($ in millions) |
2013 | 2012 | 2011 | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Interest expense recognized by ESOP |
$ | 2 | $ | 2 | $ | 2 | ||||
Less: dividends accrued on ESOP shares |
(3 | ) | (2 | ) | (2 | ) | ||||
Cost of shares allocated |
7 | 2 | 2 | |||||||
| | | | | | | | | | |
Compensation expense |
6 | 2 | 2 | |||||||
Reduction of defined contribution due to ESOP |
46 | 10 | 9 | |||||||
| | | | | | | | | | |
ESOP benefit |
$ | (40 | ) | $ | (8 | ) | $ | (7 | ) | |
| | | | | | | | | | |
| | | | | | | | | | |
($ in millions) |
Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
Balance as of December 31, 2013 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity securities: |
|||||||||||||
U.S. |
$ | — | $ | 2,124 | $ | 78 | $ | 2,202 | |||||
International |
160 | 182 | 159 | 501 | |||||||||
Fixed income securities: |
|||||||||||||
U.S. government and agencies |
608 | 52 | — | 660 | |||||||||
Foreign government |
— | 44 | — | 44 | |||||||||
Municipal |
— | — | 18 | 18 | |||||||||
Corporate |
— | 1,433 | 18 | 1,451 | |||||||||
RMBS |
— | 83 | — | 83 | |||||||||
Short-term investments |
54 | 344 | — | 398 | |||||||||
Limited partnership interests: |
|||||||||||||
Real estate funds (1) |
— | — | 197 | 197 | |||||||||
Private equity funds (2) |
— | — | 211 | 211 | |||||||||
Hedge funds (3) |
— | — | 9 | 9 | |||||||||
Cash and cash equivalents |
25 | — | — | 25 | |||||||||
Free-standing derivatives: |
|||||||||||||
Assets |
1 | 3 | — | 4 | |||||||||
Liabilities |
(1 | ) | — | — | (1 | ) | |||||||
| | | | | | | | | | | | | |
Total plan assets at fair value |
$ | 847 | $ | 4,265 | $ | 690 | 5,802 | ||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
% of total plan assets at fair value |
14.6 | % | 73.5 | % | 11.9 | % | 100.0 | % | |||||
Securities lending obligation (4) |
(290 |
) | |||||||||||
Other net plan assets (5) |
90 | ||||||||||||
| | | | | | | | | | | | | |
Total reported plan assets |
$ | 5,602 | |||||||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
($ in millions) |
Quoted prices in active markets for identical assets (Level 1) |
Significant other observable inputs (Level 2) |
Significant unobservable inputs (Level 3) |
Balance as of December 31, 2012 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity securities: |
|||||||||||||
U.S. |
$ | 13 | $ | 2,042 | $ | 68 | $ | 2,123 | |||||
International |
136 | 198 | 246 | 580 | |||||||||
Fixed income securities: |
|||||||||||||
U.S. government and agencies |
799 | 78 | — | 877 | |||||||||
Foreign government |
— | 32 | — | 32 | |||||||||
Municipal |
— | — | 129 | 129 | |||||||||
Corporate |
— | 994 | 10 | 1,004 | |||||||||
RMBS |
— | 95 | — | 95 | |||||||||
Short-term investments |
56 | 424 | — | 480 | |||||||||
Limited partnership interests: |
|||||||||||||
Real estate funds |
— | — | 214 | 214 | |||||||||
Private equity funds |
— | — | 199 | 199 | |||||||||
Hedge funds |
— | — | 80 | 80 | |||||||||
Cash and cash equivalents |
17 | — | — | 17 | |||||||||
Free-standing derivatives: |
|||||||||||||
Assets |
— | — | — | — | |||||||||
Liabilities |
— | — | — | — | |||||||||
| | | | | | | | | | | | | |
Total plan assets at fair value |
$ | 1,021 | $ | 3,863 | $ | 946 | 5,830 | ||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
% of total plan assets at fair value |
17.5 | % | 66.3 | % | 16.2 | % | 100.0 | % | |||||
