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Pension and Other Postretirement Benefit Plans | 12 Months Ended
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Dec. 31, 2018
Retirement Benefits [Abstract] |
Pension and Other Postretirement Benefit Plans | Pension and Other Postretirement Benefit Plans The Company has defined benefit pension plans covering eligible employees in the United States and in certain of its international subsidiaries. In addition, the Company provides medical benefits, principally to its eligible U.S. retirees and their dependents, through its other postretirement benefit plans. The Company uses December 31 as the year-end measurement date for all of its pension plans and other postretirement benefit plans. Net Periodic Benefit Cost The net periodic benefit cost (credit) for pension and other postretirement benefit plans consisted of the following components:
| Pension Benefits |  |  |  |  |  |
| U.S. |  | International |  | Other Postretirement Benefits
Years Ended December 31 | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
Service cost | $ | 326 |  |  | $ | 312 |  |  | $ | 282 |  |  | $ | 238 |  |  | $ | 252 |  |  | $ | 238 |  |  | $ | 57 |  |  | $ | 57 |  |  | $ | 54 |
Interest cost | 432 |  |  | 454 |  |  | 456 |  |  | 178 |  |  | 172 |  |  | 204 |  |  | 69 |  |  | 81 |  |  | 82 |
Expected return on plan assets | (851 | ) |  | (862 | ) |  | (831 | ) |  | (431 | ) |  | (393 | ) |  | (382 | ) |  | (83 | ) |  | (78 | ) |  | (107 | )
Amortization of unrecognized prior service cost | (50 | ) |  | (53 | ) |  | (55 | ) |  | (13 | ) |  | (11 | ) |  | (11 | ) |  | (84 | ) |  | (98 | ) |  | (106 | )
Net loss amortization | 232 |  |  | 180 |  |  | 119 |  |  | 84 |  |  | 98 |  |  | 87 |  |  | 1 |  |  | 1 |  |  | 3 |
Termination benefits | 19 |  |  | 44 |  |  | 23 |  |  | 2 |  |  | 4 |  |  | 4 |  |  | 3 |  |  | 8 |  |  | 4 |
Curtailments | 10 |  |  | 3 |  |  | 5 |  |  | 1 |  |  | (4 | ) |  | (1 | ) |  | (8 | ) |  | (31 | ) |  | (18 | )
Settlements | 5 |  |  | — |  |  | — |  |  | 13 |  |  | 5 |  |  | 6 |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost (credit) | $ | 123 |  |  | $ | 78 |  |  | $ | (1 | ) |  | $ | 72 |  |  | $ | 123 |  |  | $ | 145 |  |  | $ | (45 | ) |  | $ | (60 | ) |  | $ | (88 | )
The changes in net periodic benefit cost (credit) year over year for pension plans are largely attributable to changes in the discount rate affecting net loss amortization. In connection with restructuring actions (see Note 5), termination charges were recorded in 2018, 2017 and 2016 on pension and other postretirement benefit plans related to expanded eligibility for certain employees exiting Merck. Also, in connection with these restructuring activities, curtailments were recorded on pension and other postretirement benefit plans and settlements were recorded on certain U.S. and international pension plans as reflected in the table above. The components of net periodic benefit cost (credit) other than the service cost component are included in Other (income) expense, net (see Note 15), with the exception of certain amounts for termination benefits, curtailments and settlements, which are recorded in Restructuring costs if the event giving rise to the termination benefits, curtailment or settlement is related to restructuring actions as noted above. Obligations and Funded Status Summarized information about the changes in plan assets and benefit obligations, the funded status and the amounts recorded at December 31 is as follows:
| Pension Benefits |  | Other Postretirement Benefits
| U.S. |  | International |
| 2018 |  | 2017 |  | 2018 |  | 2017 |  | 2018 |  | 2017
Fair value of plan assets January 1 | $ | 10,896 |  |  | $ | 9,766 |  |  | $ | 9,339 |  |  | $ | 7,794 |  |  | $ | 1,114 |  |  | $ | 1,019 |
Actual return on plan assets | (810 | ) |  | 1,723 |  |  | (289 | ) |  | 677 |  |  | (72 | ) |  | 161 |
