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Long-Term Employee Benefit Liabilities
 12 Months Ended
Dec. 31, 2019
Postemployment Benefits [Abstract]  
Long-Term Employee Benefit Liabilities
19.
LONG-TERM EMPLOYEE BENEFIT LIABILITIES
Long-term employee benefit liabilities consist of:
 
   
2019
   2018 
Defined benefit pension plans and other [a]
  
$
203
 
  $184 
Termination and long service arrangements [b]
  
 
437
 
   381 
Retirement medical benefits plans [c]
  
 
27
 
   27 
Other long-term employee benefits
  
 
10
 
   5 
   
 
 
   
 
 
 
Long-term employee benefit obligations
  
$
677
 
  $597 
   
 
 
   
 
 
 
 
[a]
Defined benefit pension plans
The Company sponsors a number of defined benefit pension plans and similar arrangements for its employees. All pension plans are funded to at least the minimum legal funding requirements, while European defined benefit pension plans are unfunded.
The weighted average significant actuarial assumptions adopted in measuring the Company’s obligations and costs are as follows:
 
   
2019
  2018 
Projected benefit obligation
         
Discount rate
  
 
2.5
% 
  3.1% 
Rate of compensation increase
  
 
2.6
% 
  2.5% 
Net periodic benefit cost
         
Discount rate
  
 
3.2
% 
  2.8% 
Rate of compensation increase
  
 
2.6
% 
  2.5% 
Expected return on plan assets
  
 
4.9
% 
  5.8% 
 
Information about the Company’s defined benefit pension plans is as follows:
 
   
2019
 
  2018 
Projected benefit obligation
    
 
     
Beginning of year
  
$
633
 
  $687 
Current service cost
  
 
11
 
   14 
Interest cost
  
 
20
 
   18 
Actuarial losses (gains) and changes in actuarial assumptions
  
 
79
 
   (33) 
Benefits paid
  
 
(21
) 
   (24) 
Divestiture
 
 
 
(68
)
 
 
 
 
—
 
Foreign exchange
  
 
5
 
   (29) 
   
 
 
 
  
 
 
 
End of year
  
 
659
 
   633 
   
 
 
 
  
 
 
 
Plan assets at fair value [i]
    
 
     
Beginning of year
  
 
406
 
   443 
Return on plan assets
  
 
78
 
   (11) 
Employer contributions
  
 
11
 
   12 
Benefits paid
  
 
(17
) 
   (19) 
Divestiture
 
 
 
(10
)
 
 
 
—
 
Foreign exchange
  
 
10
 
   (19) 
   
 
 
 
  
 
 
 
End of year
  
 
478
 
   406 
   
 
 
 
  
 
 
 
Ending funded status
  
$
181
 
  $227 
   
 
 
 
  
 
 
 
Amounts recorded in the consolidated balance sheet
    
 
     
Non-current
asset
[note 1
4
]
  
$
(23
) 
  $(18) 
Current liability
  
 
1
 
   1 
Liabilities held for sale
[note 3]
[ii]
  
 
—
 
   60 
Non-current
liability
  
 
203
 
   184 
   
 
 
 
  
 
 
 
Net amount
  
$
181
 
  $227 
   
 
 
 
  
 
 
 
Amounts recorded in accumulated other comprehensive income
    
 
     
Unrecognized actuarial losses
  
$
(141
) 
  $(134) 
   
 
 
 
  
 
 
 
Net periodic benefit cost
    
 
     
Current service cost
  
$
11
 
  $14 
Interest cost
  
 
20
 
   18 
Return on plan assets
  
 
(19
) 
   (25) 
Actuarial losses
  
 
4
 
   4 
   
 
 
 
  
 
 
 
Net periodic benefit cost
  
$
16
 
  $11 
   
 
 
 
  
 
 
 
 [i]
The asset allocation of the Company’s defined benefit pension plans at December 31, 2019 and the target allocation for 2020 is as follows:
 
   
2020
  2019 
Fixed income securities
  
 
55-75
%
  59% 
Equity securities
  
 
25-45
%
  37% 
Cash and cash equivalents
  
 
0-10
%
  4% 
   
 
 
  
 
 
 
   
 
100
% 
  100% 
   
 
 
  
 
 
 
Substantially all of the plan assets’ fair value has been determined using significant observable inputs [level 2] from indirect market prices on regulated financial exchanges.
 
[ii]
Includes $58 million of long-term employee benefit liabilities and $2 million of accrued salaries and wages which were reclassified to liabilities held for sale.
The expected rate of return on plan assets was determined by considering the Company’s current investment mix, the historic performance of these investment categories and expected future performance of these investment categories.
 
