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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2022
Employee Benefit Plans [Abstract] |
Employee Benefit Plans | 13. EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans. The Company maintains both qualified and non-qualified defined benefit pension plans for its U.S. employees employed prior to April 1, 2010. Generally, the Company computes the benefits based on average earnings over a period prescribed by the plans and credited length of service. The Company’s non-qualified defined benefit pension plan provided compensating pension benefits for participants whose benefits have been curtailed under the qualified plan due to Internal Revenue Code limitations. Effective January 1, 2018, participants of the Company’s non-qualified defined benefit pension plan may no longer accrue additional service benefits. Although not required to make contributions under IRS regulations, the following table summarizes the Company’s contributions to the defined benefit pension plans for the periods indicated: Years Ended December 31, (Dollars in millions) 2022 2021 2020 Company contributions $ 6 $ 4 $ 7 The following table summarizes the Company’s pension expense for the periods indicated: Years Ended December 31, (Dollars in millions) 2022 2021 2020 Pension expense $ (2) $ 3 $ 8 The following table summarizes the status of these defined benefit plans for U.S. employees for the periods indicated: Years Ended December 31, (Dollars in millions) 2022 2021 Change in projected benefit obligation: Benefit obligation at beginning of year $ 403 $ 404 Service cost 9 11 Interest cost 10 8 Actuarial (gain)/loss (115) (9) Curtailment - - Benefits paid (15) (12) Projected benefit obligation at end of year 291 403 Change in plan assets: Fair value of plan assets at beginning of year 377 354 Actual return on plan assets (83) 31 Actual contributions during the year 6 4 Administrative expenses paid - - Benefits paid (15) (12) Fair value of plan assets at end of year 285 377 Funded status at end of year $ (6) $ (25) (Some amounts may not reconcile due to rounding.) Amounts recognized in the consolidated balance sheets for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Other assets (due beyond one year) $ 1 $ - Other liabilities (due within one year) (1) (1) Other liabilities (due beyond one year) (6) (24) Net amount recognized in the consolidated balance sheets $ (6) $ (25) (Some amounts may not reconcile due to rounding.) Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Accumulated income (loss) $ (56) $ (68) Accumulated other comprehensive income (loss) $ (56) $ (68) (Some amounts may not reconcile due to rounding.) Other changes in other comprehensive income (loss) for the periods indicated are as follows: Years Ended December 31, (Dollars in millions) 2022 2021 Other comprehensive income (loss) at December 31, prior year $ (68) $ (92) Net gain (loss) arising during period 7 15 Recognition of amortizations in net periodic benefit cost: Actuarial loss 4 9 Curtailment loss recognized - - Other comprehensive income (loss) at December 31, current year $ (56) $ (68) (Some amounts may not reconcile due to rounding.) Net periodic benefit cost for U.S. employees included the following components for the periods indicated: Years Ended December 31, (Dollars in millions) 2022 2021 2020 Service cost $ 9 $ 11 $ 10 Interest cost 10 8 10 Expected return on assets (25) (24) (21) Amortization of actuarial loss from earlier periods 4 8 9 Settlement 1 - 1 Net periodic benefit cost $ (2) $ 3 $ 8 Other changes recognized in other comprehensive income (loss): Other comprehensive income (loss) attributable to change from prior year (12) (24) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (14) $ (21) (Some amounts may not reconcile due to rounding.) The weighted average discount rates used to determine net periodic benefit cost for 2022, 2021 and 2020 were 2.86 %, 2.55 % and 3.28 %, respectively. The rate of compensation increase used to determine the net periodic benefit cost for 2022, 2021 and 2020 was 4.00 %. The expected long-term rate of return on plan assets for 2022, 2021 and 2020 was 6.75 %, 7.00 % and 7.00 % respectively. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation for 2022, 2021 and 2020 were 5.25 %, 2.86 % and 2.55 %, respectively. The following table summarizes the accumulated benefit obligation for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Qualified Plan $ 258 $ 339 Non-qualified Plan 6 12 Total $ 264 $ 352 (Some amounts may not reconcile due to rounding.) The following table displays the plans with projected benefit obligations in excess of plan assets for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Qualified Plan Projected benefit obligation $ 284 $ 390 Fair value of plan assets 285 377 Non-qualified Plan Projected benefit obligation $ 6 $ 12 Fair value of plan assets - - The following table displays the plans with accumulated benefit obligations in excess of plan assets for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Qualified Plan Accumulated benefit obligation $ - $ - Fair value of plan assets - - Non-qualified Plan Accumulated benefit obligation $ 6 $ 12 Fair value of plan assets - - The following table displays the expected benefit payments in the periods indicated: (Dollars in millions) 2023 $ 13 2024 14 2025 14 2026 15 2027 17 Next 5 years 100 Plan assets consist of shares in investment trusts with 74 %, 24 %, 1 % and 1 % of the underlying assets consisting of equity securities, fixed maturities, limited partnerships and cash, respectively. The Company manages the qualified plan investments for U.S. employees. The assets in the plan consist of debt and equity mutual funds. Due to the long term nature of the plan, the target asset allocation has historically been 70 % equities and 30 % bonds. The following tables present the fair value measurement levels for the qualified plan assets at fair value for the periods indicated: Fair Value Measurement Using: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Dollars in millions) December 31, 2022 (Level 1) (Level 2) (Level 3) Assets: Short-term investments, which approximates fair value (a) $ 4 $ 4 $ - $ - Mutual funds, fair value Fixed income (b) 68 68 - - Equities (c) 211 211 - - Total $ 283 $ 283 $ - $ - (Some amounts may not reconcile due to rounding.) This category includes high quality, short-term money market instruments, which are issued and payable in U.S. dollars. (b) This category includes fixed income funds, which invest in investment grade securities of corporations, governments and government agencies with approximately 70 % in U.S. securities and 30 % in international securities. (c) This category includes funds, which invest in small, mid and multi-cap equity securities including common stocks, securities convertible into common stock and securities with common stock characteristics, such as rights and warrants, with approximately 50 % in U.S. equities and 50 % in international equities. Fair Value Measurement Using: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Dollars in millions) December 31, 2021 (Level 1) (Level 2) (Level 3) Assets: Short-term investments, which approximates fair value (a) $ 3 $ 3 $ - $ - Mutual funds, fair value Fixed income (b) 85 85 - - Equities (c) 287 287 - - Total $ 375 $ 375 $ - $ - (Some amounts may not reconcile due to rounding.) This category includes high quality, short-term money market instruments, which are issued and payable in U.S. dollars. (b) This category includes fixed income funds, which invest in investment grade securities of corporations, governments and government agencies with approximately 70 % in U.S. securities and 30 % in international securities. (c) This category includes funds, which invest in small, mid and multi-cap equity securities including common stocks, securities convertible into common stock and securities with common stock characteristics, such as rights and warrants, with approximately 50 % in U.S. equities and 50 % in international equities. In addition, $ 1.5 million and $ 2.6 million of investments which were recorded as part of the qualified plan assets at December 31, 2022 and 2021, respectively, are not included within the fair value hierarchy tables as the assets are valued using the NAV practical expedient guidance within ASU 2015-07. No contributions were made to the qualified pension benefit plan for the years ended December 31, 2022 and 2021. Defined Contribution Plans. The Company also maintains both qualified and non-qualified defined contribution plans (“Savings Plan” and “Non-Qualified Savings Plan”, respectively) covering U.S. employees. Under the plans, the Company contributes up to a maximum 3 % of the participants’ compensation based on the contribution percentage of the employee. The Non-Qualified Savings Plan provides compensating savings plan benefits for participants whose benefits have been curtailed under the Savings Plan due to Internal Revenue Code limitations. In addition, effective for new hires (and rehires) on or after April 1, 2010, the Company will contribute between 3 % and 8 % of an employee’s earnings for each payroll period based on the employee’s age. These contributions will be 100 % vested after three years. The Company incurred expenses related to these plans of $ 18 million, $ 15 million and $ 14 million for the years ended December 31, 2022, 2021 and 2020, respectively. In addition, the Company maintains several defined contribution pension plans covering non-U.S. employees. Each international office maintains a separate plan for the non-U.S. employees working in that location. The Company contributes various amounts based on salary, age and/or years of service. In the current year, the contributions as a percentage of salary for the international offices ranged from 4.3 % to 39.5 %. The contributions are generally used to purchase pension benefits from local insurance providers. The Company incurred expenses related to these plans of $ 4 million, $ 3 million and $ 3 million for the years ended December 31, 2022, 2021 and 2020, respectively. Post-Retirement Plan. The Company sponsors a Retiree Health Plan for employees employed prior to April 1, 2010. This plan provides healthcare benefits for eligible retired employees (and their eligible dependents), who have elected coverage. The Company anticipates that most covered employees will become eligible for these benefits if they retire while working for the Company. The cost of these benefits is shared with the retiree. The Company accrues the post-retirement benefit expense during the period of the employee’s service. A medical cost trend rate of 7.00 % in 2022 was assumed to decrease gradually to 4.75 % in 2030 and then remain at that level. The Company incurred expenses of $ 1 million, $ 1 million and $ 1 million for the years ended December 31, 2022, 2021 and 2020, respectively. The following table summarizes the status of this plan for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Change in projected benefit obligation: Benefit obligation at beginning of year $ 31 $ 35 Service cost 1 1 Interest cost 1 1 Amendments - - Actuarial (gain)/loss (10) (6) Benefits paid - - Benefit obligation at end of year 21 31 Change in plan assets: Fair value of plan assets at beginning of year - - Employer contributions - - Benefits paid - - Fair value of plan assets at end of year - - Funded status at end of year $ (21) $ (31) Amounts recognized in the consolidated balance sheets for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Other liabilities (due within one year) $ (1) $ (1) Other liabilities (due beyond one year) (21) (30) Net amount recognized in the consolidated balance sheets $ (21) $ (31) (Some amounts may not reconcile due to rounding.) Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss) for the periods indicated: At December 31, (Dollars in millions) 2022 2021 Accumulated income (loss) $ 13 $ 2 Accumulated prior service credit (cost) 1 2 Accumulated other comprehensive income (loss) $ 14 $ 4 Other changes in other comprehensive income (loss) for the periods indicated are as follows: Years Ended December 31, (Dollars in millions) 2022 2021 Other comprehensive income (loss) at December 31, prior year $ 4 $ (2) Net gain (loss) arising during period 10 6 Prior Service credit (cost) arising during period - - Recognition of amortizations in net periodic benefit cost: Actuarial loss (gain) - - Prior service cost - (1) Other comprehensive income (loss) at December 31, current year $ 14 $ 4 Net periodic benefit cost included the following components for the periods indicated: Years Ended December 31, (Dollars in millions) 2022 2021 2020 Service cost $ 1 $ 1 $ 1 Interest cost 1 1 1 Prior service credit recognition - (1) (1) Net gain recognition - - - Net periodic cost $ 1 $ 1 $ 1 Other changes recognized in other comprehensive income (loss): Other comprehensive gain (loss) attributable to change from prior year (10) (5) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (9) $ (4) (Some amounts may not reconcile due to rounding.) The weighted average discount rates used to determine net periodic benefit cost for 2022, 2021 and 2020 were 2.86 %, 2.55 % and 3.28 %, respectively. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year end 2022, 2021 and 2020 were 5.25 %, 2.86 % and 2.55 %, respectively. The following table displays the expected benefit payments in the years indicated: (Dollars in millions) 2023 $ 1 2024 1 2025 1 2026 1 2027 1 Next 5 years 7

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI https://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI https://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI https://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI https://asc.fasb.org/topic&trid=2235017 + Details
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