Securities lending obligation |
(463 |
) | |||||||||||
Other net plan assets |
31 | ||||||||||||
| | | | | | | | | | | | | |
Total reported plan assets |
$ | 5,398 | |||||||||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
Target asset allocation |
Actual percentage of plan assets |
||||||||
---|---|---|---|---|---|---|---|---|---|---|
Asset category |
2013 | 2013 | 2012 | |||||||
Equity securities |
40 - 50 | % | 49 | % | 50 | % | ||||
Fixed income securities |
43 - 52 | 41 | 38 | |||||||
Limited partnership interests |
12 - 18 | 7 | 9 | |||||||
Short-term investments and other |
— | 3 | 3 | |||||||
| | | | | | | | | | |
Total (1) |
100 | % | 100 | % | ||||||
| | | | | | | | | | |
| | | | | | | | | | |
($ in millions) |
Pension benefits |
Postretirement benefits |
|||||
---|---|---|---|---|---|---|---|
Net actuarial loss (gain) |
$ | 115 | $ | (22 | ) | ||
Prior service credit |
(58 | ) | (23 | ) |
Pension benefits | Postretirement benefits | ||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
($ in millions) |
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||
Discount rate |
4.60 | % | 5.25 | % | 6.00 | % | 3.75 | % | 5.25 | % | 6.00 | % | |||||||
Rate of increase in compensation levels |
3.5 | 4.5 | 4.0-4.5 | n/a | n/a | n/a | |||||||||||||
Expected long-term rate of return on plan assets |
7.75 | 8.5 | 8.5 | n/a | n/a | n/a |
Weighted average assumptions used to determine benefit obligations as of December 31 are listed in the following table.
|
Pension benefits | Postretirement benefits | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013 | 2012 | 2013 | 2012 | |||||||||
Discount rate |
5.00 | % | 4.00 | % | 4.85 | % | 4.25 | % | |||||
Rate of increase in compensation levels |
3.5 | 3.5 | n/a | n/a |
($ in millions) |
2013 | 2012 | |||||
---|---|---|---|---|---|---|---|
Fair value of plan assets, beginning of year |
$ | 5,398 | $ | 4,675 | |||
Actual return on plan assets |
566 | 594 | |||||
Employer contribution |
561 | 439 | |||||
Benefits paid |
(892 | ) | (312 | ) | |||
Translation adjustment and other |
(31 | ) | 2 | ||||
| | | | | | | |
Fair value of plan assets, end of year |
$ | 5,602 | $ | 5,398 | |||
| | | | | | | |
| | | | | | | |
($ in millions) |
Pension benefits | Postretirement benefits |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013 | 2012 | 2013 | 2012 | |||||||||
Benefit obligation, beginning of year |
$ | 6,727 | $ | 5,831 | $ | 803 | $ | 716 | |||||
Service cost |
140 | 152 | 12 | 13 | |||||||||
Interest cost |
265 | 298 | 28 | 36 | |||||||||
Participant contributions |
1 | 1 | 18 | 20 | |||||||||
Actuarial (gain) loss |
(406 | ) | 756 | (32 | ) | 76 | |||||||
Benefits paid (1) |
(892 | ) | (312 | ) | (57 | ) | (59 | ) | |||||
Plan amendments |
(506 | ) | — | — | — | ||||||||
Translation adjustment and other |
(31 | ) | 1 | (5 | ) | 1 | |||||||
Curtailment gain |
(1 | ) | — | (285 | ) | — | |||||||
| | | | | | | | | | | | | |
Benefit obligation, end of year |
$ | 5,297 | $ | 6,727 | $ | 482 | $ | 803 | |||||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
($ in millions) |
|
Actual return on plan assets: | |
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance as of December 31, 2012 |
Relating to assets sold during the period |
Relating to assets still held at the reporting date |
Purchases, sales and settlements, net |
Net transfers in and/or (out) of Level 3 |
