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Employee Benefits | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Employee Benefits | 20. Employee Benefits PENSION PLANS We offer various defined benefit plans to eligible employees. Effective January 1, 2016, the U.S. defined benefit pension plans were frozen. Consequently, these plans are closed to new participants and current participants no longer earn benefits. The U.S. AIG Retirement Plan (the qualified plan) is a noncontributory defined benefit plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). In 2012, the qualified plan was converted to a cash balance formula comprised of pay credits based on 6% of a plan participant’s annual compensation (subject to IRS limitations) and annual interest credits. Although benefits are frozen, these interest credits continue to accrue on the cash balance accounts of active participants, who also accrue years of service for purposes of early retirement eligibility and subsidies. Employees can take their vested benefits as a lump sum or an annuity option when they leave AIG or are terminated from the plan. Employees satisfying certain age and service requirements (i.e., grandfathered employees) remain covered under the average pay formula that was in effect prior to the conversion. The final average pay formula is based upon a percentage of final average compensation multiplied by years of credited service, up to 44 years. Grandfathered employees will receive the higher of the benefit under the cash balance formula or the final average pay formula at retirement. In the U.S. we also sponsor non-qualified unfunded defined benefit plans, such as the AIG Non-Qualified Retirement Income Plan (AIG NQRIP) for certain employees, including key executives, designed to supplement pension benefits provided by the qualified plan. The AIG NQRIP provides a benefit equal to the reduction in benefits under the qualified plan as a result of federal tax limitations on compensation and benefits payable. Non-U.S. defined benefit plans generally are either based on the employee’s years of credited service and compensation in the years preceding retirement or on points accumulated based on the employee’s job grade and other factors during each year of service. POSTRETIREMENT PLANS U.S. postretirement medical and life insurance benefits are based upon the employee attaining the age of 55 and having a minimum of ten years of service, which was reduced to 5 years in 2019 for medical coverage only. Eligible employees who have medical coverage can enroll in retiree medical upon termination of employment. Medical benefits are contributory, while the life insurance benefits, which are closed to new employees, are generally non-contributory. Retiree medical contributions vary from none for pre-1989 retirees to actual premium payments reduced by certain subsidies for post-1992 retirees. These retiree contributions are subject to annual adjustments. Other cost sharing features of the medical plan include deductibles, coinsurance, Medicare coordination, and an employer subsidy for grandfathered employees only. Postretirement benefits are offered in certain non-U.S. countries and vary by geographic location. The following table presents the funded status of the plans reconciled to the amount reported in the Consolidated Balance Sheets.
As of or for the Years Ended | Pension |  | Postretirement
December 31, | U.S. Plans(a) |  | Non-U.S. Plans(a) |  | U.S. Plans |  | Non-U.S. Plans
(in millions) |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |  | 2024 |  | 2023
Change in projected benefit obligation: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation, beginning of year | $ | 3,301 |  | $ | 3,475 |  |  | $ | 804 |  | $ | 810 |  |  | $ | 97 |  | $ | 99 |  |  | $ | 31 |  | $ | 32 |
Service cost |  | 4 |  |  | 5 |  |  |  | 14 |  |  | 16 |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Interest cost |  | 154 |  |  | 168 |  |  |  | 20 |  |  | 20 |  |  |  | 4 |  |  | 5 |  |  |  | 2 |  |  | 2 |
Actuarial (gain) loss(b) |  | (200) |  |  | 75 |  |  |  | 14 |  |  | (8) |  |  |  | (4) |  |  | 3 |  |  |  | — |  |  | (2) |
Benefits paid: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AIG assets |  | (17) |  |  | (16) |  |  |  | (9) |  |  | (10) |  |  |  | (10) |  |  | (10) |  |  |  | (1) |  |  | (1) |
