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Post-employment benefits for associates (Tables)
 12 Months Ended
Dec. 31, 2019
Employee Benefits [Abstract]  
Summary of funded and unfunded Defined Benefit Obligations and Reconciliation of net liability
The reconciliation of the net liability from January 1 to December 31 is as follows:
 
Pension plans
 
Other post-employment
benefit plans
($ millions)
2019

 
2018

 
2019

 
2018

Net liability at January 1
(242
)
 
(232
)
 
(345
)
 
(317
)
Current service cost
(22
)
 
(28
)
 
(8
)
 
(11
)
Net interest expense
(5
)
 
(6
)
 
(14
)
 
(11
)
Administrative expenses
(1
)
 
(1
)
 
—

 
—

Past service costs and settlements
(2
)
 
(1
)
 
—

 
—

Remeasurements
(36
)
 
1

 
(28
)
 
5

Currency translation effects
6

 
6

 
—

 
—

Employer contributions
21

 
19

 
(28
)
 
(11
)
Effect of acquisitions, divestments or transfers
5

 
(2
)
 
—

 
—

Change in limitation on recognition of fund surplus
(2
)
 
2

 
—

 
—

Net liability at December 31
(278
)
 
(242
)
 
(423
)
 
(345
)
 
 
 
 
 
 
 
 
Amounts recognized in the balance sheet
 
 
 
 
 
 
 
Prepaid benefit cost
13

 
12

 
—

 
—

Accrued benefit liability
(291
)
 
(254
)
 
(423
)
 
(345
)

The following tables summarize the funded and unfunded DBO for pension and other post-employment benefit plans of Alcon associates at December 31, 2019 and 2018:
 
Pension plans
 
Other post-employment
benefit plans
($ millions)
2019

 
2018

 
2019

 
2018

Benefit obligation at January 1
662

 
671

 
385

 
382

Current service cost
22

 
28

 
8

 
11

Interest cost
13

 
15

 
15

 
13

Past service costs and settlements
2

 
—

 
—

 
—

Administrative expenses
1

 
1

 
—

 
—

Remeasurement losses/(gains) arising from changes in financial assumptions
71

 
(17
)
 
52

 
(3
)
Remeasurement losses/(gains) arising from changes in demographic assumptions
6

 
1

 
(1
)
 
6

Experience-related remeasurement (gains)/losses
(5
)
 
2

 
(20
)
 
(11
)
Currency translation effects
1

 
(15
)
 
—

 
—

Benefit payments
(15
)
 
(29
)
 
(16
)
 
(13
)
Contributions of associates
5

 
4

 
—

 
—

Effect of acquisitions, divestments or transfers
(40
)
 
1

 
—

 
—

Benefit obligation at December 31
723

 
662

 
423

 
385

Fair value of plan assets at January 1
424

 
445

 
40

 
65

Interest income
8

 
9

 
1

 
2

Return on plan assets excluding interest income
36

 
(13
)
 
3

 
(3
)
Currency translation effects
7

 
(9
)
 
—

 
—

Employer contributions
21

 
19

 
(28
)
 
(11
)
Contributions of associates
5

 
4

 
—

 
—

Settlements
—

 
(1
)
 
—

 
—

Benefit payments
(15
)
 
(29
)
 
(16
)
 
(13
)
Effect of acquisitions, divestments or transfers
(35
)
 
(1
)
 
—

 
—

Fair value of plan assets at December 31
451

 
424

 
—

 
40

Funded status
(272
)
 
(238
)
 
(423
)
 
(345
)
Limitation on recognition of fund surplus at January 1
(4
)
 
(6
)
 


 


Change in limitation on recognition of fund surplus (including exchange rate differences)
(2
)
 
2

 


 


Limitation on recognition of fund surplus at December 31
(6
)
 
(4
)
 


 


Net liability in the balance sheet at December 31
(278
)
 
(242
)
 
(423
)
 
(345
)
Breakdown of DBO for pension plans by geography and type of member
The following tables show a breakdown of the DBO for pension plans by geography and type of member and the breakdown of plan assets into the geographical locations in which they are held:
 
2019
($ millions)
Switzerland

 
United
States

 
Germany

 
United
Kingdom

 
Rest of
the world

 
Total

Benefit obligation at December 31
244

 
127

 
109

 
98

 
145

 
723

Thereof: unfunded plans
47

 
29

 
—

 
—

 
23

 
99

Thereof: unfunded portion of funded plans(1)
65

 
18

 
92

 
—

 
17

 
192

 
 
 
 
 
 
 
 
 
 
 
 
By type of member
 
 
 
 
 
 
 
 
 
 
 
Active
216

 
40

 
61

 
—

 
123

 
440

Deferred pensioners
12

 
46

 
27

 
54

 
12

 
151

Pensioners
16

 
41

 
21

 
44

 
10

 
132

Fair value of plan assets at December 31
132

 
80

 
17

 
109

 
113

 
451

Funded status
(112
)
 
(47
)
 
(92
)
 
11

 
(32
)
 
(272
)
(1) Excludes $8 million of Prepaid benefit costs and the limitation on recognition of fund surplus.
 