Balance as of December 31, 2013 |
|||||||||||||
Equity securities: |
|||||||||||||||||||
U.S. |
$ | 68 | $ | — | $ | 10 | $ | — | $ | — | $ | 78 | |||||||
International |
246 | 3 | 8 | (98 | ) | — | 159 | ||||||||||||
Fixed income securities: |
|||||||||||||||||||
Municipal |
129 | 7 | 1 | (119 | ) | — | 18 | ||||||||||||
Corporate |
10 | 5 | — | 3 | — | 18 | |||||||||||||
Limited partnership interests: |
|||||||||||||||||||
Real estate funds |
214 | — | 11 | (28 | ) | — | 197 | ||||||||||||
Private equity funds |
199 | — | (2 | ) | 14 | — | 211 | ||||||||||||
Hedge funds |
80 | — | — | (71 | ) | — | 9 | ||||||||||||
| | | | | | | | | | | | | | | | | | | |
Total Level 3 plan assets |
$ | 946 | $ | 15 | $ | 28 | $ | (299 | ) | $ | — | $ | 690 | ||||||
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
($ in millions) |
|
Actual return on plan assets: | |
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance as of December 31, 2011 |
Relating to assets sold during the period |
Relating to assets still held at the reporting date |
Purchases, sales and settlements, net |
Net transfers in and/or (out) of Level 3 |
Balance as of December 31, 2012 |
|||||||||||||
Equity securities: |
|||||||||||||||||||
U.S. |
$ | 64 | $ | — | $ | 7 | $ | (3 | ) | $ | — | $ | 68 | ||||||
International |
245 | — | 1 | — | — | 246 | |||||||||||||
Fixed income securities: |
|||||||||||||||||||
Municipal |
163 | 5 | (2 | ) | (37 | ) | — | 129 | |||||||||||
Corporate |
9 | 1 | — | — | — | 10 | |||||||||||||
Limited partnership interests: |
|||||||||||||||||||
Real estate funds |
192 | 16 | 2 | 4 | — | 214 | |||||||||||||
Private equity funds |
186 | 8 | (6 | ) | 11 | — | 199 | ||||||||||||
Hedge funds |
79 | — | 1 | — | — | 80 | |||||||||||||
| | | | | | | | | | | | | | | | | | | |
Total Level 3 plan assets |
$ | 938 | $ | 30 | $ | 3 | $ | (25 | ) | $ | — | $ | 946 | ||||||
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
($ in millions) |
|
Actual return on plan assets: | |
|
|
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance as of December 31, 2010 |
Relating to assets sold during the period |
Relating to assets still held at the reporting date |
Purchases, sales and settlements, net |
Net transfers in and/or (out) of Level 3 |
Balance as of December 31, 2011 |
|||||||||||||
Equity securities: |
|||||||||||||||||||
U.S. |
$ | 6 | $ | — | $ | (2 | ) | $ | 60 | $ | — | $ | 64 | ||||||
International |
253 | — | (5 | ) | (3 | ) | — | 245 | |||||||||||
Fixed income securities: |
|||||||||||||||||||
Municipal |
222 | — | 1 | (60 | ) | — | 163 | ||||||||||||
Corporate |
10 | 1 | — | (2 | ) | — | 9 | ||||||||||||
RMBS |
48 | (8 | ) | 8 | (30 | ) | (18 | ) | — | ||||||||||
Limited partnership interests: |
|||||||||||||||||||
Real estate funds |
167 | (1 | ) | 29 | (3 | ) | — | 192 | |||||||||||
Private equity funds |
166 | 1 | 22 | (3 | ) | — | 186 | ||||||||||||
Hedge funds |
120 | 43 | (43 | ) | (41 | ) | — | 79 | |||||||||||
| | | | | | | | | | | | | | | | | | | |
Total Level 3 plan assets |
$ | 992 | $ | 36 | $ | 10 | $ | (82 | ) | $ | (18 | ) | $ | 938 | |||||
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Estimated future benefit payments expected to be paid in the next 10 years, based on the assumptions used to measure the Company's benefit obligation as of December 31, 2013, are presented in the table below.
