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Pension and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
We maintain five funded pension plans, consisting of three in North America (one U.S. plan and two Canadian plans) and two in the United Kingdom. One of our Canadian plans is closed to new employees and the two United Kingdom plans are closed to new employees and future accruals. The portion of the U.S. plan that is open to new employees is a cash balance plan, which provides benefits based on years of service and interest credits. We also provide group medical insurance benefits to certain retirees in North America. The specific medical benefits provided to retirees vary by group and location.
Our plan assets, benefit obligations, funded status and amounts recognized on our consolidated balance sheets for our North America and United Kingdom plans as of the December 31 measurement date are as follows:
Pension PlansRetiree Medical Plans
 North AmericaUnited KingdomNorth America
December 31,December 31,December 31,
 202120202021202020212020
 (in millions)
Change in plan assets
Fair value of plan assets as of January 1$846 $790 $491 $418 $— $— 
Return on plan assets15 96 20 58 — — 
Employer contributions14 22 26 23 4 4 
Plan participant contributions— — — — — 1 
Benefit payments(46)(66)(27)(25)(4)(5)
Foreign currency translation1 4 (5)17 — — 
Fair value of plan assets as of December 31830 846 505 491 — — 
Change in benefit obligation
Benefit obligation as of January 1(884)(839)(643)(597)(35)(37)
Service cost(20)(17)— — — — 
Interest cost(21)(25)(9)(11)(1)(1)
Benefit payments46 66 27 25 4 5 
Foreign currency translation(1)(4)6 (20)— — 
Plan participant contributions— — — — — (1)
Change in assumptions and other39 (65)29 (40)— (1)
Benefit obligation as of December 31(841)(884)(590)(643)(32)(35)
Funded status as of December 31$(11)$(38)$(85)$(152)$(32)$(35)
The line titled “Change in assumptions and other” for our North America pension plans primarily reflects the impact of gains due to the increase in discount rates for 2021 and losses due to the decrease in discount rates for 2020. 
The line titled “Change in assumptions and other” for our U.K. pension plans primarily reflects gains due to the increase in discount rates for 2021 and losses due to the decrease in discount rates for 2020. For 2021, the gains from the decrease in discount rates were partially offset by losses due to an increase in the inflation rate assumptions.
The line titled “Benefit payments” for 2020 includes $22 million of lump sum payments for our U.S. pension plan paid in December 2020.
Amounts recognized on the consolidated balance sheets consist of the following:
Pension PlansRetiree Medical Plans
 North AmericaUnited KingdomNorth America
 December 31,December 31,December 31,
 202120202021202020212020
 (in millions)
Other assets$16 $10 $— $— $— $— 
Accrued expenses— — — — (3)(3)
Other liabilities(27)(48)(85)(152)(29)(32)
$(11)$(38)$(85)$(152)$(32)$(35)

Pre-tax amounts recognized in accumulated other comprehensive loss consist of the following:
Pension PlansRetiree Medical Plans
 North AmericaUnited KingdomNorth America
 December 31,December 31,December 31,
 202120202021202020212020
 (in millions)
Prior service cost$3 $4 $1 $1 $— $— 
Net actuarial loss43 79 89 129 4 4 
$46 $83 $90 $130 $4 $4 

Net periodic benefit cost (income) and other amounts recognized in other comprehensive (income) loss for the years ended December 31 included the following:
 Pension PlansRetiree Medical Plans
North AmericaUnited KingdomNorth America
 202120202019202120202019202120202019
 (in millions)
Service cost$20 $17 $14 $— $— $— $— $— $— 
Interest cost21 25 30 9 11 15 1 1 1 
Expected return on plan assets(24)(30)(32)(14)(14)(18)— — — 
Amortization of prior service cost (benefit)1 1 — — — — — — (1)
Amortization of actuarial loss (gain)5 3 — 4 3 — — (1)(1)
Net periodic benefit cost (income)23 16 12 (1)— (3)1 — (1)
Net actuarial (gain) loss (31)(1)3 (36)(4)60 — 1 (4)
Prior service cost (credit)— — 4 — — (3)— — — 
Amortization of prior service (cost) benefit(1)(1)— — — — — — 1 
Amortization of actuarial (loss) gain(5)(3)— (4)(3)— — 1 1 
Total recognized in other comprehensive (income) loss(37)(5)7 (40)(7)57 — 2 (2)
Total recognized in net periodic benefit cost (income) and other comprehensive (income) loss$(14)$11 $19 $(41)$(7)$54 $1 $2 $(3)
In the table above, the line titled “Prior service cost (credit)” in 2019 relates to plan amendments for updates to certain mortality tables for the U.S. plan and a conversion option for pensions in payment for the U.K. plans.
