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Retirement Benefits (Notes) | 12 Months Ended
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Dec. 31, 2021
Retirement Benefits [Abstract] |
RETIREMENT BENEFITS | RETIREMENT BENEFITS Defined benefit pension and OPEB plan obligations are remeasured at least annually as of December 31 based on the present value of projected future benefit payments for all participants for services rendered to date. The measurement of projected future benefits is dependent on the provisions of each specific plan, demographics of the group covered by the plan, and other key measurement assumptions. For plans that provide benefits dependent on salary assumptions, we include a projection of salary growth in our measurements. No assumption is made regarding any potential future changes to benefit provisions beyond those to which we are presently committed (e.g., in existing labor contracts). Net periodic benefit costs, including service cost, interest cost, and expected return on assets, are determined using assumptions regarding the benefit obligation and the fair value of plan assets (where applicable) as of the beginning of each year. We have elected to use a fair value of plan assets to calculate the expected return on assets in net periodic benefit cost. The funded status of the benefit plans, which represents the difference between the benefit obligation and fair value of plan assets, is calculated on a plan-by-plan basis. The benefit obligation and related funded status are determined using assumptions as of the end of each year. Actuarial gains and losses resulting from plan remeasurement are recognized in net periodic benefit cost in the period of the remeasurement. The impact of a retroactive plan amendment is recorded in Accumulated other comprehensive income/(loss), and is amortized as a component of net periodic cost, generally over the remaining service period of the active employees. The service cost component is included in Cost of sales and Selling, administrative and other expenses. Other components of net periodic benefit cost/(income) are included in Other income/(loss), net on our consolidated income statements. A curtailment results from an event that significantly reduces the expected years of future service or eliminates the accrual of defined benefits for the future services of a significant number of employees. A curtailment gain is recorded when the employees who are entitled to a benefit terminate their employment, or when a plan suspension or amendment that results in a curtailment gain is adopted. A curtailment loss is recorded when it becomes probable a curtailment loss will occur. We recognize settlement expense when the costs associated with all settlements during the year exceed the interest component of net periodic cost for the affected plan. Expense from curtailments and settlements is recorded in Other income/(loss), net. Defined Benefit Pension Plans. We have defined benefit pension plans covering hourly and salaried employees in the United States, Canada, United Kingdom, Germany, and other locations. The largest portion of our worldwide obligation is associated with our U.S. plans. Virtually all of our worldwide defined benefit plans are closed to new participants. In general, our defined benefit pension plans are funded (i.e., have restricted assets from which benefits are paid). Our unfunded defined benefit pension plans are treated on a “pay as you go” basis with benefit payments from general Company cash. These unfunded plans primarily include certain plans in Germany and the U.S. defined benefit plans for senior management. OPEB. We have defined benefit OPEB plans, primarily certain health care and life insurance benefits, covering hourly and salaried employees in the United States, Canada, and other locations. The largest