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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2021
Retirement Benefits [Abstract] |
Employee Benefit Plans | Employee Benefit Plans Defined Contribution Plans The Company and its subsidiaries maintain defined contribution savings plans covering the majority of their employees. Under the plans, eligible participants may elect to contribute a specified percentage of their salaries and the Company makes matching contributions, each subject to certain limitations. The plans provide tax-deferred amounts for each participant, consisting of employee elective contributions, company matching and discretionary company contributions. In response to the COVID-19 pandemic, the Company has taken several actions since the onset of the pandemic to manage discretionary costs, including the reduction or temporary suspension of certain employee-related benefits such as company matching contributions to the plans during 2021 and most of 2020. The Company temporarily suspended company matching contributions during most of 2020 and re-established such contributions effective January 1, 2021, to equal 100% on the first 1% contributed and 25% on the next 4% contributed for eligible participants. Effective January 1, 2022, company matching contributions were increased to 100% on the first 1% contributed and 50% on the next 4% contributed for eligible participants. Expenses for company contributions under these plans totaled $58 million, $38 million, and $65 million and in 2021, 2020 and 2019, respectively. In connection with the acquisition of First Data (see Note 4), the Company assumed defined contribution savings plans and defined contribution pension plans covering substantially all employees of the former First Data. Effective January 1, 2020, the 401(k) Savings Plan of Fiserv, Inc. (the “Plan”) was amended to freeze the Plan to new participants and contributions and to allow for the merger of the Plan into the surviving Fiserv 401(k) Savings Plan (f/k/a the First Data Corporation Incentive Savings Plan) (“New Fiserv Plan”) for the purpose of providing a single plan covering current and former employees of both companies and their affiliates. Participants in the Plan became eligible to make salary reduction contributions in the New Fiserv Plan effective January 1, 2020. The merger of the Plan into the New Fiserv Plan was completed in the third quarter of 2020. Defined Benefit Plans The Company maintains noncontributory defined benefit pension plans covering a portion of its employees in the United Kingdom (“U.K.”), the U.S., Germany and Austria. The majority of these plans are frozen, representing substantially all of the benefit obligations and plan assets, and provide benefits to eligible employees based on an employee’s average final compensation and years of service. The following table provides a reconciliation of benefit obligations, plan assets and the funded status of these defined benefit plans as of and for the years ended December 31:
|  | U.K. plan |  | U.S. and other plans
(In millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020
Change in projected benefit obligations: |  |  |  |  |  |  |  |
Balance at beginning of year |  | $ | (777) |  |  | $ | (672) |  |  | $ | (238) |  |  | $ | (225) |
Interest cost |  | (11) |  |  | (14) |  |  | (5) |  |  | (6) |
Settlements |  | 16 |  |  | — |  |  | — |  |  | — |
Actuarial gain (loss) |  | 15 |  |  | (93) |  |  | 9 |  |  | (18) |
Benefits paid |  | 21 |  |  | 30 |  | 12 |  |  | 13 |
Foreign currency translation |  | — |  |  | (28) |  |  | 1 |  |  | (2) |
Balance at end of year |  | $ | (736) |  |  | $ | (777) |  |  | $ | (221) |  |  | $ | (238) |
Change in fair value of plan assets: |  |  |  |  |  |  |  |
Balance at beginning of year |  | $ | 974 |  |  | $ | 860 |  |  | $ | 181 |  |  | $ | 167 |
Actual return on plan assets |  | 47 |  |  | 110 |  |  | 14 |  |  | 22 |
Company contribution |  | — |  |  | — |  |  | — |  |  | 5 |
Settlements |  | (16) |  |  | — |  |  | — |  |  | — |
Benefits paid |  | (21) |  |  | (30) |  |  | (12) |  |  | (13) |
Foreign currency translation |  | (1) |  |  | 34 |  | — |  |  | — |
Balance at end of year |  | $ | 983 |  |  | $ | 974 |  |  | $ | 183 |  |  | $ | 181 |
Funded status of the plans |  | $ | 247 |  |  | $ | 197 |  |  | $ | (38) |  |  | $ | (57) |
The funded status of the defined benefit plans is recognized as an asset or a liability within other long-term assets or within other long-term liabilities in the consolidated balance sheets. Projected Benefit Obligations The Company records amounts relating to its defined benefit pension plan obligations and their associated expenses based on calculations which include actuarial assumptions, including the discount rate and the expected rate of return on plan assets. Changes in any of the assumptions and the amortization of differences between the assumptions and actual experience will affect the amount of pension expense in future periods. The Company reviews its actuarial assumptions at least annually and modifies the assumptions based on current rates and trends, as appropriate. The effects