	140	$	1
2020		54		1
2021		53		1
2022		53		1
2023		51		—
2024-2028		238		2

U.S. Plan [Member]

Defined Benefit Plan Disclosure [Line Items]

Fair Value of Pension Plan Assets

The fair values of the Company’s U.S. pension plan assets at February 2, 2019 and February 3, 2018 were as follows:


	Level 1		Level 2		Level 3		2018 Total		2017 Total*
	($ in millions)
Cash and cash equivalents	$	—	$	3	$	—	$	3	$	4
Equity securities:
U.S. large-cap (1)		—		106		—		106		115
U.S. mid-cap (1)		—		32		—		32		34
International (2)		—		72		—		72		78
Corporate stock (3)		22		—		—		22		19
Fixed-income securities:
Long duration corporate and government bonds (4)		—		234		—		234		254
Intermediate duration corporate and government bonds (5)		—		104		—		104		113
Other types of investments:
Real estate securities (6)		—		20		—		20		21
Insurance contracts		—		—		—		—		1
Total assets at fair value	$	22	$	571	$	—	$	593	$	639

*Each category of plan assets is classified within the same level of the fair value hierarchy for 2018 and 2017.

(1)

These categories consist of various managed funds that invest primarily in common stocks, as well as other equity securities and a combination of other funds.

(2)

This category comprises three managed funds that invest primarily in international common stocks, as well as other equity securities and a combination of other funds.

(3)

This category consists of the Company’s common stock.

(4)

This category consists of various fixed-income funds that invest primarily in long-term bonds, as well as a combination of other funds, that together are designed to exceed the performance of related long-term market indices.

(5)

This category consists of two fixed-income funds that invest primarily in intermediate duration bonds, as well as a combination of other funds, that together are designed to exceed the performance of related indices.

(6)

This category consists of one fund that invests in global real estate securities.

CANADA

Defined Benefit Plan Disclosure [Line Items]

Fair Value of Pension Plan Assets

The fair values of the Company’s Canadian pension plan assets at February 2, 2019 and February 3, 2018 were as follows:


	Level 1		Level 2		Level 3		2018 Total		2017 Total*
	($ in millions)
Cash and cash equivalents	$	—	$	1	$	—	$	1	$	1
Equity securities:
Canadian and international (1)		3		—		—		3		4
Fixed-income securities:
Cash matched bonds (2)		—		47		—		47		53
Total assets at fair value	$	3	$	48	$	—	$	51	$	58

*Each category of plan assets is classified within the same level of the fair value hierarchy for 2018 and 2017.

(1)

This category comprises one mutual fund that invests primarily in a diverse portfolio of Canadian securities.

This category consists of fixed-income securities, including strips and coupons, issued or guaranteed by the Government of Canada, provinces or municipalities of Canada including their agencies and crown corporations, as well as other governmental bonds and corporate bonds.

Benefit Obligations [Member]

Defined Benefit Plan Disclosure [Line Items]

Assumptions Used in the Calculation of Net Benefit Cost

The following weighted-average assumptions were used to determine the benefit obligations under the plans:


	Pension Benefits				Postretirement Benefits
	2018		2017		2018		2017
Discount rate	4.0	%	3.7	%	4.1	%	3.7	%
Rate of compensation increase	3.6	%	3.6	%

($ in millions)

Projected benefit obligation

Accumulated benefit obligation

Fair value of plan assets