Plan assets |  | (280) |  |  | (171) |  |  |  | (28) |  |  | (31) |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Plan amendment |  | — |  |  | — |  |  |  | 1 |  |  | (1) |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Settlements |  | — |  |  | (234) |  |  |  | (9) |  |  | (1) |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Foreign exchange effect |  | — |  |  | — |  |  |  | (60) |  |  | 9 |  |  |  | — |  |  | — |  |  |  | (2) |  |  | — |
Other |  | — |  |  | (1) |  |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Projected benefit obligation, end of year | $ | 2,962 |  | $ | 3,301 |  |  | $ | 747 |  | $ | 804 |  |  | $ | 87 |  | $ | 97 |  |  | $ | 30 |  | $ | 31 |
As of or for the Years Ended | Pension |  | Postretirement
December 31, | U.S. Plans(a) |  | Non-U.S. Plans(a) |  | U.S. Plans |  | Non-U.S. Plans
(in millions) |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |  | 2024 |  | 2023
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of year | $ | 3,228 |  | $ | 3,345 |  |  | $ | 734 |  | $ | 709 |  |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |
Actual return on plan assets, net of expenses |  | 28 |  |  | 288 |  |  |  | 35 |  |  | 15 |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
AIG contributions |  | 17 |  |  | 16 |  |  |  | 42 |  |  | 47 |  |  |  | 10 |  |  | 10 |  |  |  | 1 |  |  | 1 |
Benefits paid: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AIG assets |  | (17) |  |  | (16) |  |  |  | (9) |  |  | (10) |  |  |  | (10) |  |  | (10) |  |  |  | (1) |  |  | (1) |
Plan assets |  | (280) |  |  | (171) |  |  |  | (28) |  |  | (31) |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Settlements |  | — |  |  | (234) |  |  |  | (9) |  |  | (1) |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Foreign exchange effect |  | — |  |  | — |  |  |  | (61) |  |  | 5 |  |  |  | — |  |  | — |  |  |  | — |  |  | — |
Fair value of plan assets, end of year | $ | 2,976 |  | $ | 3,228 |  |  | $ | 704 |  | $ | 734 |  |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |
Funded status, end of year | $ | 14 |  | $ | (73) |  |  | $ | (43) |  | $ | (70) |  |  | $ | (87) |  | $ | (97) |  |  | $ | (30) |  | $ | (31) |
Amounts recognized in the balance sheet: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets | $ | 184 |  | $ | 110 |  |  | $ | 122 |  | $ | 97 |  |  | $ | — |  | $ | — |  |  | $ | — |  | $ | — |
Liabilities |  | (170) |  |  | (183) |  |  |  | (165) |  |  | (167) |  |  |  | (87) |  |  | (97) |  |  |  | (30) |  |  | (31) |
Total amounts recognized | $ | 14 |  | $ | (73) |  |  | $ | (43) |  | $ | (70) |  |  | $ | (87) |  | $ | (97) |  |  | $ | (30) |  | $ | (31) |
Pre-tax amounts recognized in AOCI: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gain (loss) | $ | (1,082) |  | $ | (1,142) |  |  | $ | (72) |  | $ | (79) |  |  | $ | 28 |  | $ | 28 |  |  | $ | 21 |  | $ | 23 |
Prior service (cost) credit |  | — |  |  | — |  |  |  | (18) |  |  | (21) |  |  |  | — |  |  | — |  |  |  | — |  |  | 1 |
Total amounts recognized | $ | (1,082) |  | $ | (1,142) |  |  | $ | (90) |  | $ | (100) |  |  | $ | 28 |  | $ | 28 |  |  | $ | 21 |  | $ | 24 |
(a)Includes non-qualified unfunded plans of which the aggregate projected benefit obligation was $170 million and $184 million for the U.S. at December 31, 2024 and 2023, respectively, and $139 million and $140 million for the non-U.S. at December 31, 2024 and 2023, respectively. (b)The primary reason for the significant gain in 2024 is due to a change in the discount rate for the U.S. AIG Retirement Plan. The following table presents the accumulated benefit obligations for U.S. and non-U.S. pension benefit plans:
At December 31, |  |  |  |
(in millions) |  | 2024 |  | 2023
U.S. pension benefit plans | $ | 2,962 |  | $ | 3,301 |
Non-U.S. pension benefit plans | $ | 735 |  | $ | 792 |
Defined benefit plan obligations in which the projected benefit obligation (PBO) was in excess of the related plan assets and the accumulated benefit obligation (ABO) was in excess of the related plan assets were as follows:
At December 31, |  | PBO Exceeds Fair Value of Plan Assets |  |  | ABO Exceeds Fair Value of Plan Assets
|  | U.S. Plans |  |  | Non-U.S. Plans |  |  | U.S. Plans |  |  | Non-U.S. Plans
