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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | 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 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) | 2023 |  | 2022 |  | 2021
Company contributions | $ | 1 |  |  | $ | 6 |  |  | $ | 4 |
The following table summarizes the Company’s pension expense for the periods indicated:
| Years Ended December 31,
(Dollars in millions) | 2023 |  | 2022 |  | 2021
Pension expense | $ | 5 |  |  | $ | (2) |  |  | $ | 3 |
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) | 2023 |  | 2022
Change in projected benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 291 |  |  | $ | 403 |
Service cost | 5 |  |  | 9 |
Interest cost | 14 |  |  | 10 |
Actuarial (gain)/loss | 9 |  |  | (115) |
Curtailment | — |  |  | — |
Benefits paid | (25) |  |  | (15) |
Projected benefit obligation at end of year | 295 |  |  | 291 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | 285 |  |  | 377 |
Actual return on plan assets | 48 |  |  | (83) |
Actual contributions during the year | 1 |  |  | 6 |
Administrative expenses paid | — |  |  | — |
Benefits paid | (25) |  |  | (15) |
Fair value of plan assets at end of year | 308 |  |  | 285 |
Funded status at end of year | $ | 13 |  |  | $ | (6) |
(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) | 2023 |  | 2022
Other assets (due beyond one year) | $ | 19 |  |  | $ | 1 |
Other liabilities (due within one year) | (3) |  |  | (1) |
Other liabilities (due beyond one year) | (3) |  |  | (6) |
Net amount recognized in the consolidated balance sheets | $ | 13 |  |  | $ | (6) |
(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) | 2023 |  | 2022
Accumulated income (loss) | $ | (33) |  |  | $ | (56) |
Accumulated other comprehensive income (loss) | $ | (33) |  |  | $ | (56) |
(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) | 2023 |  | 2022
Other comprehensive income (loss) at December 31, prior year | $ | (56) |  |  | $ | (68) |
Net gain (loss) arising during period | 19 |  |  | 7 |
Recognition of amortizations in net periodic benefit cost: |  |  |
Actuarial loss | 4 |  |  | 4 |
Curtailment loss recognized | — |  |  | — |
Other comprehensive income (loss) at December 31, current year | $ | (33) |  |  | $ | (56) |
(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) | 2023 |  | 2022 |  | 2021
Service cost | $ | 5 |  |  | $ | 9 |  |  | $ | 11 |
Interest cost | 14 |  |  | 10 |  |  | 8 |
Expected return on assets | (19) |  |  | (25) |  |  | (24) |
Amortization of actuarial loss from earlier periods | 4 |  |  | 4 |  |  | 8 |
Settlement | — |  |  | 1 |  |  | — |
Net periodic benefit cost | $ | 5 |  |  | $ | (2) |  |  | $ | 3 |
Other changes recognized in other comprehensive income (loss): |  |  |  |  |
Other comprehensive income (loss) attributable to change from prior year | (23) |  |  | (12) |  |  |
Total recognized in net periodic benefit cost and other |  |  |  |  |
comprehensive income (loss) | $ | (18) |  |  | $ | (14) |  |  |
(Some amounts may not reconcile due to rounding.) The weighted average discount rates used to determine net periodic benefit cost for 2023, 2022 and 2021 were 5.25%, 2.86% and 2.55%, respectively. The rate of compensation increase used to determine the net periodic benefit cost for 2023, 2022 and 2021 was 4.00%. The expected long-term rate of return on plan assets for 2023, 2022 and 2021 was 7.00%, 6.75% and 7.00% respectively. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation for 2023, 2022 and 2021 were 5.00%, 5.25% and 2.86%, respectively. The following table summarizes the accumulated benefit obligation for the periods indicated:
| At December 31,
(Dollars in millions) | 2023 |  | 2022
Qualified Plan | $ | 263 |  |  | $ | 258 |
Non-qualified Plan | 6 |  |  | 6 |
Total | $ | 269 |  |  | $ | 264 |
(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) | 2023 |  | 2022
Qualified Plan |  |  |
Projected benefit obligation | $ | 289 |  |  | $ | 284 |
Fair value of plan assets | 308 |  |  | 285 |
Non-qualified Plan |  |  |
Projected benefit obligation | $ | 6 |  |  | $ | 6 |
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) | 2023 |  | 2022
Qualified Plan |  |  |
Accumulated benefit obligation | $ | — |  |  | $ | — |
Fair value of plan assets | — |  |  | — |
Non-qualified Plan |  |  |
Accumulated benefit obligation | $ | 6 |  |  | $ | 6 |
Fair value of plan assets | — |  |  | — |
The following table displays the expected benefit payments in the periods indicated:
(Dollars in millions) |
2024 | $ | 15 |
2025 | 14 |
2026 | 15 |
2027 | 16 |
2028 | 17 |
Next 5 years | 99 |
Plan assets consist primarily of shares in investment trusts with 75%, 24% and 1% of the underlying assets consisting of equity securities, fixed maturities 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:
(Dollars in millions) | December 31, 2023 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Short-term investments, which approximates fair value (a) | $ | 2 |  |  | $ | 2 |  |  | $ | — |  |  | $ | — |
Mutual funds, fair value |  |  |  |  |  |  |
Fixed income (b) | 73 |  |  | 73 |  |  | — |  |  | — |
Equities (c) | 232 |  |  | 232 |  |  | — |  |  | — |
Total | $ | 308 |  |  | $ | 308 |  |  | $ | — |  |  | $ | — |
(Some amounts may not reconcile due to rounding.) (a)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 90% in U.S. securities and 10% 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 100% in U.S. equities.
