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Benefit Plans | 6 Months Ended
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Jun. 30, 2019
Retirement Benefits [Abstract] |
Benefit Plans |
Note 13 | Benefit Plans
Change in accounting principle As discussed in Note 1, the Company changed its accounting principle for recognizing actuarial gains and losses and expected return on plan assets for its pension and other postretirement plans to a more preferable policy under U.S. GAAP. Under the new principle, remeasurement of projected benefit obligation and plan assets are immediately recognized through earnings and are referred to as pension and other postretirement remeasurement gains and losses on the Condensed Consolidated Statements of Operations. This change has been applied on a retrospective basis. See Note 1 for further information regarding the impact of the change in accounting principle on the condensed consolidated financial statements.
Components of net cost (benefit) for pension and other postretirement plans
|  | Three months ended June 30, |  | Six months ended June 30,
($ in millions) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Pension benefits |  |  |  |  |  |  |  |
Service cost |  | $ | 28 |  |  | $ | 28 |  |  | $ | 56 |  |  | $ | 56 |
Interest cost |  | 62 |  |  | 63 |  |  | 127 |  |  | 124 |
Expected return on plan assets |  | (101 | ) |  | (107 | ) |  | (194 | ) |  | (220 | )
Amortization of prior service credit |  | (14 | ) |  | (14 | ) |  | (28 | ) |  | (28 | )
Costs and expenses |  | (25 | ) |  | (30 | ) |  | (39 | ) |  | (68 | )
Remeasurement of projected benefit obligation |  | 344 |  |  | (86 | ) |  | 731 |  |  | (276 | )
Remeasurement of plan assets |  | (225 | ) |  | 85 |  |  | (616 | ) |  | 297 |
Remeasurement gains and losses |  | 119 |  |  | (1 | ) |  | 115 |  |  | 21 |
Total net cost (benefit) |  | $ | 94 |  |  | $ | (31 | ) |  | $ | 76 |  |  | $ | (47 | )
Postretirement benefits |  |  |  |  |  |  |  |
Service cost |  | $ | 2 |  |  | $ | 2 |  |  | $ | 4 |  |  | $ | 4 |
Interest cost |  | 3 |  |  | 3 |  |  | 7 |  |  | 7 |
Amortization of prior service credit |  | (1 | ) |  | (6 | ) |  | (2 | ) |  | (11 | )
Costs and expenses |  | 4 |  |  | (1 | ) |  | 9 |  |  | — |
Remeasurement of projected benefit obligation |  | 6 |  |  | (6 | ) |  | 25 |  |  | (14 | )
Remeasurement of plan assets |  | — |  |  | — |  |  | — |  |  | — |
Remeasurement gains and losses |  | 6 |  |  | (6 | ) |  | 25 |  |  | (14 | )
Total net cost (benefit) |  | $ | 10 |  |  | $ | (7 | ) |  | $ | 34 |  |  | $ | (14 | )
D ifferences between expected and actual returns and changes in assumptions affect our pension and other postretirement obligations, plan assets and expenses. Pension and other postretirement remeasurement losses were $125 million and $140 million for the second quarter and first six months of 2019, respectively, compared to remeasurement gains of $7 million and remeasurement losses of $7 million for the same periods of 2018. The increased loss in both periods was primarily due to a decrease in the discount rate used to value the liabilities, partially offset by favorable asset performance compared to the expected return on plan assets. The weighted average discount rate used to measure the benefit obligation decreased to 3.53% at June 30, 2019 compared to 3.87% at March 31, 2019 and 4.30% at December 31, 2018. Pension and other postretirement remeasurement losses due to declines in the weighted average discount rate were $308 million and $714 million for the second quarter and first six months of 2019, respectively. During the second quarter of 2019, we recognized participant experience different from our demographic assumptions for mortality, terminations and retirements and the percentage of employees taking lump sum distributions which resulted in remeasurement losses of $42 million in the second quarter and first six months of 2019 compared to $75 million for the same periods of 2018. For the second quarter and first six months of 2019, the actual return on plan assets was higher than our expected return by $225 million and $616 million, respectively, due to strong equity market performance and declines in interest rates which increased the fair value of our fixed income investments.

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