Company contributions, net | 378 |  |  | 58 |  |  | 167 |  |  | 226 |  |  | 6 |  |  | (4 | )
Effects of exchange rate changes | — |  |  | — |  |  | (352 | ) |  | 843 |  |  | — |  |  | — |
Benefits paid | (772 | ) |  | (651 | ) |  | (202 | ) |  | (198 | ) |  | (80 | ) |  | (62 | )
Settlements | (44 | ) |  | — |  |  | (106 | ) |  | (17 | ) |  | — |  |  | — |
Other | — |  |  | — |  |  | 23 |  |  | 14 |  |  | — |  |  | — |
Fair value of plan assets December 31 | $ | 9,648 |  |  | $ | 10,896 |  |  | $ | 8,580 |  |  | $ | 9,339 |  |  | $ | 968 |  |  | $ | 1,114 |
Benefit obligation January 1 | $ | 11,904 |  |  | $ | 10,849 |  |  | $ | 9,483 |  |  | $ | 8,372 |  |  | $ | 1,922 |  |  | $ | 1,922 |
Service cost | 326 |  |  | 312 |  |  | 238 |  |  | 252 |  |  | 57 |  |  | 57 |
Interest cost | 432 |  |  | 454 |  |  | 178 |  |  | 172 |  |  | 69 |  |  | 81 |
Actuarial (gains) losses (1) | (1,258 | ) |  | 881 |  |  | (154 | ) |  | (7 | ) |  | (341 | ) |  | (87 | )
Benefits paid | (772 | ) |  | (651 | ) |  | (202 | ) |  | (198 | ) |  | (80 | ) |  | (62 | )
Effects of exchange rate changes | — |  |  | — |  |  | (387 | ) |  | 916 |  |  | (6 | ) |  | 3 |
Plan amendments | — |  |  | — |  |  | 10 |  |  | (22 | ) |  | (9 | ) |  | — |
Curtailments | 13 |  |  | 15 |  |  | (2 | ) |  | (3 | ) |  | — |  |  | — |
Termination benefits | 19 |  |  | 44 |  |  | 2 |  |  | 4 |  |  | 3 |  |  | 8 |
Settlements | (44 | ) |  | — |  |  | (106 | ) |  | (17 | ) |  | — |  |  | — |
Other | — |  |  | — |  |  | 23 |  |  | 14 |  |  | — |  |  | — |
Benefit obligation December 31 | $ | 10,620 |  |  | $ | 11,904 |  |  | $ | 9,083 |  |  | $ | 9,483 |  |  | $ | 1,615 |  |  | $ | 1,922 |
Funded status December 31 | $ | (972 | ) |  | $ | (1,008 | ) |  | $ | (503 | ) |  | $ | (144 | ) |  | $ | (647 | ) |  | $ | (808 | )
Recognized as: |  |  |  |  |  |  |  |  |  |  |
Other assets | $ | — |  |  | $ | — |  |  | $ | 659 |  |  | $ | 828 |  |  | $ | — |  |  | $ | — |
Accrued and other current liabilities | (47 | ) |  | (59 | ) |  | (14 | ) |  | (17 | ) |  | (10 | ) |  | (11 | )
Other noncurrent liabilities | (925 | ) |  | (949 | ) |  | (1,148 | ) |  | (955 | ) |  | (637 | ) |  | (797 | )
(1) Actuarial (gains) losses in 2018 and 2017 primarily reflect changes in discount rates. At December 31, 2018 and 2017, the accumulated benefit obligation was $19.0 billion and $20.5 billion, respectively, for all pension plans, of which $10.4 billion and $11.5 billion, respectively, related to U.S. pension plans. Information related to the funded status of selected pension plans at December 31 is as follows:
| U.S. |  | International
| 2018 |  | 2017 |  | 2018 |  | 2017
Pension plans with a projected benefit obligation in excess of plan assets |  |  |  |  |  |  |
Projected benefit obligation | $ | 10,620 |  |  | $ | 11,904 |  |  | $ | 6,251 |  |  | $ | 3,323 |
Fair value of plan assets | 9,648 |  |  | 10,896 |  |  | 5,089 |  |  | 2,352 |
Pension plans with an accumulated benefit obligation in excess of plan assets |  |  |  |  |  |  |
Accumulated benefit obligation | $ | 9,702 |  |  | $ | 676 |  |  | $ | 5,936 |  |  | $ | 2,120 |
Fair value of plan assets | 8,966 |  |  | — |  |  | 5,071 |  |  | 1,346 |
Plan Assets Entities are required to use a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity. The Level 3 assets are those whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques with significant unobservable inputs, as well as instruments for which the determination of fair value requires significant judgment or estimation. At December 31, 2018 and 2017, $826 million and $488 million, respectively, or approximately 5% and 2%, respectively, of the Company’s pension investments were categorized as Level 3 assets. If the inputs used to measure the financial assets fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The fair values of the Company’s pension plan assets at December 31 by asset category are as follows:
| Fair Value Measurements Using |  | Fair Value Measurements Using
