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Pension and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2022
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
Pensions. The Company sponsors various pension plans covering certain U.S. and non-U.S. employees, and participates in certain multi-employer pension plans. The benefits under the Company plans are based primarily on years of service and either the employees’ remuneration near retirement or a fixed dollar multiple.
 
A measurement date of December 31 was used for all plans presented below.

The components of pension expense were as follows:
U.S. Plans202220212020
Service cost$19 $20 $18 
Interest cost31 25 38 
Expected return on plan assets(75)(63)(73)
Settlements— — 3 
Curtailments and special termination benefits1 9 — 
Amortization of actuarial loss44 58 56 
Amortization of prior service cost1 1 1 
Net periodic cost$21 $50 $43 

Non-U.S. Plans202220212020
Service cost$9 $13 $10 
Interest cost13 32 52 
Expected return on plan assets(22)(72)(107)
Settlements— 1,511 63 
Amortization of actuarial loss5 33 27 
Amortization of prior service credit(1)— — 
Net periodic cost $4 $1,517 $45 

The settlement charge in 2021 arose from the irrevocable transfer of the Company's U.K. defined benefit pension plan (the "Plan") to an insurer. In 2021, the Company made a cash contribution of £196 to enable the Plan to purchase a bulk annuity insurance contract for the benefit of the Plan participants. The Company expects £127 ($153 using December 31, 2022 exchange rate) of the cash contribution to be repaid as the Plan sells its remaining illiquid assets, of which £101 ($122 using December 31, 2022 exchange rate) has been received to date, including $77 in 2022.

The settlement charge in 2020 arose from the payment of lump sum buy-outs to settle certain pension obligations using plan assets.

Additional pension expense of $5 in each of 2022, 2021 and 2020 was recognized for multi-employer plans.

The projected benefit obligations, accumulated benefit obligations, plan assets and funded status of the Company's U.S. and non-U.S. plans were as follows:
 U.S. PlansNon-U.S. Plans
 2022202120222021
Projected Benefit Obligations
Benefit obligations at January 1$1,413 $1,505 $513 $3,172 
Service cost19 20 9 13 
Interest cost31 25 13 32 
Plan participants’ contributions— — 2 2 
Amendments1 2 — (3)
Settlements(9)— (9)(2,982)
Curtailments(2)(10)— (7)
Special termination benefits— 6 — — 
Actuarial (gain) / loss(266)(43)(95)444 
Benefits paid(93)(92)(30)(165)
Foreign currency translation— — (16)7 
Benefit obligations at December 31$1,094 $1,413 $387 $513 
Plan Assets
Fair value of plan assets at January 1$1,177 $1,152 $529 $3,518 
Actual return on plan assets(199)115 (22)(94)
Employer contributions10 2 (63)234 
Plan participants’ contributions— — 2 2 
Settlements(9)— (7)(2,982)
Benefits paid(93)(92)(31)(165)
Foreign currency translation— — (27)16 
Fair value of plan assets at December 31$886 $1,177 $381 $529 
Funded status$(208)$(236)$(6)$16 
Accumulated benefit obligations at December 31$1,055 $1,361 $361 $474 

For the year ended December 31, 2022, actuarial gains for the Company’s U.S. and non-U.S. pension plans totaled $46. Actuarial gains and losses arise each year primarily due to changes in discount rates, differences in actual plan asset returns compared to expected returns, and changes in actuarial assumptions such as mortality. The gain in 2022 is primarily due to higher discount rates at the end of 2022 compared to 2021, partially offset by actual asset returns lower than expected returns.

U.S. pension plans with accumulated benefit obligations and projected benefit obligations in excess of plan assets were as follows: 
20222021
Projected benefit obligations$1,094 $1,413 
Accumulated benefit obligations1,055 1,361 
Fair value of plan assets886 1,177 

Non-U.S. pension plans with accumulated benefit obligations in excess of plan assets were as follows: 
20222021
Projected benefit obligations$224 $284 
Accumulated benefit obligations204 253 
Fair value of plan assets134 147 

Non-U.S. pension plans with projected benefit obligations in excess of plan assets were as follows: 
20222021
Projected benefit obligations$224 $288 
Accumulated benefit obligations204 257 
Fair value of plan assets135 151 
The Company’s investment strategy in its U.S. plan is designed to generate returns that are consistent with providing benefits to plan participants within the risk tolerance of the plan. Asset allocation is the primary determinant of return levels and investment risk exposure.

The strategic ranges for asset allocation in the U.S. plans are as follows: 
U.S. equities45 %to55 %
International equities7.5 %to12.5 %
Fixed income15 %to25 %
Balanced funds7.5 %to12.5 %
Real estate7.5 %to12.5 %

Pension assets are classified into three levels. Level 1 asset values are derived from quoted prices which are available in active markets as of the report date. Level 2 asset values are derived from other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the report date. Level 3 asset values are derived from unobservable pricing inputs that are not corroborated by market data or other objective sources.