Service cost is recognized in cost of sales and selling, general and administrative expenses, and the other components of net periodic benefit cost are recognized in other non-operating—net in our consolidated statements of operations.    
The accumulated benefit obligation (ABO) in aggregate for the defined benefit pension plans in North America was approximately $797 million and $834 million as of December 31, 2021 and 2020, respectively. The ABO in aggregate for the defined benefit pension plans in the United Kingdom was approximately $590 million and $643 million as of December 31, 2021 and 2020, respectively.
The following table presents aggregated information for those individual defined benefit pension plans that have an ABO in excess of plan assets as of December 31, which, for 2021, excludes the three North American defined benefit pension plans and, for 2020, excludes two of the North American defined benefit pension plans, as each has plan assets in excess of its ABO:
North AmericaUnited Kingdom
2021202020212020
 (in millions)
Accumulated benefit obligation$— $(678)$(590)$(643)
Fair value of plan assets— 667 505 491 
The following table presents aggregated information for those individual defined benefit pension plans that have a projected benefit obligation (PBO) in excess of plan assets as of December 31, which excludes two North American defined benefit pension plans that have plan assets in excess of its PBO:
North AmericaUnited Kingdom
2021202020212020
 (in millions)
Projected benefit obligation$(684)$(715)(590)$(643)
Fair value of plan assets656 667 505 491 
Our pension funding policy in North America is to contribute amounts sufficient to meet minimum legal funding requirements plus discretionary amounts that we may deem to be appropriate. Actual contributions may vary from estimated amounts depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.
In accordance with United Kingdom pension legislation, our United Kingdom pension funding policy is to contribute amounts sufficient to meet the funding level target agreed between the employer and the trustees of the United Kingdom plans.  Actual contributions are usually agreed with the plan trustees in connection with each triennial valuation and may vary following each such review depending on changes in assumptions, actual returns on plan assets, changes in regulatory requirements and funding decisions.
We currently estimate that our consolidated pension funding contributions for 2022 will be approximately $2 million for the North American plans and $27 million for the United Kingdom plans.
The expected future benefit payments for our pension and retiree medical plans are as follows:
Pension PlansRetiree Medical Plans
North AmericaUnited KingdomNorth America
 (in millions)
2022$47 $28 $3 
202348 28 2 
202449 29 2 
202549 30 2 
202650 31 2 
2027-2031253 167 9 
The following assumptions were used in determining the benefit obligations and expense:
Pension PlansRetiree Medical Plans
 North AmericaUnited KingdomNorth America
 202120202019202120202019202120202019
Weighted-average discount rate—obligation2.8 %2.4 %3.1 %2.0 %1.5 %2.0 %2.7 %2.2 %3.0 %
Weighted-average discount rate—expense2.4 %3.1 %4.1 %1.5 %2.0 %2.9 %2.2 %3.0 %4.1 %
Weighted-average cash balance interest crediting rate—obligation 3.0 %3.0 %3.0 %n/an/an/an/an/an/a
Weighted-average cash balance interest crediting rate—expense3.0 %3.0 %3.0 %n/an/an/an/an/an/a
Weighted-average rate of increase in future compensation4.2 %4.2 %4.2 %n/an/an/an/an/an/a
Weighted-average expected long-term rate of return on assets—expense3.2 %4.1 %4.6 %3.3 %3.4 %4.4 %n/an/an/a
Weighted-average retail price index—obligationn/an/an/a3.3 %3.0 %3.0 %n/an/an/a
Weighted-average retail price index—expensen/an/an/a3.0 %3.0 %3.3 %n/an/an/a
______________________________________________________________________________
n/a—not applicable
The discount rates for all plans are developed by plan using spot rates derived from a hypothetical yield curve of high quality (AA rated or better) fixed income debt securities as of the year-end measurement date to calculate discounted cash flows (the projected benefit obligation) and solving for a single equivalent discount rate that produces the same projected benefit obligation. In determining our benefit obligation, we use the actuarial present value of the vested benefits to which each eligible employee is currently entitled, based on the employee’s expected date of separation or retirement.