| Quoted Prices In Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total |  | Quoted Prices In Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
| 2018 |  |  |  | 2017 |  |
U.S. Pension Plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 40 |  |  | $ | — |  |  | $ | — |  |  | $ | 40 |  |  | $ | 6 |  |  | $ | — |  |  | $ | — |  |  | $ | 6 |
Investment funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Developed markets equities | 169 |  |  | — |  |  | — |  |  | 169 |  |  | 390 |  |  | — |  |  | — |  |  | 390 |
Emerging markets equities | 121 |  |  | — |  |  | — |  |  | 121 |  |  | 138 |  |  | — |  |  | — |  |  | 138 |
Equity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Developed markets | 2,172 |  |  | — |  |  | — |  |  | 2,172 |  |  | 2,743 |  |  | — |  |  | — |  |  | 2,743 |
Fixed income securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency obligations | — |  |  | 1,509 |  |  | — |  |  | 1,509 |  |  | — |  |  | 757 |  |  | — |  |  | 757 |
Corporate obligations | — |  |  | 1,246 |  |  | — |  |  | 1,246 |  |  | — |  |  | 900 |  |  | — |  |  | 900 |
Mortgage and asset-backed securities | — |  |  | 262 |  |  | — |  |  | 262 |  |  | — |  |  | 240 |  |  | — |  |  | 240 |
Other investments | — |  |  | — |  |  | 13 |  |  | 13 |  |  | — |  |  | — |  |  | 15 |  |  | 15 |
Net assets in fair value hierarchy | $ | 2,502 |  |  | $ | 3,017 |  |  | $ | 13 |  |  | $ | 5,532 |  |  | $ | 3,277 |  |  | $ | 1,897 |  |  | $ | 15 |  |  | $ | 5,189 |
Investments measured at NAV (1) |  |  |  |  |  |  | 4,116 |  |  |  |  |  |  |  |  | 5,707 |
Plan assets at fair value |  |  |  |  |  |  | $ | 9,648 |  |  |  |  |  |  |  |  | $ | 10,896 |
International Pension Plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 50 |  |  | $ | 3 |  |  | $ | — |  |  | $ | 53 |  |  | $ | 54 |  |  | $ | 19 |  |  | $ | — |  |  | $ | 73 |
Investment funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Developed markets equities | 461 |  |  | 3,071 |  |  | — |  |  | 3,532 |  |  | 562 |  |  | 3,326 |  |  | — |  |  | 3,888 |
Emerging markets equities | 56 |  |  | 112 |  |  | — |  |  | 168 |  |  | 62 |  |  | 176 |  |  | — |  |  | 238 |
Government and agency obligations | 372 |  |  | 2,082 |  |  | — |  |  | 2,454 |  |  | 249 |  |  | 2,095 |  |  | — |  |  | 2,344 |
Corporate obligations | 4 |  |  | 7 |  |  | — |  |  | 11 |  |  | 5 |  |  | 329 |  |  | — |  |  | 334 |
Fixed income obligations | 7 |  |  | 4 |  |  | — |  |  | 11 |  |  | 7 |  |  | 4 |  |  | — |  |  | 11 |
Real estate (2) | — |  |  | 1 |  |  | 1 |  |  | 2 |  |  | — |  |  | 1 |  |  | 2 |  |  | 3 |
Equity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Developed markets | 544 |  |  | — |  |  | — |  |  | 544 |  |  | 660 |  |  | — |  |  | — |  |  | 660 |
Fixed income securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency obligations | 2 |  |  | 291 |  |  | — |  |  | 293 |  |  | 2 |  |  | 266 |  |  | — |  |  | 268 |
Corporate obligations | 1 |  |  | 113 |  |  | — |  |  | 114 |  |  | 1 |  |  | 118 |  |  | — |  |  | 119 |
Mortgage and asset-backed securities | — |  |  | 55 |  |  | — |  |  | 55 |  |  | — |  |  | 55 |  |  | — |  |  | 55 |
Other investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance contracts (3) | — |  |  | 66 |  |  | 811 |  |  | 877 |  |  | — |  |  | 67 |  |  | 470 |  |  | 537 |
Other | — |  |  | 4 |  |  | 1 |  |  | 5 |  |  | — |  |  | 6 |  |  | 1 |  |  | 7 |
Net assets in fair value hierarchy | $ | 1,497 |  |  | $ | 5,809 |  |  | $ | 813 |  |  | $ | 8,119 |  |  | $ | 1,602 |  |  | $ | 6,462 |  |  | $ | 473 |  |  | $ | 8,537 |
Investments measured at NAV (1) |  |  |  |  |  |  | 461 |  |  |  |  |  |  |  |  | 802 |
Plan assets at fair value |  |  |  |  |  |  | $ | 8,580 |  |  |  |  |  |  |  |  | $ | 9,339 |
(1) | Certain investments that were measured at net asset value (NAV) per share or its equivalent as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of plan assets at December 31, 2018 and 2017.