portion of our worldwide obligation is associated with our U.S. plans. Our OPEB plans are unfunded and the benefits are paid from general Company cash. Defined Contribution and Savings Plans. We also have defined contribution and savings plans for hourly and salaried employees in the United States and other locations. Company contributions to these plans, if any, are made from general Company cash and are expensed as incurred. The expense for our worldwide defined contribution and savings plans was $444 million, $398 million, and $432 million for the years ended December 31, 2019, 2020, and 2021, respectively. This includes the expense for Company-matching contributions to our primary employee savings plan in the United States of $143 million, $146 million, and $152 million for the years ended December 31, 2019, 2020, and 2021, respectively. The 2019 expense also reflects a one-time contribution of $33 million to certain eligible employees as part of the UAW collective bargaining agreement. NOTE 17. RETIREMENT BENEFITS (Continued) Defined Benefit Plans – Expense and Status The assumptions used to determine benefit obligation and net periodic benefit cost/(income) were as follows:
| Pension Benefits |  |  |  |
| U.S. Plans |  | Non-U.S. Plans |  | Worldwide OPEB
| 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021
Weighted Average Assumptions at December 31 |  |  |  |  |  |  |  |  |  |  |
Discount rate | 2.56 | % |  | 2.91 | % |  | 1.23 | % |  | 1.75 | % |  | 2.62 | % |  | 2.97 | %
Average rate of increase in compensation | 3.50 |  |  | 3.50 |  |  | 3.34 |  |  | 3.19 |  |  | 3.44 |  |  | 3.46 |
Weighted Average Assumptions Used to Determine Net Benefit Cost for the Year Ended December 31 |  |  |  |  |  |  |  |  |  |  |
Discount rate - Service cost | 3.55 | % |  | 3.02 | % |  | 1.75 | % |  | 1.44 | % |  | 3.57 | % |  | 3.14 | %
Effective interest rate on benefit obligation | 2.88 |  |  | 2.00 |  |  | 1.46 |  |  | 1.06 |  |  | 2.85 |  |  | 1.96 |
Expected long-term rate of return on assets | 6.50 |  |  | 6.00 |  |  | 3.67 |  |  | 3.42 |  |  | — |  |  | — |
Average rate of increase in compensation | 3.50 |  |  | 3.50 |  |  | 3.37 |  |  | 3.34 |  |  | 3.44 |  |  | 3.44 |
The pre-tax net periodic benefit cost/(income) for our defined benefit pension and OPEB plans for the years ended December 31 was as follows (in millions):
| Pension Benefits |  |  |  |  |  |
| U.S. Plans |  | Non-U.S. Plans |  | Worldwide OPEB
| 2019 |  | 2020 |  | 2021 |  | 2019 |  | 2020 |  | 2021 |  | 2019 |  | 2020 |  | 2021
Service cost | $ | 474 |  |  | $ | 520 |  |  | $ | 526 |  |  | $ | 506 |  |  | $ | 529 |  |  | $ | 557 |  |  | $ | 43 |  |  | $ | 47 |  |  | $ | 49 |
Interest cost | 1,570 |  |  | 1,291 |  |  | 928 |  |  | 691 |  |  | 514 |  |  | 420 |  |  | 211 |  |  | 169 |  |  | 127 |
Expected return on assets | (2,657) |  |  | (2,795) |  |  | (2,728) |  |  | (1,124) |  |  | (1,067) |  |  | (1,130) |  |  | — |  |  | — |  |  | — |
Amortization of prior service costs/(credits) | 87 |  |  | 4 |  |  | 2 |  |  | 33 |  |  | 32 |  |  | 24 |  |  | (70) |  |  | (16) |  |  | (12) |
Net remeasurement (gain)/loss | (135) |  |  | 377 |  |  | (254) |  |  | 2,084 |  |  | 499 |  |  | (3,241) |  |  | 551 |  |  | 556 |  |  | (376) |
Separation programs/other | 22 |  |  | 35 |  |  | 19 |  |  | 398 |  |  | 226 |  |  | 156 |  |  | — |  |  | — |  |  | — |
Settlements and curtailments | (67) |  |  | 5 |  |  | 70 |  |  | 8 |  |  | 103 |  |  | (2) |  |  | — |  |  | (2) |  |  | — |
Net periodic benefit cost/(income) | $ | (706) |  |  | $ | (563) |  |  | $ | (1,437) |  |  | $ | 2,596 |  |  | $ | 836 |  |  | $ | (3,216) |  |  | $ | 735 |  |  | $ | 754 |  |  | $ | (212) |