Level 1 Investments

Equity securities are valued at the latest quoted prices taken from the primary exchange on which the security trades. Mutual funds are valued at the net asset value (NAV) of shares held at year-end.

Level 2 Investments

Fixed income securities, including government issued debt, corporate debt, asset-backed and structured debt securities are valued using the latest bid prices or valuations based on a matrix system (which considers such factors as benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and other reference data including market research publications). Derivatives, which consist mainly of interest rate swaps, are valued using a discounted cash flow pricing model based on observable market data.

Level 3 Investments

Hedge funds and private equity funds are valued at the NAV at year-end. The values assigned to private equity funds are based upon assessments of each underlying investment, incorporating valuations that consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information, including comparable transactions, and performance multiples among other factors. Real estate investments are based on third party appraisals.

Investments Measured Using NAV per Share Practical Expedient

Investments measured using NAV per share as a practical expedient include investment funds that invest in global equity, emerging markets and fixed income. The global equity funds invest in equity securities of various market sectors including industrial materials, consumer discretionary goods and services, financial infrastructure, technology, and health care. The emerging markets funds invest in equity markets within financial services, consumer goods and services, energy, and technology.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair value. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in different fair value measurements at the reporting date.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and their placement within the fair value hierarchy. The levels assigned to the defined benefit plan assets as of December 31, 2022 and 2021 are summarized in the tables below:
 2022
 U.S. plan
assets		Non-U.S. plan
assets		Total
Level 1
Cash and cash equivalents$35 $19 $54 
Global large cap equity— 11 11 
U.S. large cap equity152 2 154 
U.S. mid/small cap equity246 19 265 
Mutual funds – global equity64 — 64 
Mutual funds – U.S. equity52 — 52 
Mutual funds – fixed income54 — 54 
603 51 654 
Level 2
Government issued debt securities— 18 18 
Corporate debt securities42 2 44 
Insurance contracts— 94 94 
Investment funds – fixed income— 1 1 
42 115 157 
Level 3
Investment funds – real estate135 68 203 
Private equity4 1 5 
Real estate – direct28 16 44 
167 85 252 
Total assets in fair value hierarchy812 251 1,063 
Investments measured at NAV Practical Expedient (a)
Investment funds – fixed income68 19 87 
Investment funds – global equity— 108 108 
Investment funds – emerging markets5 — 5 
Investment funds – real estate— 3 3 
 73 130 203 
Total investments at fair value$885 $381 $1,266 
 2021
 U.S. plan
assets		Non-U.S. plan
assets		Total
Level 1
Cash and cash equivalents$68 $21 $89 
Global large cap equity— 8 8 
U.S. large cap equity238 6 244 
U.S. mid/small cap equity332 25 357 
Mutual funds – global equity93 — 93 
Mutual funds – U.S. equity85 — 85 
Mutual funds – fixed income71 — 71 
887 60 947 
Level 2
Government issued debt securities— 17 17 
Corporate debt securities61 3 64 
Insurance contracts— 110 110 
Investment funds – fixed income— 38 38 
61 168 229 
Level 3
Investment funds – real estate79 92 171 
Private equity5 2 7 
Real estate – direct25 15 40 
109 109 218 
Total assets in fair value hierarchy1,057 337 1,394 
Investments measured at NAV Practical Expedient (a)
Investment funds – fixed income112 25 137 
Investment funds – global equity— 167 167 
Investment funds – emerging markets7 — 7 
119 192 311 
Total investments at fair value$1,176 $529 $1,705 

(a) Certain investments that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy.

Accrued income excluded from the tables above was as follows:
20222021
U.S. plan assets$1 $1 
Non-U.S. plan assets— — 

Plan assets include $265 and $357 of the Company’s common stock at December 31, 2022 and 2021.
The following tables reconcile the beginning and ending balances of plan assets measured using significant unobservable inputs (Level 3).
Hedge
funds		Private
equity		Real
estate		Total
Balance at January 1, 2021$2 $51 $307 $360 
Foreign currency translation— — (1)(1)
Asset returns – assets held at reporting date(1)(48)30 (19)
Asset returns – assets sold during the period1 39 3 43 
Purchases, sales and settlements, net(2)(35)(128)(165)
Balance at December 31, 2021— 7 211 218 
Foreign currency translation— — (9)(9)
Asset returns – assets held at reporting date— (2)(9)(11)
Asset returns – assets sold during the period— 1 9 10 
Purchases, sales and settlements, net— (1)45 44 
Balance at December 31, 2022$— $5 $247 $252 

The following table presents additional information about the pension plan assets valued using net asset value as a practical expedient:
Fair ValueRedemption FrequencyRedemption Notice Period
Balance at December 31, 2022
Investment funds – fixed income$87 Semi-monthly
1- 5 days
Investment funds – global equity108 Daily10 days
Investment funds – emerging markets5 Daily30 days
Investment funds – real estate3 Daily10 days
Balance at December 31, 2021
Investment funds – fixed income$137 Semi-monthly
1- 5 days
Investment funds – global equity167 Daily10 days
Investment funds – emerging markets7 Daily30 days

The pension plan assets valued using net asset value as a practical expedient do not have any unfunded commitments.