(2) | The plans’ Level 3 investments in real estate funds are generally valued by market appraisals of the underlying investments in the funds.
(3) | The plans’ Level 3 investments in insurance contracts are generally valued using a crediting rate that approximates market returns and invest in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques.
The table below provides a summary of the changes in fair value, including transfers in and/or out, of all financial assets measured at fair value using significant unobservable inputs (Level 3) for the Company’s pension plan assets:
| 2018 |  | 2017
| Insurance Contracts |  | Real Estate |  | Other |  | Total |  | Insurance Contracts |  | Real Estate |  | Other |  | Total
U.S. Pension Plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance January 1 | $ | — |  |  | $ | — |  |  | $ | 15 |  |  | $ | 15 |  |  | $ | — |  |  | $ | — |  |  | $ | 18 |  |  | $ | 18 |
Actual return on plan assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Relating to assets still held at December 31 | — |  |  | — |  |  | (3 | ) |  | (3 | ) |  | — |  |  | — |  |  | (2 | ) |  | (2 | )
Relating to assets sold during the year | — |  |  | — |  |  | 4 |  |  | 4 |  |  | — |  |  | — |  |  | 4 |  |  | 4 |
Purchases and sales, net | — |  |  | — |  |  | (3 | ) |  | (3 | ) |  | — |  |  | — |  |  | (5 | ) |  | (5 | )
Balance December 31 | $ | — |  |  | $ | — |  |  | $ | 13 |  |  | $ | 13 |  |  | $ | — |  |  | $ | — |  |  | $ | 15 |  |  | $ | 15 |
International Pension Plans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance January 1 | $ | 470 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 473 |  |  | $ | 412 |  |  | $ | 4 |  |  | $ | 1 |  |  | $ | 417 |
Actual return on plan assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Relating to assets still held at December 31 | (32 | ) |  | — |  |  | — |  |  | (32 | ) |  | 52 |  |  | — |  |  | — |  |  | 52 |
Purchases and sales, net | 380 |  |  | (1 | ) |  | — |  |  | 379 |  |  | 5 |  |  | (2 | ) |  | — |  |  | 3 |
Transfers into Level 3 | (7 | ) |  | — |  |  | — |  |  | (7 | ) |  | 1 |  |  | — |  |  | — |  |  | 1 |
Balance December 31 | $ | 811 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 813 |  |  | $ | 470 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 473 |
The fair values of the Company’s other postretirement benefit plan assets at December 31 by asset category are as follows:
| Fair Value Measurements Using |  | Fair Value Measurements Using
| Quoted Prices In Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total |  | Quoted Prices In Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
| 2018 |  |  |  | 2017 |  |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 78 |  |  | $ | — |  |  | $ | — |  |  | $ | 78 |  |  | $ | 97 |  |  | $ | — |  |  | $ | — |  |  | $ | 97 |
Investment funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Developed markets equities | 16 |  |  | — |  |  | — |  |  | 16 |  |  | 37 |  |  | — |  |  | — |  |  | 37 |
Emerging markets equities | 12 |  |  | — |  |  | — |  |  | 12 |  |  | 13 |  |  | — |  |  | — |  |  | 13 |
Government and agency obligations | 1 |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | 1 |
Equity securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Developed markets | 200 |  |  | — |  |  | — |  |  | 200 |  |  | 256 |  |  | — |  |  | — |  |  | 256 |
Fixed income securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency obligations | — |  |  | 141 |  |  | — |  |  | 141 |  |  | — |  |  | 71 |  |  | — |  |  | 71 |
Corporate obligations | — |  |  | 116 |  |  | — |  |  | 116 |  |  | — |  |  | 84 |  |  | — |  |  | 84 |
Mortgage and asset-backed securities | — |  |  | 24 |  |  | — |  |  | 24 |  |  | — |  |  | 23 |  |  | — |  |  | 23 |
Net assets in fair value hierarchy | $ | 307 |  |  | $ | 281 |  |  | $ | — |  |  | $ | 588 |  |  | $ | 404 |  |  | $ | 178 |  |  | $ | — |  |  | $ | 582 |
Investments measured at NAV (1) |  |  |  |  |  |  | 380 |  |  |  |  |  |  |  |  | 532 |
