XML 43 R24.htm IDEA: XBRL DOCUMENT v3.22.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2022
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 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 $79 million, $58 million, and $38 million for the years ended December 31, 2022, 2021 and 2020, respectively.
Defined Benefit Plans
The Company maintains noncontributory defined benefit pension plans (collectively, the “Plans”) covering certain of its employees in the United Kingdom (“U.K.”), the U.S., Germany and Austria. All of these plans are frozen and provide benefits to eligible employees based on an employee’s average final compensation and years of service.
The following table provides a reconciliation of benefit obligations, plan assets and the funded status of the Plans as of and for the years ended December 31:
U.K. PlanU.S. and Other Plans
(In millions)
2022202120222021
Change in projected benefit obligations:
Balance at beginning of year$(736)$(777)$(221)$(238)
Interest cost(12)(11)(5)(5)
Settlements— 16 — — 
Actuarial gain230 15 41 9 
Benefits paid28 2114 12 
Foreign currency translation72 — 2 1 
Balance at end of year$(418)$(736)$(169)$(221)
Change in fair value of plan assets:
Balance at beginning of year$983 $974 $183 $181 
Actual return on plan assets
(290)47 (39)14 
Settlements— (16)— — 
Benefits paid(28)(21)(14)(12)
Foreign currency translation(95)(1)— — 
Balance at end of year$570 $983 $130 $183 
Funded status of the plans$152 $247 $(39)$(38)
The funded status of the 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 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 the Plans were nominal in both 2022 and 2021, 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 ObligationsNet Periodic Benefit Expense
2022202120222021
Discount rate 5.01 %1.97 %1.97 %1.56 %
Expected long-term return on plan assetsn/an/a2.19 %2.25 %
The estimated future benefit payments are expected to be as follows:
(In millions)
Year Ending December 31,
2023$34 
202434 
202535 
202636 
202737 
2028-2032196 
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 may 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, 2022 was 80% liability-hedging assets and 20% return-seeking 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 diversified blend of equities and fixed-income investments are used to maximize the long-term return of plan assets for a prudent level of risk. 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, 2022 was 61% liability-hedging assets and 39% return-seeking assets.
The following table sets forth assets carried and measured at fair value on a recurring basis for the Plans at December 31:
(In millions)
2022Level 1Level 2Level 3
Cash and cash equivalents (1)
$43 $— $— 
Equity securities (2)
1 40 — 
Fixed income securities (3)
137 86 — 
Other investments (4)
301 (26)— 
   Total investments at fair value$482 $100 $— 
(In millions)
2021Level 1Level 2Level 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 $— 
(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 Plans’ 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 $118 million and $158 million at December 31, 2022 and 2021, respectively.
Net Periodic Benefit Cost
The components of net periodic benefit cost (income) were as follows for the years ended December 31:
(In millions)202220212020
Interest cost$17 $16 $20 
Expected return on plan assets(18)(23)(24)
     Net periodic benefit income$(1)$(7)$(4)
In the first quarter of 2023, the Company commenced actions necessary to terminate the plans in the U.S. and U.K. Termination is subject to certain considerations, including regulatory review, interest rates and annuity pricing. Upon termination, the Company expects to recognize a non-cash pension settlement charge, which includes the recognition of remaining actuarial gains (losses) recorded within accumulated other comprehensive loss, and derecognition of the net assets of such plans. The amount of accrued vested benefits to be received by participants will not be impacted.