In 2019, we recognized additional expense of $361 million related to separation programs, settlements, and curtailments, which included a $57 million settlement loss, offset partially by a $12 million curtailment gain, related to the transfer of our Netherlands pension obligation and related plan assets to an insurance company, and $415 million of separation expenses, partially offset by $104 million of settlement and curtailment gains, related to ongoing redesign programs. In 2020, we recognized additional expense of $367 million related to separation programs, settlements, and curtailments, which included $61 million of settlement losses related to a non-U.S. pension plan and $268 million related to ongoing redesign programs. In 2021, we recognized expense of $244 million related to separation programs, settlements, and curtailments, which included $70 million of settlement losses related to a U.S. pension plan and additional separation expense of $156 million in non-U.S. pension plans related to ongoing redesign programs. Until our Global Redesign programs are completed, we anticipate further adjustments to our plans in subsequent periods. NOTE 17. RETIREMENT BENEFITS (Continued) The year-end status of these plans was as follows (in millions):
|  | Pension Benefits |  |  |  |
|  | U.S. Plans |  | Non-U.S. Plans |  | Worldwide OPEB
|  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021
Change in Benefit Obligation |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at January 1 |  | $ | 45,672 |  |  | $ | 49,020 |  |  | $ | 35,373 |  |  | $ | 39,835 |  |  | $ | 6,072 |  |  | $ | 6,575 |
Service cost |  | 520 |  |  | 526 |  |  | 529 |  |  | 557 |  |  | 47 |  |  | 49 |
Interest cost |  | 1,291 |  |  | 928 |  |  | 514 |  |  | 420 |  |  | 169 |  |  | 127 |
Amendments |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 21 |  |  | — |
Separation programs/other |  | (10) |  |  | (25) |  |  | 219 |  |  | 185 |  |  | — |  |  | — |
Curtailments |  | — |  |  | — |  |  | — |  |  | (4) |  |  | — |  |  | — |
Settlements |  | (25) |  |  | (1,297) |  |  | (189) |  |  | — |  |  | — |  |  | — |
Plan participant contributions |  | 23 |  |  | 20 |  |  | 14 |  |  | 13 |  |  | 21 |  |  | 21 |
Benefits paid |  | (3,055) |  |  | (2,522) |  |  | (1,394) |  |  | (1,565) |  |  | (339) |  |  | (356) |
Foreign exchange translation |  | — |  |  | — |  |  | 1,131 |  |  | (1,432) |  |  | 28 |  |  | — |
Actuarial (gain)/loss |  | 4,604 |  |  | (1,762) |  |  | 3,638 |  |  | (3,581) |  |  | 556 |  |  | (376) |
Benefit obligation at December 31 |  | 49,020 |  |  | 44,888 |  |  | 39,835 |  |  | 34,432 |  |  | 6,575 |  |  | 6,040 |
Change in Plan Assets |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at January 1 |  | 44,253 |  |  | 48,355 |  |  | 29,958 |  |  | 33,820 |  |  | — |  |  | — |
Actual return on plan assets |  | 7,018 |  |  | 1,150 |  |  | 4,149 |  |  | 788 |  |  | — |  |  | — |
Company contributions |  | 186 |  |  | 247 |  |  | 744 |  |  | 912 |  |  | — |  |  | — |
Plan participant contributions |  | 23 |  |  | 20 |  |  | 14 |  |  | 13 |  |  | — |  |  | — |
Benefits paid |  | (3,055) |  |  | (2,522) |  |  | (1,394) |  |  | (1,565) |  |  | — |  |  | — |
Settlements |  | (25) |  |  | (1,297) |  |  | (189) |  |  | — |  |  | — |  |  | — |
Foreign exchange translation |  | — |  |  | — |  |  | 547 |  |  | (855) |  |  | — |  |  | — |
Other |  | (45) |  |  | (44) |  |  | (9) |  |  | (28) |  |  | — |  |  | — |
Fair value of plan assets at December 31 |  | 48,355 |  |  | 45,909 |  |  | 33,820 |  |  | 33,085 |  |  | — |  |  | — |
Funded status at December 31 |  | $ | (665) |  |  | $ | 1,021 |  |  | $ | (6,015) |  |  | $ | (1,347) |  |  | $ | (6,575) |  |  | $ | (6,040) |
Amounts Recognized on the Balance Sheets |  |  |  |  |  |  |  |  |  |  |  |
Prepaid assets |  | $ | 1,578 |  |  | $ | 3,130 |  |  | $ | 2,673 |  |  | $ | 5,404 |  |  | $ | — |  |  | $ | — |
Other liabilities |  | (2,243) |  |  | (2,109) |  |  | (8,688) |  |  | (6,751) |  |  | (6,575) |  |  | (6,040) |