Plan assets at fair value |  |  |  |  |  |  | $ | 968 |  |  |  |  |  |  |  |  | $ | 1,114 |
(1) | Certain investments that were measured at net asset value (NAV) per share or its equivalent as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of plan assets at December 31, 2018 and 2017.
The Company has established investment guidelines for its U.S. pension and other postretirement plans to create an asset allocation that is expected to deliver a rate of return sufficient to meet the long-term obligation of each plan, given an acceptable level of risk. The target investment portfolio of the Company’s U.S. pension and other postretirement benefit plans is allocated 30% to 50% in U.S. equities, 15% to 30% in international equities, 30% to 45% in fixed-income investments, and up to 5% in cash and other investments. The portfolio’s equity weighting is consistent with the long-term nature of the plans’ benefit obligations. The expected annual standard deviation of returns of the target portfolio, which approximates 11%, reflects both the equity allocation and the diversification benefits among the asset classes in which the portfolio invests. For international pension plans, the targeted investment portfolio varies based on the duration of pension liabilities and local government rules and regulations. Although a significant percentage of plan assets are invested in U.S. equities, concentration risk is mitigated through the use of strategies that are diversified within management guidelines. Expected Contributions Expected contributions during 2019 are approximately $50 million for U.S. pension plans, approximately $150 million for international pension plans and approximately $15 million for other postretirement benefit plans. Expected Benefit Payments Expected benefit payments are as follows:
| U.S. Pension Benefits |  | International Pension Benefits |  | Other Postretirement Benefits
2019 | $ | 638 |  |  | $ | 225 |  |  | $ | 91 |
2020 | 661 |  |  | 213 |  |  | 95 |
2021 | 680 |  |  | 221 |  |  | 98 |
2022 | 685 |  |  | 239 |  |  | 102 |
2023 | 709 |  |  | 249 |  |  | 105 |
2024 — 2028 | 3,805 |  |  | 1,349 |  |  | 577 |
Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service. Amounts Recognized in Other Comprehensive Income Net loss amounts reflect experience differentials primarily relating to differences between expected and actual returns on plan assets as well as the effects of changes in actuarial assumptions. Net loss amounts in excess of certain thresholds are amortized into net periodic benefit cost over the average remaining service life of employees. The following amounts were reflected as components of OCI:
| Pension Plans |  | Other Postretirement Benefit Plans
| U.S. |  | International |
Years Ended December 31 | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
Net (loss) gain arising during the period | $ | (397 | ) |  | $ | (19 | ) |  | $ | (743 | ) |  | $ | (505 | ) |  | $ | 309 |  |  | $ | (380 | ) |  | $ | 186 |  |  | $ | 170 |  |  | $ | (45 | )
Prior service (cost) credit arising during the period | (4 | ) |  | (13 | ) |  | (10 | ) |  | (10 | ) |  | 22 |  |  | (2 | ) |  | 2 |  |  | (31 | ) |  | (19 | )
| $ | (401 | ) |  | $ | (32 | ) |  | $ | (753 | ) |  | $ | (515 | ) |  | $ | 331 |  |  | $ | (382 | ) |  | $ | 188 |  |  | $ | 139 |  |  | $ | (64 | )
Net loss amortization included in benefit cost | $ | 232 |  |  | $ | 180 |  |  | $ | 119 |  |  | $ | 84 |  |  | $ | 98 |  |  | $ | 87 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 3 |
Prior service (credit) cost amortization included in benefit cost | (50 | ) |  | (53 | ) |  | (55 | ) |  | (13 | ) |  | (11 | ) |  | (11 | ) |  | (84 | ) |  | (98 | ) |  | (106 | )
| $ | 182 |  |  | $ | 127 |  |  | $ | 64 |  |  | $ | 71 |  |  | $ | 87 |  |  | $ | 76 |  |  | $ | (83 | ) |  | $ | (97 | ) |  | $ | (103 | )
