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Benefit Plans | 9 Months Ended
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Sep. 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 September 30, |  | Nine months ended September 30,
($ in millions) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Pension benefits |  |  |  |  |  |  |  |
Service cost |  | $ | 30 |  |  | $ | 27 |  |  | $ | 86 |  |  | $ | 83 |
Interest cost |  | 58 |  |  | 65 |  |  | 185 |  |  | 189 |
Expected return on plan assets |  | (103 | ) |  | (103 | ) |  | (297 | ) |  | (323 | )
Amortization of prior service credit |  | (14 | ) |  | (14 | ) |  | (42 | ) |  | (42 | )
Costs and expenses |  | (29 | ) |  | (25 | ) |  | (68 | ) |  | (93 | )
Remeasurement of projected benefit obligation |  | 323 |  |  | (38 | ) |  | 1,054 |  |  | (314 | )
Remeasurement of plan assets |  | (136 | ) |  | 4 |  |  | (752 | ) |  | 301 |
Remeasurement gains and losses |  | 187 |  |  | (34 | ) |  | 302 |  |  | (13 | )
Pension net cost (benefit) |  | $ | 158 |  |  | $ | (59 | ) |  | $ | 234 |  |  | $ | (106 | )
Postretirement benefits |  |  |  |  |  |  |  |
Service cost |  | $ | 2 |  |  | $ | 1 |  |  | $ | 6 |  |  | $ | 5 |
Interest cost |  | 4 |  |  | 4 |  |  | 11 |  |  | 11 |
Amortization of prior service credit |  | — |  |  | (5 | ) |  | (2 | ) |  | (16 | )
Costs and expenses |  | 6 |  |  | — |  |  | 15 |  |  | — |
Remeasurement of projected benefit obligation |  | 38 |  |  | (5 | ) |  | 63 |  |  | (19 | )
Remeasurement of plan assets |  | — |  |  | — |  |  | — |  |  | — |
Remeasurement gains and losses |  | 38 |  |  | (5 | ) |  | 63 |  |  | (19 | )
Postretirement net cost (benefit) |  | $ | 44 |  |  | $ | (5 | ) |  | $ | 78 |  |  | $ | (19 | )
Pension and postretirement benefits |  |  |  |  |  |  |  |
Costs and expenses |  | $ | (23 | ) |  | $ | (25 | ) |  | $ | (53 | ) |  | $ | (93 | )
Remeasurement gains and losses |  | 225 |  |  | (39 | ) |  | 365 |  |  | (32 | )
Total net cost (benefit) |  | $ | 202 |  |  | $ | (64 | ) |  | $ | 312 |  |  | $ | (125 | )
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 $225 million and $365 million for the third quarter and first nine months of 2019, respectively, compared to remeasurement gains of $39 million and $32 million for the same periods of 2018. The losses for the third quarter and first nine months of 2019 primarily related 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 3.17% at September 30, 2019 compared to 3.53% at June 30, 2019, 3.87% at March 31, 2019 and 4.30% at December 31, 2018. Pension and other postretirement remeasurement of projected benefit obligation losses due to declines in the weighted average discount rate were $324 million and $1.04 billion for the third quarter and first nine months of 2019, respectively. During the third quarter of 2019, the Company completed its triennial study of demographic assumptions. The Company reviewed historical experience for various long-term actuarial assumptions and methodologies that affect our pension and other postretirement obligations and incorporated updates into its best estimates of these assumptions. The update to these assumptions resulted in an increase of pension and other postretirement obligations primarily related to the timing of participant retirements and higher levels and duration of medical coverage elected for retirees, partially offset by lower ages of employees electing medical coverage. 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. Actuarial assumption updates that affect our pension and other postretirement obligations resulted in remeasurement losses of $37 million and $81 million in the third quarter and first nine months of 2019, respectively, compared to gains of $3 million and losses of $72 million in the third quarter of 2018 and first nine months of 2018, respectively. For the third quarter and first nine months of 2019, the actual return on plan assets was higher than our expected return by $136 million and $752 million, respectively, due to declines in interest rates which increased the fair value of our fixed income investments. The increase in the first nine months of 2019 was also due to strong equity market performance.

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