Total |  | $ | (665) |  |  | $ | 1,021 |  |  | $ | (6,015) |  |  | $ | (1,347) |  |  | $ | (6,575) |  |  | $ | (6,040) |
Amounts Recognized in Accumulated Other Comprehensive Loss (pre-tax) |  |  |  |  |  |  |  |  |  |  |  |
Unamortized prior service costs/(credits) |  | $ | 4 |  |  | $ | 2 |  |  | $ | 206 |  |  | $ | 170 |  |  | $ | (11) |  |  | $ | 22 |
Pension Plans in which Accumulated Benefit Obligation Exceeds Plan Assets at December 31 |  |  |  |  |  |  |  |  |  |  |  |
Accumulated benefit obligation |  | $ | 2,295 |  |  | $ | 2,192 |  |  | $ | 14,595 |  |  | $ | 12,586 |  |  |  |  |
Fair value of plan assets |  | 145 |  |  | 140 |  |  | 7,203 |  |  | 6,835 |  |  |  |  |
Accumulated Benefit Obligation at December 31 |  | $ | 47,848 |  |  | $ | 43,879 |  |  | $ | 36,272 |  |  | $ | 31,850 |  |  |  |  |
Pension Plans in which Projected Benefit Obligation Exceeds Plan Assets at December 31 |  |  |  |  |  |  |  |  |  |  |  |
Projected benefit obligation |  | $ | 2,389 |  |  | $ | 2,249 |  |  | $ | 15,951 |  |  | $ | 13,651 |  |  |  |  |
Fair value of plan assets |  | 145 |  |  | 140 |  |  | 7,264 |  |  | 6,900 |  |  |  |  |
Projected Benefit Obligation at December 31 |  | $ | 49,020 |  |  | $ | 44,888 |  |  | $ | 39,835 |  |  | $ | 34,432 |  |  |  |  |
NOTE 17. RETIREMENT BENEFITS (Continued) The actuarial (gain)/loss for our pension benefit obligations in 2020 and 2021 was primarily related to changes in discount rates. Pension Plan Contributions Our policy for funded pension plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. We may make contributions beyond those legally required. In 2021, we contributed $773 million to our global funded pension plans and made $387 million of benefit payments to participants in unfunded plans. During 2022, we expect to contribute between $600 million and $800 million of cash to our global funded pension plans. We also expect to make about $390 million of benefit payments to participants in unfunded plans. Based on current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S. pension plans in 2022. Expected Future Benefit Payments The expected future benefit payments at December 31, 2021 were as follows (in millions):
|  | Benefit Payments
|  | Pension |  |
|  | U.S. Plans |  | Non-U.S. Plans |  | Worldwide OPEB
2022 |  | $ | 2,700 |  |  | $ | 1,490 |  |  | $ | 335 |
2023 |  | 2,670 |  |  | 1,350 |  |  | 330 |
2024 |  | 2,680 |  |  | 1,360 |  |  | 330 |
2025 |  | 2,680 |  |  | 1,380 |  |  | 330 |
2026 |  | 2,650 |  |  | 1,380 |  |  | 330 |
2027-2031 |  | 12,805 |  |  | 7,035 |  |  | 1,620 |
Pension Plan Asset Information Investment Objectives and Strategies. Our investment objectives for the U.S. plans are to minimize the volatility of the value of our U.S. pension assets relative to U.S. pension obligations and to ensure assets are sufficient to pay plan benefits. Our largest non-U.S. plans (e.g., United Kingdom and Canada) have similar investment objectives to the U.S. plans. Investment strategies and policies for the U.S. plans and the largest non-U.S. plans reflect a balance of risk-reducing and return-seeking considerations. The objective of minimizing the volatility of assets relative to obligations is addressed primarily through asset-liability matching, asset diversification, and hedging. The fixed income asset allocation matches the bond-like and long-dated nature of the pension obligations. Assets are broadly diversified within asset classes to achieve risk-adjusted returns that, in total, lower asset volatility relative to the obligations. Strategies to address the goal of ensuring sufficient assets to pay benefits include target allocations to a broad array of asset classes, and strategies within asset classes that provide adequate returns, diversification, and liquidity. NOTE 17. RETIREMENT BENEFITS (Continued) Derivatives are permitted for fixed income investment and