(in millions) |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |  | 2024 |  | 2023 |  |  | 2024 |  | 2023
Projected benefit obligation |  | $ | 170 |  |  | $ | 184 |  |  |  | $ | 287 |  |  | $ | 287 |  |  |  | $ | — |  |  | $ | — |  |  |  | $ | — |  |  | $ | — |
Accumulated benefit obligation |  | — |  |  | — |  |  |  | — |  |  | — |  |  |  | 170 |  |  | 184 |  |  |  | 245 |  |  | 245 |
Fair value of plan assets |  | — |  |  | — |  |  |  | 91 |  |  | 88 |  |  |  | — |  |  | — |  |  |  | 91 |  |  | 88 |
The following table presents the components of net periodic benefit cost with respect to pensions and other postretirement benefits:
Years Ended December 31, | Pension |  | Postretirement
| U.S. Plans |  | Non-U.S. Plans |  | U.S. Plans |  | Non-U.S. Plans
(in millions) |  | 2024 |  | 2023 |  | 2022 |  |  | 2024 |  | 2023 |  | 2022 |  |  | 2024 |  | 2023 |  | 2022 |  |  | 2024 |  | 2023 |  | 2022
Components of net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost* | $ | 4 |  | $ | 5 |  | $ | 6 |  |  | $ | 14 |  | $ | 16 |  | $ | 18 |  |  | $ | — |  | $ | — |  | $ | 1 |  |  | $ | — |  | $ | — |  | $ | — |
Interest cost |  | 154 |  |  | 168 |  |  | 109 |  |  |  | 20 |  |  | 20 |  |  | 9 |  |  |  | 4 |  |  | 5 |  |  | 3 |  |  |  | 2 |  |  | 2 |  |  | 1 |
Expected return on assets |  | (201) |  |  | (193) |  |  | (213) |  |  |  | (19) |  |  | (21) |  |  | (16) |  |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |
Amortization of prior service cost (credit) |  | — |  |  | — |  |  | — |  |  |  | 2 |  |  | 3 |  |  | 3 |  |  |  | — |  |  | — |  |  | — |  |  |  | (1) |  |  | (1) |  |  | (1) |
Amortization of net (gain) loss |  | 33 |  |  | 33 |  |  | 24 |  |  |  | 2 |  |  | 2 |  |  | 4 |  |  |  | (4) |  |  | (5) |  |  | — |  |  |  | (2) |  |  | (3) |  |  | (1) |
Net periodic benefit cost (credit) | $ | (10) |  | $ | 13 |  | $ | (74) |  |  | $ | 19 |  | $ | 20 |  | $ | 18 |  |  | $ | — |  | $ | — |  | $ | 4 |  |  | $ | (1) |  | $ | (2) |  | $ | (1) |
Settlement loss |  | — |  |  | 71 |  |  | 59 |  |  |  | 1 |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |
Net benefit cost (credit) | $ | (10) |  | $ | 84 |  | $ | (15) |  |  | $ | 20 |  | $ | 20 |  | $ | 18 |  |  | $ | — |  | $ | — |  | $ | 4 |  |  | $ | (1) |  | $ | (2) |  | $ | (1) |
Total recognized in AOCI | $ | 60 |  | $ | 137 |  | $ | (117) |  |  | $ | 11 |  | $ | 6 |  | $ | 54 |  |  | $ | (1) |  | $ | (8) |  | $ | 33 |  |  | $ | (2) |  | $ | (2) |  | $ | 13 |
Total recognized in net periodic benefit cost and other comprehensive income (loss) | $ | 70 |  | $ | 53 |  | $ | (102) |  |  | $ | (9) |  | $ | (14) |  | $ | 36 |  |  | $ | (1) |  | $ | (8) |  | $ | 29 |  |  | $ | (1) |  | $ | — |  | $ | 14 |
*Reflects administrative fees for the U.S. pension plans. Interest cost for pension and postretirement benefits for our U.S. plans and largest non-U.S. plans is measured using the spot rate approach, which applies specific spot rates along the yield curve to a plan’s corresponding discounted cash flows that comprise the obligation. This method provides a more precise measurement of interest cost by aligning the timing of the plans’ discounted cash flows to the corresponding spot rates on the yield curve. For certain non-U.S. plans, interest cost is measured utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligations. A 100 basis point increase in the expected long-term rate of return would decrease the 2025 pension expense by approximately $35 million with all other items remaining the same. A 100 basis point increase in the discount rate would increase the 2025 pension expense by approximately $2 million. Conversely, a 100 basis point decrease in the discount rate would decrease the 2024 pension expense by approximately $3 million while a 100 basis point decrease in the expected long-term rate of return would increase the 2025 pension expense by approximately $35 million, with all other items remaining the same. ASSUMPTIONS The following table summarizes the weighted average assumptions used to determine the benefit obligations:
| Pension |  | Postretirement
| U.S. Plans |  | Non-U.S. Plans(a) |  |  | U.S. Plans | Non-U.S. Plans(a)
December 31, 2024 |  |  |  |  |  |  |
Discount rate | 5.57 | % |  | 2.87 | % |  |  | 5.53 | % | 4.97 | %
Interest crediting rate | 4.37 | % |  | 1.36 | % | (b) |  | N/A | N/A
