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Pension Plans, Retirement Benefits and Savings Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Pension Plans, Retirement Benefits and Savings Plans PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS
The Company sponsors a qualified non-contributory defined benefit pension plan (the qualified domestic pension plan), which covers substantially all U.S. domestic employees and provides benefits under a cash balance formula, except that certain limited groups of legacy participants are covered by a prior traditional final average pay formula.  In addition, the Company sponsors a nonqualified defined benefit pension plan which covers certain highly-compensated employees, pension plans for employees of its foreign subsidiaries, and a postretirement health and life insurance benefit plan for employees satisfying certain age and service requirements and for certain retirees.
Obligations and Funded Status
The following tables summarize the funded status, obligations and amounts recognized in the consolidated balance sheet for the Company’s benefit plans. The Company uses a December 31 measurement date for its pension and postretirement benefit plans.
(at and for the year ended December 31,  in millions)Qualified Domestic
Pension Plan		Nonqualified and Foreign
Pension Plans		Total
202420232024202320242023
Change in projected benefit obligation:
Benefit obligation at beginning of year
$3,454 $3,400 $184 $180 $3,638 $3,580 
Benefits earned111 104 5 4 116 108 
Interest cost on benefit obligation163 167 9 9 172 176 
Actuarial (gain) loss(159)123 4 1 (155)124 
Benefits paid(324)(340)(14)(13)(338)(353)
Foreign currency exchange rate change
— — (2)3 (2)3 
Benefit obligation at end of year$3,245 $3,454 $186 $184 $3,431 $3,638 
Change in plan assets:
Fair value of plan assets at beginning of year
$4,149 $3,938 $97 $95 $4,246 $4,033 
Actual return on plan assets409 551 8 (2)417 549 
Company contributions— — 12 13 12 13 
Benefits paid(324)(340)(14)(13)(338)(353)
Foreign currency exchange rate change
— — (3)4 (3)4 
Fair value of plan assets at end
 of year
4,234 4,149 100 97 4,334 4,246 
Funded status of plan at end
 of year
$989 $695 $(86)$(87)$903 $608 
Amounts recognized in the consolidated balance sheet consist of:
Accrued over-funded benefit plan assets
$989 $695 $32 $27 $1,021 $722 
Accrued under-funded benefit plan liabilities
— — (118)(114)(118)(114)
Total$989 $695 $(86)$(87)$903 $608 
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss$381 $663 $14 $13 $395 $676 
Prior service cost (benefit)— — 1 1 1 1 
Total$381 $663 $15 $14 $396 $677 
Postretirement
Benefit Plans
(at and for the year ended December 31, in millions)20242023
Change in accumulated benefit obligation:
Benefit obligation at beginning of year$92 $99 
Benefits earned— — 
Interest cost on benefit obligation4 5 
Actuarial gain(28)(6)
Benefits paid(5)(6)
Foreign currency exchange rate change(1)— 
Benefit obligation at end of year$62 $92 
Change in plan assets:
Fair value of plan assets at beginning of year$7 $8 
Actual return on plan assets— — 
Company contributions4 5 
Benefits paid(5)(6)
Fair value of plan assets at end of year6 7 
Funded status of plan at end of year$(56)$(85)
Amounts recognized in the consolidated balance sheet consist of:
Accrued under-funded benefit plan liability$(56)$(85)
Amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial gain$(110)$(91)
Prior service benefit(4)(8)
Total$(114)$(99)
The total accumulated benefit obligation for the Company’s defined benefit pension plans was $3.27 billion and $3.47 billion at December 31, 2024 and 2023, respectively. The qualified domestic pension plan accounted for $3.09 billion and $3.30 billion of the total accumulated benefit obligation at December 31, 2024 and 2023, respectively, whereas the nonqualified and foreign plans accounted for $180 million and $176 million of the total accumulated benefit obligation at December 31, 2024 and 2023, respectively.