|  |  | Fair Value Measurement Using:
(Dollars in millions) | December 31, 2022 |  | Fair Value Measurement Using: Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (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.) (a)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, $2 million of investments which were recorded as part of the qualified plan assets at December 31, 2022 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, 2023 and 2022. 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 $22 million, $18 million and $15 million for the years ended December 31, 2023, 2022 and 2021, 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 5.1% to 29.3%. The contributions are generally used to purchase pension benefits from local insurance providers. The Company incurred expenses related to these plans of $6 million, $4 million and $3 million for the years ended December 31, 2023, 2022 and 2021, 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 6.75% in 2023 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, 2023, 2022 and 2021, respectively. The following table summarizes the status of this plan for the periods indicated:
| At December 31,
(Dollars in millions) | 2023 |  | 2022
Change in projected benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 21 |  |  | $ | 31 |
Service cost | 1 |  |  | 1 |
Interest cost | 1 |  |  | 1 |
Amendments | — |  |  | — |
Actuarial (gain)/loss | (1) |  |  | (10) |
Benefits paid | — |  |  | — |
Benefit obligation at end of year | 22 |  |  | 21 |
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 | $ | (22) |  |  | $ | (21) |
Amounts recognized in the consolidated balance sheets for the periods indicated:
| At December 31,
(Dollars in millions) | 2023 |  | 2022
Other liabilities (due within one year) | $ | (1) |  |  | $ | (1) |
Other liabilities (due beyond one year) | (21) |  |  | (21) |
Net amount recognized in the consolidated balance sheets | $ | (22) |  |  | $ | (21) |
(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) | 2023 |  | 2022
Accumulated income (loss) | $ | 11 |  |  | $ | 13 |
Accumulated prior service credit (cost) | 1 |  |  | 1 |
Accumulated other comprehensive income (loss) | $ | 12 |  |  | $ | 14 |
Other changes in other comprehensive income (loss) for the periods indicated are as follows:
| Years Ended December 31,
(Dollars in millions) | 2023 |  | 2022
Other comprehensive income (loss) at December 31, prior year | $ | 14 |  |  | $ | 4 |
Net gain (loss) arising during period | 1 |  |  | 10 |
Prior Service credit (cost) arising during period | — |  |  | — |
Recognition of amortizations in net periodic benefit cost: |  |  |
Actuarial loss (gain) | (2) |  |  | — |
Prior service cost | — |  |  | — |
Other comprehensive income (loss) at December 31, current year | $ | 12 |  |  | $ | 14 |
Net periodic benefit cost included the following components for the periods indicated:
| Years Ended December 31,
(Dollars in millions) | 2023 |  | 2022 |  | 2021
Service cost | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |
Interest cost | 1 |  |  | 1 |  |  | 1 |
Prior service credit recognition | — |  |  | — |  |  | (1) |
Net gain recognition | (2) |  |  | — |  |  | — |
Net periodic cost | $ | (1) |  |  | $ | 1 |  |  | $ | 1 |
Other changes recognized in other comprehensive income (loss): |  |  |  |  |
Other comprehensive gain (loss) attributable to change from prior year | 2 |  |  | (10) |  |  |
Total recognized in net periodic benefit cost and |  |  |  |  |
other comprehensive income (loss) | $ | 1 |  |  | $ | (9) |  |  |
(Some amounts may not reconcile due to rounding.) The weighted average discount rates used to determine net periodic benefit cost for 2023, 2022 and 2021 were 5.25%, 2.86% and 2.55%, respectively. The weighted average discount rates used to determine the actuarial present value of the projected benefit obligation at year end 2023, 2022 and 2021 were 5.00%, 5.25% and 2.86%, respectively. The following table displays the expected benefit payments in the years indicated:
(Dollars in millions) |
2024 | $ | 1 |
2025 | 1 |
2026 | 1 |
2027 | 1 |
2028 | 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 -Topic 710 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//710/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//712/tableOfContent Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//715/tableOfContent Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 718 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//718/tableOfContent + Details
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