v3.25.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Defined Benefit Pension Plans
We sponsor both funded and unfunded defined benefit pension plans for some employees in the U.S. These pension plans include qualified plans that are eligible for beneficial treatment under the Internal Revenue Code and non-qualified plans that provide additional benefits for employees who are impacted by limitations on compensation eligible for benefits available under the qualified plans. We also maintain a defined benefit pension plan for one of our foreign subsidiaries that is excluded from the disclosures below due to immateriality.
We measure defined benefit pension plan obligations based on the present value of projected future benefit payments for all participants for services rendered to date. The projected benefit obligation is a measure of benefits attributed to service to date, assuming that the plan continues in effect and that estimated future events (including turnover and mortality) occur. We determine the net periodic benefit costs using assumptions regarding the projected benefit obligation and the fair value of plan assets as of the beginning of the year. Net periodic benefit costs are recorded in Other income on our Consolidated Statements of Income. We calculate the funded status of the defined benefit pension plans, which represents the difference between the projected benefit obligation and the fair value of plan assets, on a plan-by-plan basis.
Funded Status of Defined Benefit Pension Plans
The reconciliation of the changes in the plans’ projected benefit obligations as of December 31 was as follows:
(In millions)20252024
Projected benefit obligation at beginning of year$1,338 $1,466 
Interest cost68 72 
Plan amendment— (3)
Actuarial (gain) loss27 (59)
Benefits paid(104)(137)
Projected benefit obligation at end of year$1,329 $1,338 
The actuarial loss in 2025 was a result of assumption changes, including a decrease in the discount rate and other assumptions for plan participants. The actuarial gain in 2024 was a result of assumption changes, including an increase in the discount rate and other assumptions for plan participants.
The reconciliation of the changes in the fair value of plan assets as of December 31 was as follows:
(In millions)20252024
Fair value of plan assets at beginning of year$1,392 $1,507 
Actual return on plan assets130 17 
Employer contributions to non-qualified plans5 5 
Benefits paid(104)(137)
Fair value of plan assets at end of year$1,423 $1,392 
The funded status of the plans as of December 31 was as follows:
(In millions)20252024
Funded status at end of year$93 $54 
Amount recognized in balance sheet:
Long-term assets$142 $104 
Current liabilities(5)(5)
Long-term liabilities(44)(45)
Net pension asset recognized$93 $54 
Plans with projected and accumulated benefit obligation in excess of plan assets:
Projected and accumulated benefit obligation (1)
$49 $50 
(1)    Relates to our non-qualified plans which are unfunded.
The funded status of our qualified plans and non-qualified plans was $142 million and $(49) million, respectively, as of December 31, 2025.
The actuarial loss included in AOCI that has not yet been recognized in net periodic benefit expense was $167 million and $195 million as of December 31, 2025 and 2024, respectively.
The net periodic benefit cost and amounts recognized in Other comprehensive income (loss) for the years ended December 31 was as follows:
(In millions)202520242023
Net periodic benefit income:
Interest cost$68 $72 $74 
Expected return on plan assets(77)(98)(92)
Amortization of actuarial loss3 1 — 
Net periodic benefit income$(6)$(25)$(18)
Amounts recognized in Other comprehensive income (loss):
Actuarial loss (gain)$(26)$23 $32 
Prior-service cost— (3)— 
Amortization of actuarial loss(3)(1)— 
Loss (gain) recognized in Other comprehensive income (loss)$(28)$19 $32 
The weighted-average assumptions used to determine the net periodic benefit costs and benefit obligations for the year ended December 31 were as follows:
Qualified PlansNon-Qualified Plans
202520242023202520242023
Discount rate - net periodic benefit costs5.33 %5.08 %
5.36%
4.99% - 5.25%
5.02% - 5.05%
5.26% - 5.33%
Discount rate - benefit obligations5.40 %5.63 %
5.15%
4.60% - 5.20%
5.21% - 5.55%
4.98% - 5.12%
Expected long-term rate of return on plan assets5.75 %6.75 %
6.40%
No rate of compensation increase was assumed as the plans are frozen to additional participant benefit accruals.
We use a full yield curve approach to estimate the interest cost component of net periodic benefit cost by applying specific spot rates along the yield curve used to determine the benefit obligation to each of the underlying projected cash flows based on time until payment.
Expected benefit payments for the defined benefit pension plans for the years ended December 31 are summarized below. These estimates are based on assumptions about future events. Actual benefit payments may vary from these estimates.
(In millions)202620272028202920302031-2035
Expected benefit payments$110 $109 $109 $108 $107 $511 
Plan Assets
We manage the assets in the U.S. plans using a long-term liability-driven investment strategy that seeks to mitigate the funded status volatility by increasing participation in fixed income investments as the plan’s funded status increases. We developed this strategy by analyzing a variety of diversified asset-class combinations with the projected liabilities.