2018
($ millions)
Switzerland

 
United
States

 
Germany

 
United
Kingdom

 
Rest of
the world

 
Total

Benefit obligation at December 31
201

 
111

 
94

 
86

 
170

 
662

Thereof: unfunded plans
49

 
21

 
—

 
—

 
18

 
88

Thereof: unfunded portion of funded plans(1)
46

 
23

 
78

 
—

 
19

 
166

 
 
 
 
 
 
 
 
 
 
 
 
By type of member
 
 
 
 
 
 
 
 
 
 
 
Active
166

 
36

 
56

 
—

 
148

 
406

Deferred pensioners
18

 
32

 
22

 
69

 
9

 
150

Pensioners
17

 
43

 
16

 
17

 
13

 
106

Fair value of plan assets at December 31
106

 
67

 
16

 
98

 
137

 
424

Funded status
(95
)
 
(44
)
 
(78
)
 
12

 
(33
)
 
(238
)
(1) Excludes $4 million of Prepaid benefit cost and the limitation on recognition of fund surplus.
Defined benefit plans assumptions
The healthcare cost trend rate assumptions used for other post-employment benefits are as follows:
 
2019

 
2018

 
2017

Healthcare cost trend rate assumed for next year
6.5
%
 
7.0
%
 
6.5
%
Rate to which the cost trend rate is assumed to decline
4.5
%
 
4.5
%
 
4.5
%
Year that the rate reaches the ultimate trend rate
2028

 
2028

 
2025


The following table shows the principal weighted average actuarial assumptions used for calculating defined benefit plans and other post-employment benefits of Alcon associates:
 
Pension plans
 
Other post-employment
benefit plans
 
2019

 
2018

 
2019

 
2018

Discount rate
1.7
%
 
2.2
%
 
3.3
%
 
4.3
%
Expected rate of pension increase
1.2
%
 
1.1
%
 


 


Expected rate of salary increase
3.3
%
 
2.8
%
 


 


Interest on savings account
1.0
%
 
0.8
%
 


 


Current average life expectancy for a 65-year-old male (in years)
21

 
21

 
21

 
21

Current average life expectancy for a 65-year-old female (in years)
24

 
23

 
23

 
23
Disclosure of sensitivity analysis for actuarial assumptions
The following table shows the sensitivity of the defined benefit pension and other post-employment benefit obligations to the principal actuarial assumptions as of December 31, 2019:
($ millions)
Change in 2019 year-end

25 basis point increase in discount rate
(43
)
25 basis point decrease in discount rate
46

1 year increase in life expectancy
32

25 basis point increase in rate of pension increase
15

25 basis point decrease in rate of pension increase
(27
)
25 basis point increase of interest on savings account
2

25 basis point decrease of interest on savings account
(2
)
25 basis point increase in rate of salary increase
6

25 basis point decrease in rate of salary increase
(6
)
Fair value of plan assets and asset allocation
The following table shows the weighted average plan asset allocation of funded defined benefit pension plans at December 31, 2019, and 2018:
 
Pension plans
(as a percentage)
Long-term
target minimum
 
Long-term
target maximum
 
2019
 
2018
Equity securities
15
 
40
 
32
 
28
Debt securities
20
 
60
 
42
 
43
Real estate
5
 
20
 
7
 
9
Alternative investments
0
 
20
 
15
 
17
Cash and other investments
0
 
15
 
4
 
3
Total
 
 
 
 
100
 
100
Schedule of expected future cash flows for benefit plans
The following table summarizes expected future cash flows for pension and other post-employment benefit plans as of December 31, 2019:
($ millions)
Pension plans

 
Other
post-employment
benefit plans

Employer contributions


 


2020 (estimated)
14

 
—

Expected future benefit payments


 


2020
41

 
21

2021
26

 
22

2022
27

 
24

2023
27

 
25

2024
32

 
26

2025-2029
169

 
133