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Retirement Plans
 12 Months Ended
Dec. 31, 2023
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.
202320222021
Plan expense$327 $305 $259 
Expense funded with Stryker common stock57 41 37 
Stryker common stock held by plan:
Dollar amount$649 $522 $582 
Shares (in millions)2.2 2.1 2.2 
Value as a percentage of total plan assets10 %10 %10 %
Defined Benefit Plans
Certain of our subsidiaries have both funded and unfunded defined benefit pension plans covering some or all of their employees. The majority of our defined benefit pension plans have projected benefit obligations in excess of plan assets.
Discount Rate
The discount rates were selected using a hypothetical portfolio of high quality bonds on December 31 that would provide the necessary cash flows to match our projected benefit payments.
Expected Return on Plan Assets
The expected return on plan assets is determined by applying the target allocation in each asset category of plan investments to the anticipated return for each asset category based on historical and projected returns.
Components of Net Periodic Pension Cost
Net periodic benefit cost:202320222021
Service cost$(32)$(56)$(72)
Interest cost(23)(10)(7)
Expected return on plan assets18 15 11 
Amortization of prior service credit1 1 1 
Recognized actuarial gain (loss)4 (9)(16)
Curtailment gain— — 9 
Net periodic benefit cost$(32)$(59)$(74)
Changes in assets and benefit obligations recognized in OCI:
Net actuarial gain (loss)$(67)$244 $132 
Recognized net actuarial (gain) loss(4)9 16 
Prior service credit and transition amount(1)(1)(1)
Curtailment gain— — (9)
Total recognized in other comprehensive income (loss)$(72)$252 $138 
Total recognized in net periodic benefit cost and OCI$(104)$193 $64 
Weighted-average rates used to determine net periodic benefit cost:
Discount rate3.3 %1.1 %0.8 %
Expected return on plan assets4.2 %3.1 %2.5 %
Rate of compensation increase3.0 %2.6 %2.6 %
Weighted-average discount rate used to determine projected benefit obligations2.8 %3.3 %1.1 %
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.
20232022
Fair value of plan assets$485 $420 
Benefit obligations(826)(673)
Funded status$(341)$(253)
Reported as:
Noncurrent assets—other assets$21 $21 
Current liabilities—accrued compensation(3)(3)
Noncurrent liabilities—other liabilities(359)(271)
Pre-tax amounts recognized in AOCI:
Unrecognized net actuarial gain (loss)(39)33 
Unrecognized prior service credit11 11 
Total$(28)$44 
Change in Benefit Obligations
20232022
Beginning projected benefit obligations$673 $1,036 
Service cost32 56 
Interest cost23 10 
Foreign exchange impact32 (56)
Employee contributions7 5 
Actuarial (gains) losses79 (354)
Benefits paid(20)(24)
Ending projected benefit obligations$826 $673 
Ending accumulated benefit obligations$790 $645 
Change in Plan Assets
20232022
Beginning fair value of plan assets$420 $543 
Actual return29 (109)
Employer contributions23 19 
Employee contributions7 5 
Foreign exchange impact22 (24)
Benefits paid(16)(14)
Ending fair value of plan assets$485 $420 
Allocation of Plan Assets
2024 Target2023 Actual2022 Actual
Equity securities25 %28 %27 %
Debt securities41 37 38 
Other34 35 35 
Total100 %100 %100 %
Valuation of Plan Assets
2023Level 1Level 2Level 3Total
Cash and cash equivalents$15 $— $— $15 
Equity securities20 130 — 150 
Corporate debt securities
2 185 — 187 
Other5 63 65 133 
Total$42 $378 $65 $485 
2022
Cash and cash equivalents$18 $— $— $18 
Equity securities21 99 — 120 
Corporate debt securities2 151 — 153 
Other5 69 55 129 
Total$46 $319 $55 $420 
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 $10 increase in Level 3 pension plan assets is primarily driven by the change in the corresponding pension liability. We expect to contribute $24 to our defined benefit pension plans in 2024.
Estimated Future Benefit Payments
202420252026202720282028-2032
$23 $24 $24 $26 $28 $164