public equity managers to use as efficient substitutes for traditional securities and to manage exposure to interest rate and foreign exchange risks. Interest rate and foreign currency derivative instruments are used for the purpose of hedging changes in the fair value of assets that result from interest rate changes and currency fluctuations. Interest rate derivatives are also used to adjust portfolio duration. Derivatives may not be used to leverage or to alter the economic exposure to an asset class outside the scope of the mandate an investment manager has been given. Alternative investment managers are permitted to employ leverage (including through the use of derivatives or other tools) that may alter economic exposure. Alternative investments execute diverse strategies that provide exposure to a broad range of hedge fund strategies, equity investments in private companies, and investments in private property funds. Significant Concentrations of Risk. Significant concentrations of risk in our plan assets relate to interest rates, growth assets, and operating risks. In order to minimize asset volatility relative to the obligations, the majority of plan assets are allocated to fixed income investments which are exposed to interest rate risk. Rate increases generally will result in a decline in the value of fixed income assets, while reducing the present value of the obligations. Conversely, rate decreases generally will increase the value of fixed income assets, offsetting the related increase in the obligations. In order to ensure assets are sufficient to pay benefits, a portion of plan assets is allocated to growth assets (primarily hedge funds, real estate, private equity, and public equity) that are expected over time to earn higher returns with more volatility than fixed income investments, which more closely match pension obligations. Within growth assets, risk is mitigated by constructing a portfolio that is broadly diversified by asset class, investment strategy, manager, style, and process. Operating risks include the risks of inadequate diversification and weak controls. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight (e.g., style adherence, team strength, firm health, and internal risk controls), plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance reviews to ensure adherence. At year-end 2021, Ford securities comprised less than 1% of our plan assets. Expected Long-Term Rate of Return on Assets. The long-term return assumption at year-end 2021 is 5.75% for the U.S. plans, 3.00% for the U.K. plans, and 4.11% for the Canadian plans, and averages 3.29% for all non-U.S. plans. A generally consistent approach is used worldwide to develop this assumption. This approach considers primarily inputs from a range of advisors for long-term capital market returns, inflation, bond yields, and other variables, adjusted for specific aspects of our investment strategy by plan. Historical returns also are considered where appropriate. The assumption is based on consideration of all inputs, with a focus on long-term trends to avoid short-term market influences. NOTE 17. RETIREMENT BENEFITS (Continued) The fair value of our defined benefit pension plan assets (including dividends and interest receivables of $317 million and $102 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions):
| 2020
| U.S. Plans |  | Non-U.S. Plans
| Level 1 |  | Level 2 |  | Level 3 |  | Assets measured at NAV (a) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Assets measured at NAV (a) |  | Total
Asset Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. companies | $ | 2,161 |  |  | $ | 20 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,181 |  |  | $ | 1,989 |  |  | $ | 48 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,037 |