Rate of compensation increase | N/A | (c) | 2.43 | % |  |  | N/A | N/A
December 31, 2023 |  |  |  |  |  |  |
Discount rate | 4.98 | % |  | 2.85 | % |  |  | 4.97 | % | 5.37 | %
Interest crediting rate | 4.94 | % |  | 1.40 | % | (b) |  | N/A | N/A
Rate of compensation increase | N/A | (c) | 2.42 | % |  |  | N/A | N/A
(a)The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such benefits. (b)Represents the weighted average interest crediting rate of non-U.S. cash balance plans primarily in Japan and Switzerland. (c)Compensation increases are no longer applicable as the plan is frozen effective January 1, 2016. The following table summarizes assumed health care cost trend rates for the U.S. plans:
At December 31, | 2024 | 2023
Following year: |  |
Medical (before age 65) | — | % | 5.78 | %
Medical (age 65 and older) | 6.67 | % | 4.93 | %
Ultimate rate to which cost increase is assumed to decline | 4.00 | % | 4.00 | %
Year in which the ultimate trend rate is reached: |  |
Medical (before age 65) | 2048 | 2046
Medical (age 65 and older) | 2048 | 2046
The following table presents the weighted average assumptions used to determine the net periodic benefit costs:
| Pension |  | Postretirement
| U.S. Plans | Non-U.S. Plans(a) |  |  | U.S. Plans | Non-U.S. Plans(a)
For the Year Ended December 31, 2024 |  |  |  |  |  |
Discount rate | 4.98 | % | 2.85 | % |  |  | 4.96 | % | 5.37 | %
Interest crediting rate | 4.94 | % | 1.40 | % | (b) |  | N/A | N/A
Rate of compensation increase | N/A | 2.42 | % |  |  | N/A | N/A
Expected return on assets | 6.50 | % | 2.77 | % |  |  | N/A | N/A
For the Year Ended December 31, 2023 |  |  |  |  |  |
Discount rate | 5.22 | % | 2.51 | % |  |  | 5.19 | % | 5.23 | %
Interest crediting rate | 4.02 | % | 1.07 | % | (b) |  | — | % | N/A
Rate of compensation increase | N/A | 2.38 | % |  |  | N/A | N/A
Expected return on assets | 6.25 | % | 2.67 | % |  |  | — | % | N/A
For the Year Ended December 31, 2022 |  |  |  |  |  |
Discount rate | 2.75 | % | 1.09 | % |  |  | 2.87 | % | 2.89 | %
Interest crediting rate | 2.06 | % | 0.70 | % | (b) |  | N/A | N/A
Rate of compensation increase | N/A | 2.40 | % |  |  | N/A | N/A
Expected return on assets | 4.65 | % | 1.84 | % |  |  | N/A | N/A
(a)The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such benefits. (b)Represents the weighted average interest crediting rate of non-U.S. cash balance plans primarily in Japan and Switzerland. Discount Rate Methodology The projected benefit cash flows under the U.S. AIG Retirement Plan were discounted using the spot rates derived from the Mercer U.S. Pension Discount Yield Curve (Mercer Yield Curve) at December 31, 2024 and 2023, which resulted in a single discount rate that would produce the same liability at the respective measurement dates. The discount rates were 5.57 percent at December 31, 2024 and 4.98 percent at December 31, 2023. The methodology was consistently applied for the respective years in determining the discount rates for the other U.S. pension plans. In general, the discount rates for the non-U.S. plans were developed using a similar methodology to the U.S. AIG Retirement Plan, by using country-specific Mercer Yield Curves. The projected benefit obligation for AIG’s Japan pension plans represents approximately 50 percent and 54 percent of the total projected benefit obligations for our non-U.S. pension plans at December 31, 2024 and 2023, respectively. The weighted average discount rate of 1.81 percent and 1.48 percent at December 31, 2024 and 2023, respectively, was selected by reference to the Mercer Yield Curve for Japan. Plan Assets The investment strategy with respect to assets relating to our U.S. and non-U.S. pension plans is designed to achieve investment returns that will provide for the benefit obligations of the plans over the long term, limit the risk of short-term funding shortfalls and maintain liquidity sufficient to address cash needs. Accordingly, the asset allocation strategy is designed to maximize the investment rate of return while managing various risk factors, including, but not limited to, volatility relative to the benefit obligations, liquidity, and concentration, and incorporates the risk/return profile applicable to each asset class. There were no shares of AIG Common Stock included in the U.S. and non-U.S. pension plans