The cash balance interest crediting rate for the U.S. plan is based on the greater of 10-year Treasuries or 3.0%.
For our North America plans, the expected long-term rate of return on assets is based on analysis of historical rates of return achieved by equity and non-equity investments and current market characteristics, adjusted for estimated plan expenses and weighted by target asset allocation percentages. As of January 1, 2022, our weighted-average expected long-term rate of return on assets is 3.6%, which will be used in determining expense for 2022.
For our United Kingdom plans, the expected long-term rate of return on assets is based on the expected long-term performance of the underlying investments, adjusted for investment managers’ fees and estimated plan expenses. As of January 1, 2022, our weighted-average expected long-term rate of return on assets is 3.4%, which will be used in determining expense for 2022.
The retail price index for the United Kingdom plans is developed using the Bank of England implied retail price inflation curve, which is based on the difference between yields on fixed interest government bonds and index-linked government bonds.
For the measurement of the benefit obligation at December 31, 2021 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-65 retirees, start with a 6.3% increase in 2022, followed by a gradual decline in increases to 4.5% for 2030 and thereafter. For post-65 retirees, the assumed health care cost trend rates start with a 6.8% increase in 2022, followed by a gradual decline in increases to 4.5% for 2030 and thereafter. For the measurement of the benefit obligation at December 31, 2020 for our primary (U.S.) retiree medical benefit plans, the assumed health care cost trend rates, for pre-65 retirees, started with a 6.3% increase in 2021, followed by a gradual decline in increases to 4.5% for 2030 and thereafter. For post-65 retirees, the assumed health care cost trend rates started with a 7.0% increase in 2021, followed by a gradual decline in increases to 4.5% for 2030 and thereafter.
The objectives of the investment policies governing the pension plans are to administer the assets of the plans for the benefit of the participants in compliance with all laws and regulations, and to establish an asset mix that provides for diversification and considers the risk of various different asset classes with the purpose of generating favorable investment returns. The investment policies consider circumstances such as participant demographics, time horizon to retirement and liquidity needs, and provide guidelines for asset allocation, planning horizon, general portfolio issues and investment manager evaluation criteria. The investment strategies for the plans, including target asset allocations and investment vehicles, are subject to change within the guidelines of the policies.
The target asset allocation for our U.S. pension plan is 80% non-equity and 20% equity, which has been determined based on analysis of actual historical rates of return and plan needs and circumstances. The equity investments are tailored to exceed the growth of the benefit obligation and are a combination of U.S. and non-U.S. total stock market index mutual funds. The non-equity investments consist primarily of investments in debt securities and money market instruments that are selected based on investment quality and duration to mitigate volatility of the funded status and annual required contributions. The non-equity investments have a duration profile that is similar to the benefit obligation in order to mitigate the impact of interest rate changes on the funded status. This investment strategy is achieved through the use of mutual funds and individual securities.
The target asset allocation for one of the Canadian plans is 70% non-equity and 30% equity, and 100% non-equity for the other Canadian plan. This investment strategy is achieved through the use of a mutual fund for equity investments and individual securities for non-equity investments. The equity investment is a passively managed portfolio that diversifies assets across multiple securities, economic sectors and countries. The non-equity investments consist primarily of investments in debt securities that are selected based on investment quality and duration to mitigate volatility of the funded status and annual required contributions. The non-equity investments have a duration profile that is similar to the benefit obligation in order to mitigate the impact of interest rate changes on the funded status.