International companies | 1,346 |  |  | 18 |  |  | 2 |  |  | — |  |  | 1,366 |  |  | 1,428 |  |  | 181 |  |  | 4 |  |  | — |  |  | 1,613 |
Total equity | 3,507 |  |  | 38 |  |  | 2 |  |  | — |  |  | 3,547 |  |  | 3,417 |  |  | 229 |  |  | 4 |  |  | — |  |  | 3,650 |
Fixed Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agencies | 9,243 |  |  | 2,177 |  |  | — |  |  | — |  |  | 11,420 |  |  | — |  |  | 75 |  |  | — |  |  | — |  |  | 75 |
Non-U.S. government | — |  |  | 1,203 |  |  | 14 |  |  | — |  |  | 1,217 |  |  | — |  |  | 20,398 |  |  | — |  |  | — |  |  | 20,398 |
Corporate bonds | — |  |  | 26,983 |  |  | — |  |  | — |  |  | 26,983 |  |  | — |  |  | 3,391 |  |  | 53 |  |  | — |  |  | 3,444 |
Mortgage/other asset-backed | — |  |  | 512 |  |  | — |  |  | — |  |  | 512 |  |  | — |  |  | 515 |  |  | 16 |  |  | — |  |  | 531 |
Commingled funds | — |  |  | 189 |  |  | — |  |  | — |  |  | 189 |  |  | — |  |  | 111 |  |  | — |  |  | — |  |  | 111 |
Derivative financial instruments, net | 1 |  |  | (95) |  |  | — |  |  | — |  |  | (94) |  |  | 2 |  |  | 80 |  |  | (118) |  |  | — |  |  | (36) |
Total fixed income | 9,244 |  |  | 30,969 |  |  | 14 |  |  | — |  |  | 40,227 |  |  | 2 |  |  | 24,570 |  |  | (49) |  |  | — |  |  | 24,523 |
Alternatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedge funds | — |  |  | — |  |  | — |  |  | 3,258 |  |  | 3,258 |  |  | — |  |  | — |  |  | — |  |  | 1,259 |  |  | 1,259 |
Private equity | — |  |  | — |  |  | — |  |  | 1,859 |  |  | 1,859 |  |  | — |  |  | — |  |  | — |  |  | 729 |  |  | 729 |
Real estate | — |  |  | — |  |  | — |  |  | 1,220 |  |  | 1,220 |  |  | — |  |  | — |  |  | — |  |  | 323 |  |  | 323 |
Total alternatives | — |  |  | — |  |  | — |  |  | 6,337 |  |  | 6,337 |  |  | — |  |  | — |  |  | — |  |  | 2,311 |  |  | 2,311 |
Cash, cash equivalents, and repurchase agreements (b) | (605) |  |  | — |  |  | — |  |  | — |  |  | (605) |  |  | (2,257) |  |  | — |  |  | — |  |  | — |  |  | (2,257) |
Other (c) | (1,151) |  |  | — |  |  | — |  |  | — |  |  | (1,151) |  |  | (458) |  |  | — |  |  | 6,051 |  |  | — |  |  | 5,593 |
Total assets at fair value | $ | 10,995 |  |  | $ | 31,007 |  |  | $ | 16 |  |  | $ | 6,337 |  |  | $ | 48,355 |  |  | $ | 704 |  |  | $ | 24,799 |  |  | $ | 6,006 |  |  | $ | 2,311 |  |  | $ | 33,820 |
__________ (a)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (b)Primarily short-term investment funds to provide liquidity to plan investment managers, cash held to pay benefits, and repurchase agreements valued at $(2.4) billion in U.S. plans and $(2.9) billion in non-U.S. plans. (c)For U.S. plans, amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). For non-U.S plans, primarily Ford-Werke, plan assets (insurance contracts valued at $5 billion at year-end 2020) and amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). NOTE 17. RETIREMENT BENEFITS (Continued) The fair value of our defined benefit pension plan assets (including dividends and interest receivables of $310 million and $96 million for U.S. and non-U.S. plans, respectively) by asset category at December 31 was as follows (in millions):
| 2021
| U.S. Plans |  | Non-U.S. Plans
| Level 1 |  | Level 2 |  | Level 3 |  | Assets measured at NAV (a) |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Assets measured at NAV (a) |  | Total
Asset Category |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. companies | $ | 1,396 |  |  | $ | 20 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,416 |  |  | $ | 1,862 |  |  | $ | 48 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,910 |
International companies | 740 |  |  | 8 |  |  | 8 |  |  | — |  |  | 756 |  |  | 1,254 |  |  | 59 |  |  | — |  |  | — |  |  | 1,313 |
Total equity | 2,136 |  |  | 28 |  |  | 8 |  |  | — |  |  | 2,172 |  |  | 3,116 |  |  | 107 |  |  | — |  |  | — |  |  | 3,223 |
