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Post-employment benefits for associates (Tables)
 12 Months Ended
Dec. 31, 2020
Statement [line items]  
Summary of the funded and unfunded defined benefit obligation for pension and other post retirement benefit plans table
Pension plans
Other post-employment benefit plans
(USD millions)
2020
2019
2020
2019
Benefit obligation at January 1
23 066
22 179
746
1 073
Benefit obligations related to discontinued operations  1
– 662
– 385
Current service cost
372
336
11
13
Interest cost
222
330
20
29
Past service costs and settlements
– 102
– 168
1
Administrative expenses
24
24
Remeasurement losses/(gains) arising from changes in financial assumptions
1 166
1 791
40
76
Remeasurement (gains)/losses arising from changes in demographic assumptions
– 28
– 193
– 13
– 9
Experience-related remeasurement losses/(gains)
159
184
– 132
– 22
Currency translation effects
1 810
283
– 7
Benefit payments
– 1 264
– 1 256
– 33
– 30
Contributions of associates
186
169
Effect of acquisitions, divestments or transfers
– 9
49
– 1
1
Benefit obligation at December 31
25 602
23 066
632
746
Fair value of plan assets at January 1
19 810
18 838
134
119
Plan assets related to discontinued operations  1
– 424
– 40
Interest income
166
257
4
3
Return on plan assets excluding interest income
1 318
1 656
4
10
Currency translation effects
1 620
304
Novartis Group contributions
464
420
– 20
74
Contributions of associates
186
169
Settlements
15
– 193
Benefit payments
– 1 264
– 1 256
– 33
– 30
Effect of acquisitions, divestments or transfers
2
39
– 2
Fair value of plan assets at December 31
22 317
19 810
89
134
Funded status
– 3 285
– 3 256
– 543
– 612
Limitation on recognition of fund surplus at January 1
– 65
– 68
Change in limitation on recognition of fund surplus (incl. exchange rate differences)
16
7
Interest income on limitation of fund surplus
– 2
– 4
Limitation on recognition of fund surplus at December 31
– 51
– 65
Net liability in the balance sheet at December 31
– 3 336
– 3 321
– 543
– 612
 
 1  Notes 1, 2 and 30 provide information related to discontinued operations.
Reconciliation of the net liability table
Pension plans
Other post-employment benefit plans
(USD millions)
2020
2019
2020
2019
Net liability at January 1
– 3 321
– 3 409
– 612
– 954
Less: net liability related to discontinued operations  1
238
345
Current service cost
– 372
– 336
– 11
– 13
Net interest expense
– 58
– 77
– 16
– 26
Administrative expenses
– 24
– 24
Past service costs and settlements
117
– 25
– 1
Remeasurements
21
– 126
109
– 35
Currency translation effects
– 190
21
7
Novartis Group contributions
464
420
– 20
74
Effect of acquisitions, divestments or transfers
11
– 10
1
– 3
Change in limitation on recognition of fund surplus
16
7
Net liability at December 31
– 3 336
– 3 321
– 543
– 612
Amounts recognized in the consolidated balance sheet
Prepaid benefit cost
202
148
Accrued benefit liability
– 3 538
– 3 469
– 543
– 612
 
 1  Notes 1, 2 and 30 provide information related to discontinued operations.
Principal weighted average actuarial assumptions
Pension plans
Other post-employment benefit plans
2020
2019
2018
2020
2019
2018
Weighted average assumptions used to determine benefit obligations at December 31
Discount rate
0.6%
1.0%
1.6%
2.9%
3.6%
4.4%
Expected rate of pension increase
0.3%
0.3%
0.4%
Expected rate of salary increase
2.7%
2.8%
2.8%
Interest on savings account
0.1%
0.3%
0.8%
Current average life expectancy

for a 65-year-old male in years


22


22


22


21


21


21
Current average life expectancy

for a 65-year-old female in years


24


24


24


23


23


23
The sensitivity of the defined benefit pension obligation to the principal actuarial assumptions


(USD millions)
Change in 2020 year-end

defined benefit pension obligation
25 basis point increase in discount rate
– 885
25 basis point decrease in discount rate
942
One-year increase in life expectancy
993
25 basis point increase in rate of pension increase
589
25 basis point decrease in rate of pension increase
– 143
25 basis point increase of interest on savings account
62
25 basis point decrease of interest on savings account
– 30
25 basis point increase in rate of salary increase
61
25 basis point decrease in rate of salary increase
– 61
The healthcare cost trend rate assumptions used for other post-employment benefits
2020
2019
2018
Healthcare cost trend rate

assumed for next year


6.3%


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
The weighted average plan asset allocation of funded defined benefit pension plans
Pension plans


(as a percentage)
Long-term

target

minimum
Long-term

target

maximum




2020




2019
Equity securities
15
40
28
27
Debt securities
20
60
34
36
Real estate
5
20
17
17
Alternative investments
0
20
13
15
Cash and other investments
0
15
8
5
Total
100
100
Asset allocation, investments in shares of Novartis AG
December 31,

2020
December 31,

2019
Investment in shares of Novartis AG
Number of shares (in millions)
2.3
2.3
Market value (in USD billions)
0.2
0.2
The expected future cash flows in respect of pension and other post- employment benefit plans


(USD millions)




Pension plans
Other post-

employment

benefit plans
Novartis Group contributions
2021 (estimated)
404
40
Expected future benefit payments
2021
1 245
40
2022
1 198
41
2023
1 191
41
2024
1 182
40
2025
1 165
40
2026–2030
5 651
181
Defined contribution plans
(USD millions)
2020
2019
2018
Contributions for defined contribution plans continuing operations
501
422
443
Pension plans  
Statement [line items]  
Breakdown of defined benefit obligation for pension plans and other post-employment benefit
2020
2019


(USD millions)


Switzerland
United

States
Rest of

the world


Total


Switzerland
United

States
Rest of

the world


Total
Benefit obligation at December 31
16 807
3 788
5 007
25 602
15 106
3 552
4 408
23 066
Thereof unfunded
701
516
1 217
670
466
1 136
By type of member
Active
6 837
665
1 573
9 075
6 167
630
1 400
8 197
Deferred pensioners
1 290
1 819
3 109
1 205
1 517
2 722
Pensioners
9 970
1 833
1 615
13 418
8 939
1 717
1 491
12 147
Fair value of plan assets at December 31
16 396
2 487
3 434
22 317
14 457
2 311
3 042
19 810
Funded status
– 411
– 1 301
– 1 573
– 3 285
– 649
– 1 241
– 1 366
– 3 256
Other post-employment benefit plans  
Statement [line items]  
Breakdown of defined benefit obligation for pension plans and other post-employment benefit
2020
2019


(USD millions)
United

States
Rest of

the world


Total
United

States
Rest of

the world


Total
Benefit obligation at December 31
543
89
632
658
88
746
Thereof unfunded
454
89
543
524
88
612
By type of member
Active
80
25
105
121
36
157
Deferred pensioners
17
0
17
15
0
15
Pensioners
446
64
510
522
52
574
Fair value of plan assets at December 31
89
0
89
134
0
134
Funded status
– 454
– 89
– 543
– 524
– 88
– 612