($ in millions) |
Pension benefits |
Postretirement benefits |
|||||
---|---|---|---|---|---|---|---|
2014 |
$ | 355 | $ | 35 | |||
2015 |
367 | 36 | |||||
2016 |
390 | 29 | |||||
2017 |
420 | 30 | |||||
2018 |
438 | 32 | |||||
2019-2023 |
2,481 | 188 | |||||
| | | | | | | |
Total benefit payments |
$ | 4,451 | $ | 350 | |||
| | | | | | | |
| | | | | | | |
|
Pension benefits | Postretirement benefits | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
($ in millions) |
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||
Service cost |
$ | 140 | $ | 152 | $ | 151 | $ | 12 | $ | 13 | $ | 11 | |||||||
Interest cost |
265 | 298 | 322 | 28 | 36 | 37 | |||||||||||||
Expected return on plan assets |
(394 | ) | (393 | ) | (367 | ) | — | — | — | ||||||||||
Amortization of: |
|||||||||||||||||||
Prior service credit |
(28 | ) | (2 | ) | (2 | ) | (23 | ) | (23 | ) | (23 | ) | |||||||
Net actuarial loss (gain) |
235 | 178 | 154 | (16 | ) | (20 | ) | (30 | ) | ||||||||||
Settlement loss |
277 | 33 | 46 | — | — | 1 | |||||||||||||
Curtailment gain |
— | — | — | (181 | ) | — | — | ||||||||||||
| | | | | | | | | | | | | | | | | | | |
Net periodic cost (credit) |
$ | 495 | $ | 266 | $ | 304 | $ | (180 | ) | $ | 6 | $ | (4 | ) | |||||
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
($ in millions) |
Pension benefits |
Postretirement benefits |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2013 | 2012 | 2013 | 2012 | |||||||||
Fair value of plan assets |
$ | 5,602 | $ | 5,398 | $ | — | $ | — | |||||
Less: Benefit obligation |
5,297 | 6,727 | 482 | 803 | |||||||||
| | | | | | | | | | | | | |
Funded status |
$ | 305 | $ | (1,329 | ) | $ | (482 | ) | $ | (803 | ) | ||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Items not yet recognized as a component of net periodic cost: |
|||||||||||||
Net actuarial loss (gain) |
$ | 1,794 | $ | 2,892 | $ | (236 | ) | $ | (115 | ) | |||
Prior service credit |
(480 | ) | (1 | ) | (106 | ) | (129 | ) | |||||
| | | | | | | | | | | | | |
Unrecognized pension and other postretirement benefit cost, pre-tax |
1,314 |
2,891 |
(342 |
) |
(244 |
) | |||||||
Deferred income tax |
(460 | ) | (1,012 | ) | 126 | 94 | |||||||
| | | | | | | | | | | | | |
Unrecognized pension and other postretirement benefit cost |
$ | 854 | $ | 1,879 | $ | (216 | ) | $ | (150 | ) | |||
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
($ in millions) |
Pension benefits |
Postretirement benefits |
|||||
---|---|---|---|---|---|---|---|
Items not yet recognized as a component of net periodic cost — |
$ | 2,891 | $ | (244 | ) | ||
Net actuarial gain arising during the period |
(579 | ) | (32 | ) | |||
Net actuarial (loss) gain amortized to net periodic benefit cost |
(512 | ) | 16 | ||||
Prior service credit arising during the period |
(506 | ) | — | ||||
Prior service credit amortized to net periodic benefit cost |
28 | 23 | |||||
Plan curtailment |
— | (104 | ) | ||||
Translation adjustment and other |
(8 | ) | (1 | ) | |||
| | | | | | | |
Items not yet recognized as a component of net periodic cost — |
$ | 1,314 | $ | (342 | ) | ||
| | | | | | | |
| | | | | | | |