Fixed Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government and agencies | 9,660 |  |  | 1,687 |  |  | — |  |  | — |  |  | 11,347 |  |  | 47 |  |  | 13 |  |  | — |  |  | — |  |  | 60 |
Non-U.S. government | — |  |  | 1,230 |  |  | 12 |  |  | — |  |  | 1,242 |  |  | — |  |  | 20,338 |  |  | 123 |  |  | — |  |  | 20,461 |
Corporate bonds | — |  |  | 25,842 |  |  | — |  |  | — |  |  | 25,842 |  |  | — |  |  | 2,901 |  |  | 70 |  |  | — |  |  | 2,971 |
Mortgage/other asset-backed | — |  |  | 464 |  |  | — |  |  | — |  |  | 464 |  |  | — |  |  | 338 |  |  | 15 |  |  | — |  |  | 353 |
Commingled funds | — |  |  | 164 |  |  | — |  |  | — |  |  | 164 |  |  | — |  |  | 185 |  |  | — |  |  | — |  |  | 185 |
Derivative financial instruments, net | 1 |  |  | (19) |  |  | — |  |  | — |  |  | (18) |  |  | (1) |  |  | 23 |  |  | 28 |  |  | — |  |  | 50 |
Total fixed income | 9,661 |  |  | 29,368 |  |  | 12 |  |  | — |  |  | 39,041 |  |  | 46 |  |  | 23,798 |  |  | 236 |  |  | — |  |  | 24,080 |
Alternatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedge funds | — |  |  | — |  |  | — |  |  | 3,390 |  |  | 3,390 |  |  | — |  |  | — |  |  | — |  |  | 1,221 |  |  | 1,221 |
Private equity | 1 |  |  | — |  |  | — |  |  | 1,976 |  |  | 1,977 |  |  | — |  |  | — |  |  | — |  |  | 756 |  |  | 756 |
Real estate | — |  |  | — |  |  | — |  |  | 1,323 |  |  | 1,323 |  |  | — |  |  | — |  |  | — |  |  | 386 |  |  | 386 |
Total alternatives | 1 |  |  | — |  |  | — |  |  | 6,689 |  |  | 6,690 |  |  | — |  |  | — |  |  | — |  |  | 2,363 |  |  | 2,363 |
Cash, cash equivalents, and repurchase agreements (b) | (1,220) |  |  | — |  |  | — |  |  | — |  |  | (1,220) |  |  | (1,899) |  |  | — |  |  | — |  |  | — |  |  | (1,899) |
Other (c) | (774) |  |  | — |  |  | — |  |  | — |  |  | (774) |  |  | (466) |  |  | — |  |  | 5,784 |  |  | — |  |  | 5,318 |
Total assets at fair value | $ | 9,804 |  |  | $ | 29,396 |  |  | $ | 20 |  |  | $ | 6,689 |  |  | $ | 45,909 |  |  | $ | 797 |  |  | $ | 23,905 |  |  | $ | 6,020 |  |  | $ | 2,363 |  |  | $ | 33,085 |
__________ (a)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (b)Primarily short-term investment funds to provide liquidity to plan investment managers, cash held to pay benefits, and repurchase agreements valued at $2.9 billion in U.S. plans and $2.6 billion in non-U.S. plans. (c)For U.S. plans, amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). For non-U.S plans, $4.7 billion of insurance contracts, primarily Ford-Werke, and amounts related to net pending security (purchases)/sales and net pending foreign currency purchases/(sales). NOTE 17. RETIREMENT BENEFITS (Continued) The following table summarizes the changes in Level 3 defined benefit pension plan assets measured at fair value on a recurring basis for the years ended December 31 (in millions):
| 2020
|  | Return on plan assets |  |  |  |  |  |
| Fair Value at January 1 |  | Attributable to Assets Held at December 31 |  | Attributable to Assets Sold |  | Net Purchases/ (Settlements) |  | Transfers Into/ (Out of) Level 3 |  | Fair Value at December 31
U.S. Plans | $ | 17 |  |  | $ | (2) |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 16 |
Non-U.S. Plans (a) | 5,572 |  |  | 473 |  |  | 1 |  |  | 1 |  |  | (41) |  |  | 6,006 |
| 2021
|  | Return on plan assets |  |  |  |  |  |
| Fair Value at January 1 |  | Attributable to Assets Held at December 31 |  | Attributable to Assets Sold |  | Net Purchases/ (Settlements) |  | Transfers Into/ (Out of) Level 3 |  | Fair Value at December 31
U.S. Plans | $ | 16 |  |  | $ | (2) |  |  | $ | — |  |  | $ | 5 |  |  | $ | 1 |  |  | $ | 20 |
Non-U.S. Plans (a) | 6,006 |  |  | (943) |  |  | 153 |  |  | 687 |  |  | 117 |  |  | 6,020 |
__________ (a)Non-U.S. plans, insurance contracts, primarily Ford-Werke plan, valued at $5 billion and $4.7 billion at year-end 2020 and 2021, respectively.

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