For pension plans with a projected benefit obligation in excess of plan assets, the aggregate projected benefit obligation was $118 million and $114 million at December 31, 2024 and 2023, respectively, and the aggregate plan assets were $0 million at both December 31, 2024 and 2023. For pension plans with an accumulated benefit obligation in excess of plan assets, the aggregate accumulated benefit obligation was $112 million and $106 million at December 31, 2024 and 2023, respectively, and the aggregate plan assets were $0 million at both December 31, 2024 and 2023.  For postretirement benefit plans with an accumulated benefit obligation in excess of plan assets, the aggregate accumulated benefit obligation was $62 million and $92 million at December 31, 2024 and 2023, respectively, and the aggregate plan assets were $6 million and $7 million at December 31, 2024 and 2023, respectively.
The $159 million actuarial gain experienced in 2024 for the qualified domestic pension plan was largely driven by the increase in the assumed discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2024. The $123 million actuarial loss experienced in 2023 for the qualified domestic pension plan was largely driven by the decrease in the assumed discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2023.
The Company has discretion regarding whether to provide additional funding and when to provide such funding to its qualified domestic pension plan.  In 2024, 2023 and 2022, there were no required or voluntary contributions to the qualified domestic pension plan. There is no required contribution to the qualified domestic pension plan during 2025, and the Company has not
determined whether additional funding will be made during 2025. With respect to the Company’s foreign pension plans, there are no significant required contributions in 2025.
The following table summarizes the components of net periodic benefit cost (benefit) and other amounts recognized in other comprehensive income (loss) related to the benefit plans.
Pension PlansPostretirement Benefit
Plans
(for the year ended December 31, in millions)202420232022202420232022
Net Periodic Benefit Cost (Benefit):
Service cost$116 $108 $145 $— $— $— 
Non-service cost (benefit):
Interest cost on benefit obligation172 176 101 4 5 3 
Expected return on plan assets(298)(311)(296)— — — 
Amortization of unrecognized:
Prior service benefit— (1)(1)(3)(3)(3)
Net actuarial (gain) loss7 — 49 (9)(9)(4)
Total non-service cost (benefit)(119)(136)(147)(8)(7)(4)
Net periodic benefit cost (benefit)(3)(28)(2)(8)(7)(4)
Other Changes in Benefit Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss):
Prior service benefit— — — — — — 
Net actuarial (gain) loss(274)(114)174 (28)(6)(45)
Foreign currency exchange rate change— — (2)1 — 1 
Amortization of prior service benefit— 1 1 3 3 3 
Amortization of net actuarial gain (loss)(7)— (49)9 9 4 
Total other changes recognized in other comprehensive income (loss)(281)(113)124 (15)6 (37)
Total other changes recognized in net periodic benefit cost (benefit) and other comprehensive income (loss)$(284)$(141)$122 $(23)$(1)$(41)
The following table indicates the line items in which the respective service cost and non-service cost (benefit) are presented in the consolidated statement of income for the years ended December 31, 2024, 2023 and 2022.
 Pension PlansPostretirement Benefit
Plans
(for the year ended December 31, in millions)202420232022202420232022
Service Cost:
Net investment income$1 $— $1 $— $— $— 
Claims and claim adjustment expenses45 44 58 — — — 
General and administrative expenses70 64 86 — — — 
Total service cost116 108 145 — — — 
Non-Service Cost (Benefit):
Net investment income(1)(1)(1)— — — 
Claims and claim adjustment expenses(45)(54)(59)(3)(3)(2)
General and administrative expenses(73)(81)(87)(5)(4)(2)
Total non-service cost (benefit)(119)(136)(147)(8)(7)(4)
Net periodic benefit cost (benefit)$(3)$(28)$(2)$(8)$(7)$(4)
Assumptions
The following table summarizes assumptions used with regard to the Company’s qualified and nonqualified domestic pension plans and the domestic postretirement benefit plans.