The estimated net loss (gain) and prior service cost (credit) amounts that will be amortized from AOCI into net periodic benefit cost during 2019 are $204 million and $(62) million, respectively, for pension plans (of which $141 million and $(50) million, respectively, relates to U.S. pension plans) and $(7) million and $(78) million, respectively, for other postretirement benefit plans. Actuarial Assumptions The Company reassesses its benefit plan assumptions on a regular basis. The weighted average assumptions used in determining U.S. pension and other postretirement benefit plan and international pension plan information are as follows:
| U.S. Pension and Other Postretirement Benefit Plans |  | International Pension Plans
December 31 | 2018 |  |  | 2017 |  |  | 2016 |  |  | 2018 |  |  | 2017 |  |  | 2016 |
Net periodic benefit cost |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.70 | % |  | 4.30 | % |  | 4.70 | % |  | 2.10 | % |  | 2.20 | % |  | 2.80 | %
Expected rate of return on plan assets | 8.20 | % |  | 8.70 | % |  | 8.60 | % |  | 5.10 | % |  | 5.10 | % |  | 5.60 | %
Salary growth rate | 4.30 | % |  | 4.30 | % |  | 4.30 | % |  | 2.90 | % |  | 2.90 | % |  | 2.90 | %
Benefit obligation |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.40 | % |  | 3.70 | % |  | 4.30 | % |  | 2.20 | % |  | 2.10 | % |  | 2.20 | %
Salary growth rate | 4.30 | % |  | 4.30 | % |  | 4.30 | % |  | 2.80 | % |  | 2.90 | % |  | 2.90 | %
For both the pension and other postretirement benefit plans, the discount rate is evaluated on measurement dates and modified to reflect the prevailing market rate of a portfolio of high-quality fixed-income debt instruments that would provide the future cash flows needed to pay the benefits included in the benefit obligation as they come due. The expected rate of return for both the pension and other postretirement benefit plans represents the average rate of return to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid and is determined on a plan basis. The expected rate of return within each plan is developed considering long-term historical returns data, current market conditions, and actual returns on the plan assets. Using this reference information, the long-term return expectations for each asset category and a weighted average expected return for each plan’s target portfolio is developed, according to the allocation among those investment categories. The expected portfolio performance reflects the contribution of active management as appropriate. For 2019, the expected rate of return for the Company’s U.S. pension and other postretirement benefit plans will range from 7.70% to 8.10%, as compared to a range of 7.70% to 8.30% in 2018. The decrease is primarily due to a modest shift in asset allocation. The change in the weighted-average expected return on U.S. pension and other postretirement benefit plan assets from 2016 to 2018 is due to the relative weighting of the referenced plans’ assets. The health care cost trend rate assumptions for other postretirement benefit plans are as follows:
December 31 | 2018 |  | 2017
Health care cost trend rate assumed for next year | 7.0 | % |  | 7.2 | %
Rate to which the cost trend rate is assumed to decline | 4.5 | % |  | 4.5 | %
Year that the trend rate reaches the ultimate trend rate | 2032 |  |  | 2032 |
A one percentage point change in the health care cost trend rate would have had the following effects:
| One Percentage Point
| Increase |  | Decrease
Effect on total service and interest cost components | $ | 11 |  |  | $ | (9 | )
Effect on benefit obligation | 88 |  |  | (74 | )
Savings Plans The Company also maintains defined contribution savings plans in the United States. The Company matches a percentage of each employee’s contributions consistent with the provisions of the plan for which the employee is eligible. Total employer contributions to these plans in 2018, 2017 and 2016 were $136 million, $131 million and $126 million, respectively.

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