Pension assets and liabilities included in the Consolidated Balance Sheets were:
20222021
Non-current assets$88 $158 
Current liabilities8 11 
Non-current liabilities294 367 

The Company’s current liability at December 31, 2022, represents the expected required payments to be made for unfunded plans over the next twelve months. Total estimated 2023 employer contributions are $16 for the Company’s pension plans.

Changes in the net loss and prior service cost (credit) for the Company’s pension plans were: 
 202220212020
 Net lossPrior
service		Net lossPrior
service		Net lossPrior
service
Balance at January 1$814 $2 $1,802 $8 $1,808 $8 
Reclassification to net periodic benefit cost(49)(1)(1,629)(4)(150)(1)
Current year loss / (gain)(45)(1)640 (2)118 — 
Amendments— — (1)— — 1 
Foreign currency translation(8)— 2 — 26 — 
Balance at December 31$712 $— $814 $2 $1,802 $8 
Expected future benefit payments as of December 31, 2022 are:

 
U.S.
plans		Non-U.S.
plans
2023$91 $30 
2024101 29 
202599 31 
202685 31 
2027106 30 
2028 - 2032389 156 

The weighted average actuarial assumptions used to calculate the benefit obligations at December 31 were:
U.S. Plans202220212020
Discount rate5.2 %2.9 %2.5 %
Compensation increase5.0 %4.7 %4.7 %
Non-U.S. Plans202220212020
Discount rate4.9 %2.5 %1.4 %
Compensation increase2.7 %2.5 %3.0 %

The weighted average actuarial assumptions used to calculate pension expense for each year were:
U.S. Plans202220212020
Discount rate - service cost3.3 %3.1 %3.6 %
Discount rate - interest cost2.2 %1.7 %2.8 %
Compensation increase4.7 %4.7 %4.7 %
Long-term rate of return6.6 %5.7 %6.8 %
 
Non-U.S. Plans202220212020
Discount rate - service cost2.9 %2.2 %2.6 %
Discount rate - interest cost2.6 %1.8 %1.9 %
Compensation increase2.7 %2.5 %3.0 %
Long-term rate of return4.3 %3.3 %3.3 %

The expected long-term rate of return on plan assets is determined by taking into consideration expected long-term returns associated with each major asset class based on long-term historical ranges, inflation assumptions and the expected net value from active management of the assets based on actual results.

Other Postretirement Benefit Plans. The Company sponsors unfunded plans to provide health care and life insurance benefits to certain retirees and survivors. Generally, the medical plans pay a stated percentage of medical expenses reduced by deductibles and other coverages. Life insurance benefits are generally provided by insurance contracts. The Company reserves the right, subject to existing agreements, to change, modify or discontinue the plans. A measurement date of December 31 was used for the plans presented below.

The components of net postretirement benefits cost were as follows:
Other Postretirement Benefits202220212020
Service cost$1 $1 $1 
Interest cost4 4 5 
Amortization of prior service credit(20)(26)(26)
Amortization of actuarial loss2 4 4 
Net periodic benefit credit$(13)$(17)$(16)
Changes in the benefit obligations were:
20222021
Benefit obligations at January 1$137 $163 
Service cost1 1 
Interest cost4 4 
Actuarial (gain) / loss (22)(20)
Benefits paid(11)(10)
Foreign currency translation(1)(1)
Benefit obligations at December 31$108 $137 

Changes in the net (gain)/ loss and prior service credit for the Company’s postretirement benefit plans were:
 202220212020
 Net (gain) /
loss		Prior
service		Net
loss		Prior
service		Net
loss		Prior
service
Balance at January 1$21 $(20)$45 $(46)$42 $(72)
Reclassification to net periodic benefit cost(2)20 (4)26 (4)26 
Current year (gain) / loss(22)— (20)— 7 — 
Foreign currency translation1 — — — — — 
Balance at December 31$(2)$— $21 $(20)$45 $(46)


Expected future benefit payments are as follows:
 Benefit Payments
2023$13 
202411 
202511 
202610 
202710 
2028 - 203242 

The assumed health care cost trend rates at December 31, 2022 were as follows: 
Health care cost trend rate assumed for 20224.6 %
Rate that the cost trend rate gradually declines to4.1 %
Year that the rate reaches the rate it is assumed to remain2033

Weighted average discount rates used to calculate the benefit obligations at the end of each year and the cost for each year are presented below:

 
202220212020
Benefit obligations5.8 %3.4 %2.8 %
Service cost7.8 %5.9 %4.1 %
Interest cost5.7 %3.6 %3.3 %
Defined Contribution Benefit Plans. The Company also sponsors defined contribution benefit plans in certain jurisdictions including the U.S. and the U.K. The Company recognized expense of $13, $12, and $13 in 2022, 2021 and 2020 related to these plans.