assets at December 31, 2024 or 2023. U.S. Pension Plan The assets of the qualified plan are monitored by the AIG U.S. Investment Committee and actively managed by the investment managers, which involves allocating the plan’s assets among approved asset classes within ranges as permitted by the strategic allocation. The long-term strategic asset allocation historically has been reviewed and revised approximately every three years. The investment strategy is focused on de-risking the qualified plan via regular monitoring through liability driven investing and the glide path approach, where the glide path defines the target allocation for the “Return-Seeking” portion of the portfolio (i.e., growth assets) based on the funded ratio and level of interest rates. Under this approach, the allocation to growth assets is reduced and the allocation to liability-hedging assets is increased as the plan’s funded ratio increases in accordance with the defined glide path. The following table presents the asset allocation percentage by major asset class for the U.S. qualified plan and the target allocation for 2025 based on the plan’s funded status at December 31, 2024:
At December 31, | Target 2025 |  | Actual 2024 |  | Actual 2023
Asset class: |  |  |  |  |
Equity securities | 9 | % |  | 13 | % |  | 8 | %
Fixed maturity securities | 80 |  |  | 72 |  |  | 77 |
Other investments | 11 |  |  | 15 |  |  | 15 |
Total | 100 | % |  | 100 | % |  | 100 | %
The expected weighted average long-term rate of return for the plan was 6.50 percent and 6.25 percent for 2024 and 2023, respectively. The expected weighted average rate of return is an aggregation of expected returns within each asset class category, weighted for the investment mix of the assets. The combination of the expected asset return and any contributions made by us are expected to maintain the plan’s ability to meet all required benefit obligations. The expected asset return for each asset class was developed based on an approach that considers key fundamental drivers of the asset class returns in addition to historical returns, current market conditions, asset volatility and the expectations for future market returns. Non-U.S. Pension Plans The assets of the non-U.S. pension plans are held in various trusts in multiple countries and are invested primarily in equities and fixed maturity securities to maximize the long-term return on assets for a given level of risk. The following table presents the asset allocation percentage by major asset class for non-U.S. pension plans and the target allocation:
At December 31, | Target 2025 |  | Actual 2024 |  | Actual 2023
Asset class: |  |  |  |  |
Equity securities | 20 | % |  | 20 | % |  | 19 | %
Fixed maturity securities | 58 |  |  | 47 |  |  | 45 |
Other investments | 18 |  |  | 24 |  |  | 21 |
Cash and cash equivalents | 4 |  |  | 9 |  |  | 15 |
Total | 100 | % |  | 100 | % |  | 100 | %
The assets of AIG’s Japan pension plans represent approximately 66 percent and 67 percent of total non-U.S. pension plan assets at December 31, 2024 and 2023, respectively. The expected long-term rate of return was 1.85 percent for both 2024 and 2023, and is evaluated by the Japanese Pension Investment Committee on a quarterly and annual basis along with various investment managers and is revised to achieve the optimal allocation to meet targeted funding levels if necessary. In addition, the funding policy is revised in accordance with local regulation every five years. The expected weighted average long-term rate of return for all our non-U.S. pension plans was 2.77 percent and 2.67 percent for the years ended December 31, 2024 and 2023, respectively. It is an aggregation of expected returns within each asset class that was generally developed based on the building block approach that considers historical returns, current market conditions, asset volatility and the expectations for future market returns. ASSETS MEASURED AT FAIR VALUE The following table presents information about our plan assets and indicates the level of the fair value measurement based on the observability of the inputs used. The inputs and methodology used in determining the fair value of these assets are consistent with those used to measure our assets as discussed in Note 5 to the Consolidated Financial Statements.