(at and for the year ended December 31,)20242023
Assumptions used to determine benefit obligations
Discount rate:
Qualified domestic pension plan5.69 %5.02 %
Nonqualified domestic pension plan5.51 %4.94 %
Domestic postretirement benefit plan5.48 %4.88 %
Cash balance interest crediting rate4.01 %4.01 %
Future compensation increase rate4.00 %4.00 %
Assumptions used to determine net periodic benefit cost
Discount rate:
Qualified domestic pension plan:
Service cost5.10 %5.27 %
Interest cost4.91 %5.18 %
Nonqualified domestic pension plan:
Service cost4.98 %5.16 %
Interest cost4.86 %5.11 %
Domestic postretirement benefit plan:
Interest cost4.84 %5.03 %
Expected long-term rate of return on assets:
Qualified domestic pension plan7.00 %7.00 %
Domestic postretirement benefit plan4.00 %4.00 %
Assumed health care cost trend rates (1)
Following year(18.04)%(2.78)%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)4.50 %4.50 %
Year that the rate reaches the ultimate trend rate20332033
___________________________________________
(1)The 2025 assumed health care cost trend rate of (18.04)% reflects known negotiated medical premium rate changes and expected drug reimbursements to the Company’s baseline health care cost trend rate of 10.00%. After 2025, assumed health care cost trend rates are expected to increase in the subsequent year and then are expected to decrease in a linear pattern until the rate reaches the ultimate trend rate of 4.50% in 2033. The 2024 assumed health care cost trend rate of (2.78)% reflects known negotiated medical premium rate changes to the Company’s baseline health care cost trend rate of 8.00%.
The discount rate assumption used to determine the benefit obligation is based on a yield-curve approach. Under this approach, individual spot rates from the yield curve of a hypothetical portfolio of high quality fixed maturity corporate bonds (rated Aa) available at the year-end valuation date, for which the timing and amount of cash outflows correspond with the timing and amount of the estimated benefit payouts of the Company’s benefit plan, are applied to expected future benefits payments in measuring the projected benefit obligation. The discount rate assumption used to determine benefit obligations disclosed above represents the weighted average of the individual spot rates.
The discount rate assumption used to determine the net periodic benefit cost is the single weighted average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the year.
In choosing the expected long-term rate of return on plan assets, the Company selected the rate that reflected the Company’s current expectations with regard to long-term returns in the capital markets, taking into account the pension plan’s asset
allocation targets, the historical performance and current valuation of U.S. and international equities, and the level of long term interest rate and inflation expectations.
The assumptions made for the Company’s foreign pension and foreign postretirement benefit plans are not materially different from those of the Company’s qualified domestic pension plan and the domestic postretirement benefit plan.
Plan Assets
The qualified domestic pension plan assets are invested for the exclusive benefit of the plan participants and beneficiaries and are intended, over time, to satisfy the benefit obligations under the plan. Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial position. The asset mix guidelines have been established and are reviewed quarterly. These guidelines are intended to serve as tools to facilitate the investment of plan assets to maximize long-term total return and the ongoing oversight of the plan’s investment performance.  Investment risk is measured and monitored on an ongoing basis through daily and monthly investment portfolio reviews, annual liability measurements and periodic asset/liability studies.
The Company’s overall investment strategy for the qualified domestic pension plan is to achieve a mix of approximately 85% to 90% of investments for long-term growth and 10% to 15% for near-term benefit payments with a diversification of asset types, fund strategies and fund managers.  The current target allocations for plan assets are 55% to 65% equity securities and 20% to 40% fixed income securities, with the remainder allocated to short-term securities.  Equity securities primarily include investments in large, medium and small-cap companies primarily located in the United States.  Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, U.S. Treasury securities and debt securities issued by foreign governments.
Assets of the Company’s foreign pension plans are not significant.
Fair Value Measurement — Pension Plans and Other Postretirement Benefit Assets
For a discussion of the methods employed by the Company to measure the fair value of invested assets, see note 4.  The following discussion of fair value measurements applies exclusively to the Company’s pension plans and other postretirement benefit assets.
Fair value estimates for equity and bond mutual funds held by the pension plans reflect prices received from an external pricing service that are based on observable market transactions.  These estimates are primarily included in Level 1.
Short-term securities are carried at fair value which approximates cost plus accrued interest or amortized discount.  The fair value or market value of these is periodically compared to this amortized cost and is based on significant observable inputs as determined by an external pricing service.  Accordingly, the estimates of fair value for such short-term securities, other than U.S. Treasury securities and money market mutual funds, provided by an external pricing service are included in the amount disclosed in Level 2 of the hierarchy.  The estimated fair value of U.S. Treasury securities and money market mutual funds is included in the amount disclosed in Level 1 as the estimates are based on unadjusted market prices.