The pension assets in the United Kingdom plans are each administered by a Board of Trustees consisting of employer-nominated trustees, member-nominated trustees and an independent trustee, with a requirement that member-nominated trustees represent at least one-third of each Board of Trustees. It is the responsibility of the trustees to ensure prudent management and investment of the assets in the plans. The trustees meet on a quarterly basis to review and discuss fund performance and other administrative matters.
The trustees’ investment objectives are to hold assets that generate returns sufficient to cover prudently each plan’s liability without exposing the plans to unacceptable risk. This is accomplished through the asset allocation strategy of each plan. For both plans, if the asset allocation moves more than plus or minus 5% from the benchmark allocation, the trustees may decide to amend the asset allocation. At a minimum, the trustees review the investment strategy at every triennial actuarial valuation to ensure that the strategy remains consistent with its funding principles. The trustees may review the strategy more frequently if opportunities arise to reduce risk within the investments without jeopardizing the funding position.
Assets of the United Kingdom plans are invested in externally managed pooled funds. The assets are allocated between a growth portfolio and a matching portfolio. The growth portfolio seeks a return premium on investments across multiple asset classes. Growth portfolio funds may include, among others, traditional equities and bonds, growth fixed income, hedged funds, and may use derivatives. The matching portfolio seeks to align asset changes with changes in liabilities due to interest rates and inflation expectations. Matching portfolio funds are composed of corporate bonds, U.K. gilts and liability-driven investment funds and generally invest in fixed income debt securities including government bonds, gilts, gilt repurchase agreements, swaps and investment grade corporate bonds and may use derivatives. The target asset allocation for one of the United Kingdom plans is 55% in the growth portfolio and 45% in the matching portfolio and the other United Kingdom plan is 60% in the growth portfolio (including a legacy holding in an actively managed property fund) and 40% in the matching portfolio.
The fair values of our pension plan assets as of December 31, 2021 and 2020, by major asset class, are as follows:
 North America
December 31, 2021
 Total Fair
Value		Quoted
Prices in
Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Cash and cash equivalents(1)
$14 $10 $4 $— 
Equity mutual funds
Index equity(2)
157 157 — — 
Pooled equity(3)
34 — 34 — 
Fixed income    
U.S. Treasury bonds and notes(4)
61 61 — — 
Corporate bonds and notes(5)
460 — 460 — 
Government and agency securities(6)
103 — 103 — 
Other(7)
7 — 7 — 
Total assets at fair value by fair value levels$836 $228 $608 $— 
Accruals and payables—net(6)
Total assets$830    
 United Kingdom
December 31, 2021
 Total Fair
Value		Quoted
Prices in
Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Cash and cash funds(8)
$15 $8 $7 $— 
Pooled equity funds(9)
122 — 122 — 
Pooled diversified funds(10)
52 — 52 — 
Debt funds
Pooled U.K. government fixed and index-linked securities funds(11)
78 — 78 — 
Pooled global debt funds(12)
88 — 88 — 
Pooled liability-driven investment funds(13)
67 — 67 — 
Total assets at fair value by fair value levels$422 $8 $414 $— 
Funds measured at NAV as a practical expedient(14)
83 
Total assets$505 
 North America
December 31, 2020
 Total Fair
Value		Quoted
Prices in
Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Cash and cash equivalents(1)
$30 $7 $23 $— 
Equity mutual funds
Index equity(2)
134 134 — — 
Pooled equity(3)
30 — 30 — 
Fixed income
U.S. Treasury bonds and notes(4)
37 37 — — 
Corporate bonds and notes(5)
499 — 499 — 
Government and agency securities(6)
110 — 110 — 
Other(7)
7 — 7 — 
Total assets at fair value by fair value levels$847 $178 $669 $— 
Accruals and payables—net(1)   
Total assets$846    
 United Kingdom
December 31, 2020
 Total Fair
Value		Quoted
Prices in
Active
Markets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Cash and cash funds(8)
$22 $5 $17 $— 
Pooled equity funds(9)
118 — 118 — 
Pooled diversified funds(10)
55 — 55 — 
Debt funds
Pooled U.K. government fixed and index-linked securities funds(11)
73 — 73 — 
Pooled global debt funds(12)
88 — 88 — 
Pooled liability-driven investment funds(13)
83 — 83 — 
Total assets at fair value by fair value levels$439 $5 $434 $— 
Funds measured at NAV as a practical expedient(14)
52 
Total assets$491 
_______________________________________________________________________________
(1)Cash and cash equivalents are primarily short-term U.S. treasury bills and short-term money market funds in 2021, and also included repurchase agreements in 2020.
