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Retirement Plans
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Retirement Plans RETIREMENT PLANS
Defined Contribution Plans
We provide certain employees with defined contribution plans and other types of retirement plans. A portion of our retirement plan expense under the defined contribution plans is funded with Stryker common stock. The use of Stryker common stock
represents a non-cash operating activity that is not reflected in our Consolidated Statements of Cash Flows.
202120202019
Plan expense$259 $235 $205 
Expense funded with Stryker common stock37 34 31 
Stryker common stock held by plan:
Dollar amount582 542 470 
Shares (in millions)2.2 2.2 2.2 
Value as a percentage of total plan assets10 %11 %12 %
Defined Benefit Plans
Certain of our subsidiaries have both funded and unfunded defined benefit pension plans covering some or all of their employees. Substantially all of the defined benefit pension plans have projected benefit obligations in excess of plan assets.
Discount Rate
The discount rates were selected using a hypothetical portfolio of high quality bonds on December 31 that would provide the necessary cash flows to match our projected benefit payments.
Expected Return on Plan Assets
The expected return on plan assets is determined by applying the target allocation in each asset category of plan investments to the anticipated return for each asset category based on historical and projected returns.
Components of Net Periodic Pension Cost
Net periodic benefit cost:202120202019
Service cost$(72)$(63)$(41)
Interest cost(7)(8)(12)
Expected return on plan assets11 13 12 
Amortization of prior service credit1 1 1 
Recognized actuarial loss(16)(13)(9)
Curtailment gain9 — — 
Net periodic benefit cost$(74)$(70)$(49)
Changes in assets and benefit obligations recognized in OCI:
Net actuarial gain (loss)$132 $(117)$(74)
Recognized net actuarial loss16 13 9 
Prior service credit and transition amount(1)(1)(1)
Curtailment gain(9)— — 
Total recognized in other comprehensive income (loss)$138 $(105)$(66)
Total recognized in net periodic benefit cost and OCI$64 $(175)$(115)
Weighted-average rates used to determine net periodic benefit cost:
Discount rate0.8 %1.0 %1.9 %
Expected return on plan assets2.5 %2.9 %3.5 %
Rate of compensation increase2.6 %2.9 %2.9 %
Weighted-average discount rate used to determine projected benefit obligations1.1 %0.8 %1.0 %
The actuarial gain (loss) for all pension plans was primarily related to a change in the discount rate used to measure the benefit obligations of those plans.
Investment Strategy
The investment strategy for our defined benefit pension plans is to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk tolerances.
20212020
Fair value of plan assets$543 $522 
Benefit obligations(1,036)(1,118)
Funded status$(493)$(596)
Reported as:
Current liabilities—accrued compensation$(2)$(2)
Noncurrent liabilities—other liabilities(491)(594)
Pre-tax amounts recognized in AOCI:
Unrecognized net actuarial loss(215)(354)
Unrecognized prior service credit7 8 
Total$(208)$(346)
Change in Benefit Obligations
20212020
Beginning projected benefit obligations$1,118 $869 
Service cost72 63 
Interest cost7 8 
Foreign exchange impact(70)80 
Employee contributions8 8 
Actuarial (gains) losses(71)110 
Curtailment gain(23)— 
Benefits paid(5)(20)
Ending projected benefit obligations$1,036 $1,118 
Ending accumulated benefit obligations$987 $1,056 
Change in Plan Assets
20212020
Beginning fair value of plan assets$522 $428 
Actual return17 30 
Employer contributions33 33 
Employee contributions8 8 
Foreign exchange impact(29)37 
Benefits paid(8)(14)
Ending fair value of plan assets$543 $522 
Allocation of Plan Assets
2022 Target2021 Actual2020 Actual
Equity securities23 %23 %23 %
Debt securities39 41 44 
Other38 36 33 
Total100 %100 %100 %
Valuation of Plan Assets
2021Level 1Level 2Level 3Total
Cash and cash equivalents$21 $— $— $21 
Equity securities28 119 — 147 
Corporate debt securities
2 202 — 204 
Other4 68 99 171 
Total$55 $389 $99 $543 
2020
Cash and cash equivalents$14 $— $— $14 
Equity securities23 108 — 131 
Corporate debt securities2 201 — 203 
Other7 63 104 174 
Total$46 $372 $104 $522 
Our Level 3 pension plan assets consist primarily of guaranteed investment contracts with insurance companies. The insurance contracts guarantee us principal repayment and a fixed rate of return. The $5 decrease in Level 3 pension plan assets is primarily driven by the change in the corresponding pension liability. We expect to contribute $21 to our defined benefit pension plans in 2022.
Estimated Future Benefit Payments
202220232024202520262027-2031
$21 $21 $27 $22 $23 $138