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Post-employment benefits for associates (Tables)

12 Months Ended

Dec. 31, 2020

Employee Benefits [Abstract]

Summary of funded and unfunded Defined Benefit Obligations and Reconciliation of net liability

The following tables summarize the funded and unfunded DBO for pension and other post-employment benefit plans of Alcon associates at December 31, 2020 and 2019:

			Pension plans												Other post-employment benefit plans
($ millions)			2020						2019						2020						2019
Benefit obligation at January 1			723						662						423						385
Current service cost			31						22						14						8
Interest cost			12						13						15						15
Past service costs and settlements			9						2						(165)						—
Administrative expenses			1						1						—						—
Remeasurement losses arising from changes in financial assumptions			38						71						92						52
Remeasurement losses/(gains) arising from changes in demographic assumptions			2						6						(4)						(1)
Remeasurement (gains) arising from experience-related changes			(13)						(5)						(27)						(20)
Currency translation effects			44						1						—						—
Benefit payments			(36)						(15)						(25)						(16)
Contributions of associates			6						5						9						—
Effect of acquisitions, divestments or transfers			—						(40)						—						—
Benefit obligation at December 31			817						723						332						423
Fair value of plan assets at January 1			451						424						—						40
Interest income			7						8						—						1
Return on plan assets excluding interest income			32						36						—						3
Currency translation effects			24						7						—						—
Employer contributions			25						21						16						(28)
Contributions of associates			6						5						9						—
Settlements			(2)						—						—						—
Benefit payments			(36)						(15)						(25)						(16)
Effect of acquisitions, divestments or transfers			12						(35)						—						—
Fair value of plan assets at December 31			519						451						—						—
Funded status			(298)						(272)						(332)						(423)
Limitation on recognition of fund surplus at January 1			(6)						(4)
Change in limitation on recognition of fund surplus (including exchange rate differences)			(11)						(2)
Limitation on recognition of fund surplus at December 31			(17)						(6)
Net liability in the balance sheet at December 31			(315)						(278)						(332)						(423)

The reconciliation of the net liability from January 1 to December 31 is as follows:

			Pension plans												Other post- employment benefit plans
($ millions)			2020						2019						2020						2019
Net liability at January 1			(278)						(242)						(423)						(345)
Current service cost			(31)						(22)						(14)						(8)
Net interest expense			(5)						(5)						(15)						(14)
Administrative expenses			(1)						(1)						—						—
Past service costs and settlements			(11)						(2)						165						—
Remeasurements			5						(36)						(61)						(28)
Currency translation effects			(20)						6						—						—
Employer contributions			25						21						16						(28)
Effect of acquisitions, divestments or transfers			12						5						—						—
Change in limitation on recognition of fund surplus			(11)						(2)						—						—
Net liability at December 31			(315)						(278)						(332)						(423)
Amounts recognized in the balance sheet
Prepaid benefit cost			24						13						—						—
Accrued benefit liability			(339)						(291)						(332)						(423)

Breakdown of DBO for pension plans by geography and type of member

The following tables provide detail of the DBO for pension plans by geography and type of member and of plan assets based on the geographical locations in which they are held:

			2020
($ millions)			Switzerland						United States						Germany						United Kingdom						Rest of the world						Total
By type of member
Active			(251)						(53)						(76)						—						(125)						(505)
Deferred pensioners			(12)						(50)						(32)						(62)						(17)						(173)
Pensioners			(26)						(35)						(26)						(42)						(10)						(139)
Benefit obligation at December 31			(289)						(138)						(134)						(104)						(152)						(817)
Thereof: unfunded plans			51						30						—						—						31						112
Thereof: unfunded portion of funded plans			84						14						115						—						14						227
Prepaid benefit costs and limitation on recognition of fund surplus			—						—						—						(23)						(18)						(41)
Fair value of plan assets at December 31			154						94						19						127						125						519
Funded status			(135)						(44)						(115)						23						(27)						(298)

			2019
($ millions)			Switzerland						United States						Germany						United Kingdom						Rest of the world						Total
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)
Benefit obligation at December 31			(244)						(127)						(109)						(98)						(145)						(723)
Thereof: unfunded plans			47						29						—						—						23						99
Thereof: unfunded portion of funded plans			65						18						92						—						17						192
Prepaid benefit costs and limitation on recognition of fund surplus			—						—						—						(11)						(8)						(19)
Fair value of plan assets at December 31			132						80						17						109						113						451
Funded status			(112)						(47)						(92)						11						(32)						(272)

Defined benefit plans assumptions

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
			2020						2019						2020						2019
Discount rate			1.2		%				1.7		%				2.3		%				3.3		%
Expected rate of pension increase			1.1		%				1.2		%
Expected rate of salary increase			2.4		%				3.3		%
Interest on savings account			1.0		%				1.0		%
Current average life expectancy for a 65-year-old male (in years)			20						21						20						21
Current average life expectancy for a 65-year-old female (in years)			23						24						22						23

The following table shows additional details related to the weighted average discount rates for the principal plan for each significant country:

			Pension plans												Other post-employment benefit plans
			2020						2019						2020						2019
Switzerland			0.1		%				0.3		%
United States			2.4		%				3.1		%				2.3		%				3.3		%
Germany			0.8		%				1.1		%
United Kingdom			1.3		%				2.0		%

he healthcare cost trend rate assumptions used for other post-employment benefits are as follows:

			2020						2019						2018
Healthcare cost trend rate assumed for next year			6.2		%				6.5		%				7.0		%
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						2028

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, 2020:

($ millions)			Change in 2020 year-end
25 basis point increase in discount rate			(42)
25 basis point decrease in discount rate			46
1 year increase in life expectancy			31
25 basis point increase in rate of pension increase			15
25 basis point decrease in rate of pension increase(1)			(7)
25 basis point increase of interest on savings account			4
25 basis point decrease of interest on savings account			(3)
25 basis point increase in rate of salary increase			6
25 basis point decrease in rate of salary increase			(4)

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, 2020, and 2019:

			Pension plans
(as a percentage)			Long-term target minimum						Long-term target maximum						2020						2019
Equity securities			15						40						31						32
Debt securities			20						60						46						42
Real estate			5						20						7						7
Alternative investments			0						20						10						15
Cash and other investments			0						15						6						4
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, 2020:

($ millions)			Pension plans						Other post-employment benefit plans
Expected employer contributions to funded plans
2021 (estimated)			11						—
Expected future benefit payments
2021			44						19
2022			26						21
2023			28						22
2024			32						23
2025			32						23
2026-2030			185						110

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The disclosure of an analysis of the present value of a defined benefit obligation that distinguishes the nature, characteristics and risks of the obligation. Such a disclosure could distinguish: (a) between amounts owing to active members, deferred members, and pensioners; (b) between vested benefits and accrued but not vested benefits; and (c) between conditional benefits, amounts attributable to future salary increases and other benefits. [Refer: Defined benefit obligation, at present value]

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