(2)The index equity funds are mutual funds that utilize a passively managed investment approach designed to track specific equity indices. They are valued at quoted market prices in an active market, which represent the net asset values of the shares held by the plan.
(3)The equity pooled mutual funds consist of pooled funds that invest in common stock and other equity securities that are traded on U.S., Canadian, and foreign markets.
(4)U.S. Treasury bonds and notes are valued based on quoted market prices in an active market.
(5)Corporate bonds and notes, including private placement securities, are valued by institutional bond pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models.
(6)Government and agency securities consist of U.S. municipal bonds and Canadian provincial bonds that are valued by institutional bond pricing services, which gather information on current trading activity, market movements, trends, and specific data on specialty issues.
(7)Other includes primarily mortgage-backed and asset-backed securities, which are valued by institutional pricing services, which gather information from market sources and integrate credit information, observed market movements and sector news into their pricing applications and models.
(8)Cash and cash funds include a cash fund that holds primarily short-dated term money market securities.
(9)Pooled equity funds invest in a broad array of global equity, equity-related securities, a range of diversifiers and may use derivatives for efficient portfolio management. The funds are valued at net asset value (NAV) as determined by the fund managers based on the value of the underlying net assets of the fund.
(10)Pooled diversified funds invest in a broad array of asset classes and a range of diversifiers including the use of derivatives. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(11)Pooled U.K. government fixed and index-linked securities funds invest primarily in Sterling denominated fixed income and inflation-linked fixed income securities issued or guaranteed by the U.K. government and may use derivatives for efficient portfolio management. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(12)Pooled global debt funds invest in a broad array of debt securities from corporate and government bonds to emerging markets and high-yield fixed and floating rate securities of varying maturities. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(13)Pooled liability-driven investment funds invest primarily in gilt repurchase agreements, physical U.K. government gilts, and derivatives to provide exposure to interest rates and inflation, thus hedging these elements of risk associated with pension liabilities. The funds are valued at NAV as determined by the fund managers based on the value of the underlying net assets of the fund.
(14)Funds measured at NAV as a practical expedient include funds of funds with return strategies with exposure to varying asset classes and credit strategies, as well as alternative investment strategies not precluding multi-asset credit strategies, global macro strategies, commodities, fixed income, equities and currency, and funds that invest primarily in freehold and leasehold property in the United Kingdom. The funds are valued using NAV as determined by the fund managers based on the value of the underlying assets of the fund.

We have defined contribution plans covering substantially all employees in North America and the United Kingdom. Depending on the specific provisions of each plan, qualified employees receive company contributions based on a percentage of base salary, matching of employee contributions up to specified limits, or a combination of both. In 2021, 2020 and 2019, we recognized expense related to our contributions to the defined contribution plans of $25 million, $22 million and $20 million, respectively.
In addition to our qualified defined benefit pension plans, we also maintain certain nonqualified supplemental pension plans for highly compensated employees as defined under federal law. The amounts recognized in accrued expenses and other liabilities in our consolidated balance sheets for these plans were $1 million and $14 million, respectively, as of December 31, 2021, and $4 million and $16 million, respectively, as of December 31, 2020. We recognized expense for these plans of $2 million, $2 million and $1 million in 2021, 2020 and 2019, respectively.