| U.S. Plans |  | Non-U.S. Plans
(in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 52 |  | $ | — |  | $ | — |  | $ | 52 |  |  | $ | 66 |  | $ | — |  | $ | — |  | $ | 66 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S.(a) |  | 163 |  |  | — |  |  | — |  |  | 163 |  |  |  | — |  |  | — |  |  | — |  |  | — |
International(b) |  | 4 |  |  | — |  |  | — |  |  | 4 |  |  |  | 82 |  |  | 55 |  |  | — |  |  | 137 |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. investment grade(c) |  | 22 |  |  | 1,996 |  |  | 5 |  |  | 2,023 |  |  |  | — |  |  | — |  |  | — |  |  | — |
International investment grade(c) |  | — |  |  | 101 |  |  | — |  |  | 101 |  |  |  | — |  |  | 146 |  |  | — |  |  | 146 |
U.S. and international high yield(d) |  | — |  |  | (40) |  |  | — |  |  | (40) |  |  |  | — |  |  | 185 |  |  | — |  |  | 185 |
Mortgage and other asset-backed securities |  | — |  |  | 54 |  |  | 1 |  |  | 55 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Other fixed maturity securities |  | — |  |  | 9 |  |  | — |  |  | 9 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Other investment types(e): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Futures |  | (7) |  |  | — |  |  | — |  |  | (7) |  |  |  | — |  |  | — |  |  | — |  |  | — |
Insurance contracts |  | — |  |  | 8 |  |  | — |  |  | 8 |  |  |  | — |  |  | — |  |  | 161 |  |  | 161 |
Mutual funds(f) |  | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 9 |  |  | — |  |  | 9 |
Total | $ | 234 |  | $ | 2,128 |  | $ | 6 |  | $ | 2,368 |  |  | $ | 148 |  | $ | 395 |  | $ | 161 |  | $ | 704 |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 54 |  | $ | — |  | $ | — |  | $ | 54 |  |  | $ | 108 |  | $ | — |  | $ | — |  | $ | 108 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S.(a) |  | 140 |  |  | — |  |  | — |  |  | 140 |  |  |  | — |  |  | — |  |  | — |  |  | — |
International(b) |  | 4 |  |  | — |  |  | — |  |  | 4 |  |  |  | 104 |  |  | 35 |  |  | — |  |  | 139 |
Fixed maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. investment grade(c) |  | 24 |  |  | 2,230 |  |  | 10 |  |  | 2,264 |  |  |  | — |  |  | — |  |  | — |  |  | — |
International investment grade(c) |  | — |  |  | 125 |  |  | — |  |  | 125 |  |  |  | — |  |  | 138 |  |  | — |  |  | 138 |
U.S. and international high yield(d) |  | — |  |  | 33 |  |  | — |  |  | 33 |  |  |  | — |  |  | 192 |  |  | — |  |  | 192 |
Mortgage and other asset-backed securities |  | — |  |  | 59 |  |  | 1 |  |  | 60 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Other fixed maturity securities |  | — |  |  | 12 |  |  | — |  |  | 12 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Other investment types(e): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Futures |  | 10 |  |  | — |  |  | — |  |  | 10 |  |  |  | — |  |  | — |  |  | — |  |  | — |
Insurance contracts |  | — |  |  | 9 |  |  | — |  |  | 9 |  |  |  | — |  |  | — |  |  | 138 |  |  | 138 |
Mutual funds(f) |  | — |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  | 19 |  |  | — |  |  | 19 |
Total | $ | 232 |  | $ | 2,468 |  | $ | 11 |  | $ | 2,711 |  |  | $ | 212 |  | $ | 384 |  | $ | 138 |  | $ | 734 |
(a)Includes passive and active U.S. equity strategies. (b)Includes passive and active international equity strategies. (c)Includes investments in U.S. and non-U.S. government issued bonds, U.S. government agency or sponsored agency bonds, and investment grade corporate bonds. (d)Consists primarily of investments in securities or debt obligations that have a rating below investment grade. (e)Excludes investments that are measured at fair value using the NAV per share (or its equivalent), which totaled $608 million and $517 million at December 31, 2024 and 2023, respectively. (f)Comprised of mutual fund investing in variety of equity, derivatives, and bonds. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. Based on our investment strategy, we had no significant concentrations of risks at December 31, 2024. Changes in Level 3 Fair Value Measurements The following table presents changes in our U.S. and non-U.S. Level 3 plan assets measured at fair value:
December 31, 2024 | Balance Beginning of year | Net Realized and Unrealized Gains (Losses) | Purchases | Sales | Issuances | Settlements | Transfers In | Transfers Out | Balance at End of Year | Changes in Unrealized Gains (Losses) on Instruments Held at End of Year | Changes in Unrealized Gains (Losses) included in other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year
(in millions)
U.S. Plan Assets: |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |
U.S. investment grade | $ | 10 |  | $ | (1) |  | $ | — |  | $ | (3) |  | $ | — |  | $ | — |  | $ | — |  | $ | (1) |  | $ | 5 |  | $ | — |  |  | $ | — |
Mortgage and other asset backed securities | 1 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 1 |  | — |  |  | — |
Total | $ | 11 |  | $ | (1) |  | $ | — |  | $ | (3) |  | $ | — |  | $ | — |  | $ | — |  | $ | (1) |  | $ | 6 |  | $ | — |  |  | $ | — |
Non-U.S. Plan Assets: |  |  |  |  |  |  |  |  |  |  |  |
Insurance contracts | $ | 138 |  | $ | 21 |  | $ | 2 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 161 |  | $ | — |  |  | $ | — |
Total | $ | 138 |  | $ | 21 |  | $ | 2 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 161 |  | $ | — |  |  | $ | — |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
U.S. Plan Assets: |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturity securities |  |  |  |  |  |  |  |  |  |  |  |
U.S. investment grade | $ | 10 |  | $ | 1 |  | $ | — |  | $ | (1) |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 10 |  | $ | 1 |  |  | $ | — |
Mortgage and other asset backed securities | 5 |  | — |  | — |  | (4) |  | — |  | — |  | — |  | — |  | 1 |  | 1 |  |  | — |
Direct private equity | 5 |  | (5) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | (5) |  |  | — |
Total | $ | 20 |  | $ | (4) |  | $ | — |  | $ | (5) |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 11 |  | $ | (3) |  |  | $ | — |
Non-U.S. Plan Assets: |  |  |  |  |  |  |  |  |  |  |  |
Insurance contracts | $ | 132 |  | $ | 6 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 138 |  | $ | — |  |  | $ | — |
Total | $ | 132 |  | $ | 6 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 138 |  | $ | — |  |  | $ | — |
EXPECTED CASH FLOWS Funding for the qualified plan ranges from the minimum amount required by ERISA to the maximum amount that would be deductible for U.S. tax purposes. Contributed amounts in excess of the minimum amounts are deemed voluntary. Amounts in excess of the maximum amount would be subject to an excise tax and may not be deductible under the Internal Revenue Code. There are no minimum required cash contributions in 2024 for the U.S. AIG Retirement Plan. The non-qualified and postretireme nt plans’ benefit payments are deductible when paid to participants. Our annual pension contribution in 2025 is expected to be approximately $53 million for our U.S. and non-U.S. pension plans. This estimate is subject to change, since contribution decisions are affected by various factors including our liquidity, market performance and management’s discretion. The expected future benefit payments, net of participants’ contributions, with respect to the defined benefit pension plans and other postretirement benefit plans, are as follows:
| Pension |  | Postretirement
(in millions) | U.S. Plans | Non-U.S. Plans |  | U.S. Plans | Non-U.S. Plans
2025 | $ | 261 |  | $ | 39 |  |  | $ | 8 |  | $ | 1 |
2026 | 254 |  | 43 |  |  | 7 |  | 1 |
2027 | 262 |  | 44 |  |  | 7 |  | 2 |
2028 | 255 |  | 49 |  |  | 7 |  | 2 |
2029 | 259 |  | 47 |  |  | 7 |  | 2 |
2030-2034 | 1,138 |  | 235 |  |  | 32 |  | 9 |
DEFINED CONTRIBUTION PLANS AIG Parent sponsors several defined contribution plans for U.S. employees that provide for pre-tax salary reduction contributions by employees. The most significant plan is the AIG Incentive Savings Plan (ISP), for which the matching contribution is 100 percent of the first 6% of a participant’s contributions, subject to the IRS-imposed limitations. Participants in the AIG ISP receive an additional fully vested, non-elective, non-discretionary contribution equal to 3% of the participant’s eligible compensation for the plan year, paid each pay period regardless of whether the participant currently contributes to the plan, and subject to the IRS-imposed limitations. Our pre-tax expenses associated with these plans were $87 million,$95 million and $100 million in 2024, 2023 and 2022, respectively.

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