of modifications are recognized immediately within the consolidated balance sheets, and are generally amortized to operating income over future periods, with the deferred amount recorded in accumulated other comprehensive loss within the consolidated balance sheets. The Company’s funding policy is to contribute quarterly an amount as recommended by the plans’ independent actuaries. Company contributions under these plans were nominal in 2021 and $5 million in 2020, with future contributions not expected to be significant. The Company employs a building block approach in determining the expected long-term rate of return for plan assets with proper consideration of diversification and re-balancing. Historical markets are studied and long-term historical relationships between equities and fixed-income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. Peer data and historical returns are reviewed to check for reasonableness and appropriateness. The weighted-average rate assumptions used in the measurement of the Company’s projected benefit obligations and net periodic benefit expense as of and for the years ended December 31 were as follows:
|  | Projected Benefit Obligations |  | Net Periodic Benefit Expense
|  | 2021 |  | 2020 |  | 2021 |  | 2020
Discount rate |  | 1.97 | % |  | 1.56 | % |  | 1.56 | % |  | 1.95 | %
Expected long-term return on plan assets |  | n/a |  | n/a |  | 2.25 | % |  | 2.84 | %
The estimated future benefit payments are expected to be as follows:
(In millions) |  |
Year Ending December 31, |  |
2022 |  | $ | 33 |
2023 |  | 35 |
2024 |  | 36 |
2025 |  | 37 |
2026 |  | 38 |
2027-2031 |  | 205 |
Plan Assets The Company’s investment strategy for the U.K. plan is to allocate the assets into two pools: (i) liability-hedging assets whereby the focus is risk management, protection and insurance relative to the liability target invested in, but not limited to, money market funds, debt, U.K. government bonds and U.K. government index-linked bonds; and (ii) return-seeking assets whereby the focus is on return generation and taking risk in a controlled manner. Such assets could include equities, government bonds, high-yield bonds, property, commodities or hedge funds. The Company’s target allocation for the U.K. plan based on the investment policy at December 31, 2021 was 20% return-seeking assets and 80% liability-hedging assets. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset and liability studies. The Company’s investment strategy for the U.S. plan employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The investment portfolio contains a diversified blend of equity and fixed-income investments. The Company sets an allocation mix necessary to support the underlying plan liabilities as influenced significantly by the demographics of the participants and the frozen nature of the plan. The Company’s target allocation for the U.S. plan based on the investment policy at December 31, 2021 was 39% return-seeking assets and 61% liability-hedging assets. The following table sets forth the Company’s plan assets carried and measured at fair value on a recurring basis at December 31:
(In millions) |  |  |  |  |
2021 | Level 1 |  | Level 2 |  | Level 3
Cash and cash equivalents (1) | $ | 230 |  |  | $ | — |  |  | $ | — |
Equity securities (2) | 10 |  |  | 93 |  |  | — |
Fixed income securities (3) | 202 |  |  | 105 |  |  | — |
Other investments (4) | 361 |  |  | 7 |  |  | — |
Total investments at fair value | $ | 803 |  |  | $ | 205 |  |  | $ | — |
(In millions) |  |  |  |  |
2020 | Level 1 |  | Level 2 |  | Level 3
Cash and cash equivalents (1) | $ | 24 |  |  | $ | — |  |  | $ | — |
Equity securities (2) | 20 |  |  | 175 |  |  | — |
Fixed income securities (3) | 213 |  |  | 165 |  |  | — |
Other investments (4) | 326 |  |  | (4) |  |  | 9 |
Total investments at fair value | $ | 583 |  |  | $ | 336 |  |  | $ | 9 |
(1)Cash and cash equivalents include highly liquid investments in money market funds. (2)Equity securities primarily consist of domestic, international and global equity pooled funds. (3)Fixed income securities primarily consist of debt securities issued by U.S. and foreign government agencies and debt obligations issued by a variety of private and public corporations. (4)Other investments primarily consist of index linked government bonds, derivatives and other investments. In addition to the investments presented within the fair value hierarchy table above, the Company’s plan assets include investments in various collective trusts that are measured at fair value using the net asset value per share (or its equivalent) practical expedient. Such investments totaled $158 million and $227 million at December 31, 2021 and 2020, respectively. Net Periodic Benefit Cost The components of net periodic benefit expense were as follows for the years ended December 31:
(In millions) |  | 2021 |  | 2020 |  | 2019
Interest cost |  | $ | 16 |  |  | $ | 20 |  |  | $ | 9 |
Expected return on plan assets |  | (23) |  |  | (24) |  |  | (10) |
Net periodic benefit income |  | $ | (7) |  |  | $ | (4) |  |  | $ | (1) |

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