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Pension plans | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Pension plans | (24) Pension plans Certain Berkshire subsidiaries sponsor defined benefit pension plans. Plan benefits are generally based on years of service and compensation or fixed benefit rates. Plan sponsors may make contributions to the plans to meet regulatory requirements or may make discretionary contributions. Benefits under qualified U.S. and certain non-U.S. defined benefit pension plans are funded with assets held in trusts. Certain other non-qualified retirement plans are unfunded. Our net periodic pension expense for each of the three years ending December 31, 2024 was as follows (in millions).
|  | 2024 |  |  | 2023 |  |  | 2022 |
Service cost |  | $ | 107 |  |  | $ | 111 |  |  | $ | 181 |
Interest cost |  |  | 617 |  |  |  | 640 |  |  |  | 482 |
Expected return on plan assets |  |  | (818 | ) |  |  | (785 | ) |  |  | (975 | )
Other |  |  | 41 |  |  |  | 2 |  |  |  | 156 |
Net periodic pension expense |  | $ | (53 | ) |  | $ | (32 | ) |  | $ | (156 | )
The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits earned based on service and compensation prior to the valuation date. The ABO was $11.2 billion at December 31, 2024 and $12.3 billion at December 31, 2023. The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon service and compensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation levels. Reconciliations of the changes in plan assets and PBOs for each of the two years ending December 31, 2024 and the asset and liability balances reflected in the Consolidated Balance Sheets at year end 2024 and 2023 follow (in millions).
|  | 2024 |  |  | 2023 |
Plan assets |  |  |  |  |  |
Balance at the beginning of the year |  | $ | 13,379 |  |  | $ | 12,592 |
Employer contributions |  |  | 111 |  |  |  | 145 |
Benefits paid |  |  | (810 | ) |  |  | (852 | )
Settlements paid |  |  | (354 | ) |  |  | (448 | )
Actual return on plan assets |  |  | 1,909 |  |  |  | 1,783 |
Other |  |  | (55 | ) |  |  | 159 |
Balance at the end of the year |  | $ | 14,180 |  |  | $ | 13,379 |
Projected benefit obligations |  |  |  |  |  |
Balance at the beginning of the year |  | $ | 12,767 |  |  | $ | 12,738 |
Service cost |  |  | 107 |  |  |  | 111 |
Interest cost |  |  | 617 |  |  |  | 640 |
Benefits paid |  |  | (810 | ) |  |  | (852 | )
Settlements paid |  |  | (354 | ) |  |  | (448 | )
Actuarial (gains) losses and other |  |  | (607 | ) |  |  | 578 |
Balance at the end of the year |  | $ | 11,720 |  |  | $ | 12,767 |
Net funded status - asset (liability) |  | $ | 2,460 |  |  | $ | 612 |
Balances included in other assets |  | $ | 3,490 |  |  | $ | 1,823 |
Balances included in accounts payable and other liabilities |  | $ | 1,030 |  |  | $ | 1,211 |
Liabilities include benefit obligations of unfunded plans of $1.0 billion at December 31, 2024 and 2023, respectively. Notes to Consolidated Financial Statements (24) Pension plans Weighted average assumptions used in determining PBOs and net periodic pension expense follow.
| 2024 |  | 2023 |  | 2022 |
Discount rate applicable to PBOs |  | 5.5 | % |  | 5.0 | % |  | 5.2 | %
Expected long-term rate of return on plan assets |  | 5.9 |  |  | 6.0 |  | 5.9 |
Rate of compensation increase | 2.6 |  | 2.6 |  | 2.5 |
Discount rate applicable to net periodic pension expense |  | 5.1 |  |  | 5.3 |  |  | 2.9 |
Expected benefit payments over the next ten years are (in millions): 2025 – $893; 2026 – $873; 2027 – $875; 2028 – $884; 2029 – $883; and 2030 through 2034 – $4,379. Our subsidiaries expect to make contributions of $114 million to the pension plans in 2025. Fair value measurements of plan assets as of December 31, 2024 and 2023 follow (in millions).
|  | Fair Value |  |  | Investments carried at net |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | asset value |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 600 |  |  | $ | 556 |  |  | $ | 44 |  |  | $ | — |  |  | $ | — |
Equity securities |  |  | 9,757 |  |  |  | 9,036 |  |  |  | 581 |  |  |  | 140 |  |  |  | — |
Fixed maturity securities |  |  | 1,747 |  |  |  | 953 |  |  |  | 794 |  |  |  | — |  |  |  | — |
Investment funds and other |  |  | 2,076 |  |  |  | 385 |  |  |  | 144 |  |  |  | 23 |  |  |  | 1,524 |
|  | $ | 14,180 |  |  | $ | 10,930 |  |  | $ | 1,563 |  |  | $ | 163 |  |  | $ | 1,524 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 449 |  |  | $ | 370 |  |  | $ | 79 |  |  | $ | — |  |  | $ | — |
Equity securities |  |  | 8,487 |  |  |  | 7,808 |  |  |  | 543 |  |  |  | 136 |  |  |  | — |
Fixed maturity securities |  |  | 2,138 |  |  |  | 1,277 |  |  |  | 851 |  |  |  | 10 |  |  |  | — |
Investment funds and other |  |  | 2,305 |  |  |  | 342 |  |  |  | 272 |  |  |  | 42 |  |  |  | 1,649 |
|  | $ | 13,379 |  |  | $ | 9,797 |  |  | $ | 1,745 |  |  | $ | 188 |  |  | $ | 1,649 |
Plan assets are generally invested with the long-term objective of producing earnings to adequately cover expected benefit obligations. The expected rates of return on plan assets reflect subjective assessments of expected long-term investment returns. Generally, past investment returns are not given significant consideration when establishing assumptions for expected long-term rates of return on plan assets. Actual experience will differ from the assumed rates of return. Notes to Consolidated Financial Statements (24) Pension plans A reconciliation of the pre-tax accumulated other comprehensive income (loss) of our defined benefit pension plans for each of the two years ending December 31, 2024 follows (in millions).
|  | 2024 |  |  | 2023 |
Balance at the beginning of the year |  | $ | (161 | ) |  | $ | (738 | )
Amount included in net periodic pension expense |  |  | 29 |  |  |  | (12 | )
Actuarial gains (losses) and other |  |  | 1,599 |  |  |  | 589 |
Balance at the end of the year |  | $ | 1,467 |  |  | $ | (161 | )
Our subsidiaries may also sponsor defined contribution retirement plans, such as 401(k) or profit-sharing plans. Employee contributions are subject to regulatory limitations and specific plan provisions. Several of these plans provide for employer matching contributions as specified in the plans and may provide for additional discretionary employer contributions. Our defined contribution plan expense was approximately $1.3 billion in 2024, $1.1 billion in 2023 and $0.8 billion in 2022.

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