Fair Value Hierarchy — Pension Plans
The following tables present the level within the fair value hierarchy at which the financial assets of the Company’s pension plans are measured on a recurring basis.
(at December 31, 2024, in millions)TotalLevel 1Level 2Level 3
Invested assets:
Fixed maturities
Obligations of U.S. states, municipalities and political subdivisions$109 $— $109 $— 
Debt securities issued by foreign governments34 — 34 — 
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
8 — 8 — 
Corporate and all other bonds751 — 751 — 
Total fixed maturities902 — 902 — 
Mutual funds
Equity mutual funds1,178 1,172 6 — 
Bond mutual funds667 636 31 — 
Total mutual funds1,845 1,808 37 — 
Equity securities1,401 1,401 — — 
Other investments 1 — — 1 
Cash and short-term securities
U.S. Treasury securities108 108 — — 
Other77 62 15 — 
Total cash and short-term securities185 170 15 — 
Total$4,334 $3,379 $954 $1 
(at December 31, 2023, in millions)TotalLevel 1Level 2Level 3
Invested assets:
Fixed maturities
Obligations of U.S. states, municipalities and political subdivisions$105 $— $105 $— 
Debt securities issued by foreign governments32 — 32 — 
Mortgage-backed securities, collateralized mortgage obligations and pass-through securities
8 — 8 — 
Corporate and all other bonds776 — 776 — 
Total fixed maturities921 — 921 — 
Mutual funds
Equity mutual funds1,207 1,201 6 — 
Bond mutual funds658 655 3 — 
Total mutual funds1,865 1,856 9 — 
Equity securities1,302 1,302 — — 
Other investments 1 — — 1 
Cash and short-term securities
U.S. Treasury securities— — — — 
Other157 114 43 — 
Total cash and short-term securities157 114 43 — 
Total$4,246 $3,272 $973 $1 
Other Postretirement Benefit Plans
The Company’s overall investment strategy is to achieve a mix of approximately 35% to 65% of investments for long-term growth and 35% to 65% for near-term insurance payments with a wide diversification of asset types, fund strategies and fund managers.  The current target allocations for plan assets are 25% to 75% fixed income securities, with the remainder allocated to short-term securities.  Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities and U.S. Treasuries.
Fair Value — Other Postretirement Benefit Plans
The Company’s other postretirement benefit plans had financial assets of $6 million and $7 million at December 31, 2024 and 2023, respectively, which are measured at fair value on a recurring basis.  The assets are primarily corporate bonds, which are categorized as level 2 in the fair value hierarchy.
Estimated Future Benefit Payments
The following table presents the estimated benefits expected to be paid by the Company’s pension and postretirement benefit plans for the next ten years (reflecting estimated future employee service).
Benefits Expected to be Paid
(in millions)Pension PlansPostretirement Benefit Plans
2025$283 $5 
2026289 6 
2027295 6 
2028299 6 
2029296 6 
2030 through 2034
1,427 27 
Savings Plan
Substantially all U.S. domestic Company employees are eligible to participate in The Travelers 401(k) Savings Plan (the Savings Plan). Eligible employees can contribute to the Savings Plan, and the Company makes a matching contribution into the employee’s Savings Plan account, subject to limitations described below. In addition, when an eligible U.S. employee makes a payment toward their student loans, the Company makes a contribution of that amount into the employee’s Savings Plan account, subject to limitations described below. The total annual amount of the Company’s matching contributions, student loan repayment contributions or a combination of both is the lesser of 5% of eligible pay or $7,500, which becomes 100% vested after three years of service. All Company contributions to the Savings Plan are made in cash and invested according to the employee’s current investment elections and can be reinvested into other investment options in accordance with the terms of the Savings Plan. The Company’s non-U.S. employees and certain domestic employees participate in separate savings plans.  The total expense related to all of the savings plans was $170 million, $154 million and $139 million for the years ended December 31, 2024, 2023 and 2022, respectively.
All common shares held by the Savings Plan are considered outstanding for basic and diluted EPS computations and dividends paid on all shares are charged to retained earnings.