Our current investment strategy is to achieve an investment mix of approximately 95% in fixed income securities and 5% of investments in equity securities. The fixed income allocation consists primarily of domestic fixed income securities and targets to hedge approximately 100% of projected liabilities. The target allocations for equity securities includes approximately 60% in U.S. equities and approximately 40% in non-U.S. equities. Investments in equity and fixed income securities consist of individual securities held in managed separate accounts and commingled investment funds. Generally, our investment strategy does not include an allocation to cash and cash equivalents, but a cash allocation may arise periodically in response to timing considerations regarding contributions, investments, and the payment of benefits and eligible plan expenses. We periodically evaluate our defined benefit plans’ asset portfolios for significant concentrations of risk. Types of investment concentration risks that are evaluated include concentrations in a single issuer, specific security, asset class, credit rating, duration, industry/sector, currency, foreign country or individual fund manager. As of December 31, 2025, our defined benefit plan assets had no significant concentrations of risk.
Our investment policy does not allow investment managers to use market-timing strategies or financial derivative instruments for speculative purposes, but financial derivative instruments are used to manage risk and achieve stated investment objectives for duration, yield curve, credit, foreign exchange and equity exposures. Generally, our investment managers are prohibited from short selling, trading on margin, and trading commodities, warrants or other options, except when acquired as a result of the purchase of another security, or in the case of options, when sold as part of a covered position.
The assumption of 5.75% for the overall expected long-term rate of return on plan assets in 2025 was developed using asset allocation and return expectations. The return expectations are created using long-term historical and expected returns for the various asset classes and current market expectations for inflation, interest rates and economic growth.
The fair values of investments held in the qualified pension plans by major asset category as of December 31, 2025 and 2024, and the percentage that each asset category comprises of total plan assets were as follows:
(Dollars in millions)Level 1Level 2
Not Subject to Leveling (1)
TotalPercentage of Plan Assets
December 31, 2025
Cash and cash equivalents$28 $— $— $28 2.0 %
Equity:
U.S.— 43 — 43 3.0 %
International— 31 — 31 2.2 %
Fixed income securities243 943 119 1,305 91.7 %
Derivatives— 16 — 16 1.1 %
Total plan assets$271 $1,033 $119 $1,423 100.0 %
December 31, 2024
Cash and cash equivalents$20 $— $— $20 1.4 %
Equity:
U.S. large companies— 56 — 56 4.0 %
U.S. small companies— 14 — 14 1.0 %
International20 27 7 54 3.9 %
Fixed income securities279 956 6 1,241 89.1 %
Derivatives— 8 — 8 0.6 %
Total plan assets$319 $1,059 $14 $1,392 100.0 %
(1)    Investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient are not classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total defined benefit pension plan assets.
For the periods ended December 31, 2025 and 2024, we had no investments held in the pension plans within Level 3 of the fair value hierarchy. Our common stock was not a plan asset as of December 31, 2025 or 2024. The non-qualified plans are unfunded.
Funding
Our funding practice is to evaluate our tax and cash position, and the funded status of our plans, in determining our planned contributions. We estimate that we will contribute $5 million to our non-qualified plans in 2026 but this could change based on variations in interest rates, asset returns and other factors.
Defined Contribution Retirement Plans
Our costs for defined contribution retirement plans were $59 million, $58 million and $55 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Postretirement Medical Plan
We provide health benefits through a postretirement medical plan for eligible employees hired before 1993 (the “Postretirement Plan”).
Funded Status of Postretirement Medical Plan
The reconciliation of the changes in the plan’s benefit obligation and the determination of the amounts recognized on our Consolidated Balance Sheets were as follows:
As of December 31,
(In millions)20252024
Projected benefit obligation at beginning of year$26 $28 
Interest cost on projected benefit obligation1 1 
Actuarial gain— (1)
Participant contributions1 1 
Benefits paid(3)(3)
Projected and accumulated benefit obligation at end of year$24 $26 
Funded status of the plan$(24)$(26)
Amounts recognized in the balance sheet consist of:
Current liabilities$(3)$(3)
Long-term liabilities(22)(23)
Net amount recognized$(24)$(26)
Discount rate assumption as of December 315.22 %5.54 %
The amount included in AOCI that has not yet been recognized in net periodic benefit income (expense) was $5 million and the net periodic benefit expense was less than $1 million for the Postretirement Plan for the year ended December 31, 2025. The amount included in AOCI that has not yet been recognized in net periodic benefit income (expense) was $7 million and the net periodic benefit expense was less than $1 million for the Postretirement Plan for the year ended December 31, 2024. The discount rates assumptions used to calculate the interest cost were 5.23% - 5.64%, 5.04% - 5.10% and 5.32% - 5.41% for the years ended December 31, 2025, 2024 and 2023, respectively.
Expected benefit payments, which reflect expected future service, as appropriate, for the years ended December 31 are summarized below. These estimates are based on assumptions about future events. Actual benefit payments may vary from these estimates.
(In millions)202620272028202920302031-2035
Expected benefit payments$3 $3 $3 $2 $2 $10