[b]
Termination and long service arrangements
Pursuant to labour laws and national labour agreements in certain European countries and Mexico, the Company is obligated to provide lump sum termination payments to employees on retirement or involuntary termination, and long service payments contingent upon persons reaching a predefined number of years of service.
The weighted average significant actuarial assumptions adopted in measuring the Company’s projected termination and long service benefit obligations and net periodic benefit cost are as follows:
 
   
2019
  2018 
Discount rate
  
 
2.1
% 
  2.8% 
Rate of compensation increase
  
 
3.1
% 
  2.9% 
Information about the Company’s termination and long service arrangements is as follows:
 
   
2019
   2018 
Projected benefit obligation
          
Beginning of year
  
$
394
 
  $378 
Current service cost
  
 
29
 
   22 
Interest cost
  
 
10
 
   8 
Actuarial losses and changes in actuarial assumptions
  
 
39
 
   14 
Benefits paid
  
 
(19
) 
   (14) 
(Divestiture) acquisition
  
 
(3
) 
   2 
Foreign exchange
  
 
(4
) 
   (16) 
   
 
 
   
 
 
 
Ending funded status
  
$
446
 
  $394 
   
 
 
   
 
 
 
Amounts recorded in the consolidated balance sheet
          
Current liability
  
$
9
 
  $9 
Liabilities held for sale
[note 3]
  
 
—
 
   4 
Non-current
liability
  
 
437
 
   381 
   
 
 
   
 
 
 
Net amount
  
$
446
 
  $394 
   
 
 
   
 
 
 
Amounts recorded in accumulated other comprehensive income
          
Unrecognized actuarial losses
  
$
(124
)
 
  $(88) 
   
 
 
   
 
 
 
Net periodic benefit cost
          
Current service cost
  
$
29
 
  $22 
Interest cost
  
 
10
 
   8 
Actuarial losses (gains)
  
 
4
 
   (1) 
   
 
 
   
 
 
 
Net periodic benefit cost
  
$
43
 
  $29 
   
 
 
   
 
 
 
[c]
Retirement medical benefits plans
The Company sponsors a number of retirement medical plans which were assumed on certain acquisitions in prior years. These plans are frozen to new employees and incur no current service costs.
In addition, the Company sponsors a retirement medical benefits plan that was amended during 2009 such that substantially all employees retiring on or after August 1, 2009 no longer participate in the plan.
The weighted average discount rates used in measuring the Company’s projected retirement medical benefit obligations and net periodic benefit cost are as follows:  
   
2019
  2018 
Retirement medical benefit obligations
  
 
3.1
% 
  4.0% 
Net periodic benefit cost
  
 
4.0
% 
  3.4% 
Health care cost inflation
  
 
6.8
% 
  6.8% 
Information about the Company’s retirement medical benefits plans are as follows:  
   
2019
   2018 
Projected benefit obligation
          
Beginning of year
  
$
29
 
  $33 
Interest cost
  
 
1
 
   1 
Actuarial gains and changes in actuarial assumptions
  
 
—
 
   (3) 
Benefits paid
  
 
(1
)
 
   (1) 
Foreign exchange
  
 
—
 
   (1) 
   
 
 
   
 
 
 
Ending funded status
  
$
29
 
  $29 
   
 
 
   
 
 
 
Amounts recorded in the consolidated balance sheet
          
Current liability
  
$
2
 
  $2 
Non-current
liability
  
 
27
 
   27 
   
 
 
   
 
 
 
Net amount
  
$
29
 
  $29 
   
 
 
   
 
 
 
Amounts recorded in accumulated other comprehensive income
          
Unrecognized actuarial gains
  
 
11
 
   12 
   
 
 
   
 
 
 
Total accumulated other comprehensive income
  
$
11
 
  $12 
   
 
 
   
 
 
 
Net periodic benefit cost
          
Interest cost
  
$
1
 
  $1 
Actuarial gains
  
 
(1
)
 
   (1) 
   
 
 
   
 
 
 
Net periodic benefit cos
t
  
$
—
 
  $— 
   
 
 
   
 
 
 
The effect of a
one-percentage
point increase or decrease in health care trend rates would not have a significant impact on the Company’s net income.
 
[d]
Future benefit payments
 
   Defined
benefit
pension plans		   Termination
and long
service
arrangements		   Retirement
medical
benefits plans		   Total 
Expected employer contributions - 2020
  $11   $9   $2   $22 
   
 
 
   
 
 
   
 
 
   
 
 
 
Expected benefit payments:
                    
2020
  $22   $10   $1   $33 
2021
   22    11    2    35 
2022
   23    11    2    35 
2023
   23    14    2    39 
2024
   24    18    2    43 
Thereafter
   131    119    8    250 
   
 
 
   
 
 
   
 
 
   
 
 
 
   $245   $183   $17   $435