Retirement-Related Benefits (Tables)
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12 Months Ended |
Dec. 31, 2021 |
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| Retirement-Related Benefits |
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| Pre-tax cost for all retirement-related plans |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | | | U.S. Plans | | Non-U.S. Plans | | Total | For the year ended December 31: | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | Defined benefit pension plans | | $ | 303 | | $ | 167 | | $ | (153) | | $ | 1,119 | | $ | 1,057 | | $ | 842 | | $ | 1,422 | | $ | 1,224 | | $ | 689 | Retention Plan | | | 16 | | | 11 | | | 11 | | | — | | | — | | | — | | | 16 | | | 11 | | | 11 | Total defined benefit pension plans (income)/cost | | $ | 319 | | $ | 178 | | $ | (142) | | $ | 1,119 | | $ | 1,057 | | $ | 842 | | $ | 1,438 | | $ | 1,235 | | $ | 700 | IBM 401(k) Plus Plan and non-U.S. plans | | $ | 561 | | $ | 585 | | $ | 588 | | $ | 409 | | $ | 403 | | $ | 389 | | $ | 971 | | $ | 988 | | $ | 976 | Excess 401(k) | | | 21 | | | 27 | | | 26 | | | — | | | — | | | — | | | 21 | | | 27 | | | 26 | Total defined contribution plans cost | | $ | 582 | | $ | 612 | | $ | 613 | | $ | 409 | | $ | 403 | | $ | 389 | | $ | 992 | | $ | 1,015 | | $ | 1,002 | Nonpension postretirement benefit plans cost | | $ | 127 | | $ | 145 | | $ | 154 | | $ | 44 | | $ | 57 | | $ | 64 | | $ | 172 | | $ | 202 | | $ | 218 | Total retirement-related benefits net periodic cost | | $ | 1,029 | | $ | 934 | | $ | 624 | | $ | 1,573 | | $ | 1,517 | | $ | 1,295 | | $ | 2,601 | | $ | 2,451 | | $ | 1,920 | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Summary of the total PBO for defined benefit plans, APBO for nonpension postretirement benefit plans, fair value of plan assets and associated funded status |
| | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | | | Benefit Obligations | | Fair Value of Plan Assets | | Funded Status * | At December 31: | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | U.S. Plans | | | | | | | | | | | | | | | | | | | Overfunded plans | | | | | | | | | | | | | | | | | | | Qualified PPP | | $ | 46,458 | | $ | 50,375 | | $ | 51,852 | | $ | 54,386 | | $ | 5,395 | | $ | 4,011 | Underfunded plans | | | | | | | | | | | | | | | | | | | Excess PPP | | $ | 1,441 | | $ | 1,556 | | $ | — | | $ | — | | $ | (1,441) | | $ | (1,556) | Retention Plan | | | 283 | | | 306 | | | — | | | — | | | (283) | | | (306) | Nonpension postretirement benefit plan | | | 3,404 | | | 3,791 | | | 8 | | | 15 | | | (3,395) | | | (3,776) | Total underfunded U.S. plans | | $ | 5,128 | | $ | 5,652 | | $ | 8 | | $ | 15 | | $ | (5,119) | | $ | (5,638) | Non-U.S. Plans | | | | | | | | | | | | | | | | | | | Overfunded plans | | | | | | | | | | | | | | | | | | | Qualified defined benefit pension plans** | | $ | 21,617 | | $ | 20,504 | | $ | 26,071 | | $ | 24,051 | | $ | 4,454 | | $ | 3,546 | Nonpension postretirement benefit plans | | | — | | | 9 | | | — | | | 9 | | | — | | | 0 | Total overfunded non-U.S. plans | | $ | 21,617 | | $ | 20,513 | | $ | 26,071 | | $ | 24,060 | | $ | 4,454 | | $ | 3,546 | Underfunded plans | | | | | | | | | | | | | | | | | | | Qualified defined benefit pension plans** | | $ | 17,360 | | $ | 23,207 | | $ | 13,908 | | $ | 18,257 | | $ | (3,452) | | $ | (4,950) | Nonqualified defined benefit pension plans | | | 6,120 | | | 6,736 | | | — | | | — | | | (6,120) | | | (6,736) | Nonpension postretirement benefit plans | | | 638 | | | 747 | | | 31 | | | 31 | | | (607) | | | (716) | Total underfunded non-U.S. plans | | $ | 24,118 | | $ | 30,690 | | $ | 13,939 | | $ | 18,288 | | $ | (10,179) | | $ | (12,402) | Total overfunded plans | | $ | 68,075 | | $ | 70,888 | | $ | 77,924 | | $ | 78,445 | | $ | 9,850 | | $ | 7,557 | Total underfunded plans | | $ | 29,246 | | $ | 36,342 | | $ | 13,947 | | $ | 18,302 | | $ | (15,300) | | $ | (18,040) | | | | | | | | | | | | | | | | | | | |
* | Funded status is recognized in the Consolidated Balance Statement as follows: Asset amounts as prepaid pension assets; (Liability) amounts as compensation and benefits (current liability) and retirement and nonpension postretirement benefit obligations (noncurrent liability). |
** | Non-U.S. qualified plans represent plans funded outside of the U.S. Non-U.S. nonqualified plans are unfunded. |
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| Components of net periodic (income)/cost of the company's retirement-related benefit plans |
| | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | Defined Benefit Pension Plans | | | U.S. Plans | | Non-U.S. Plans | For the year ended December 31: | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | Service cost | | $ | — | | $ | — | | $ | — | | $ | 300 | | $ | 328 | | $ | 304 | Interest cost(1) | | | 1,109 | | | 1,501 | | | 1,882 | | | 424 | | | 541 | | | 814 | Expected return on plan assets(1) | | | (1,802) | | | (2,169) | | | (2,599) | | | (1,115) | | | (1,229) | | | (1,530) | Amortization of transition assets(1) | | | — | | | — | | | — | | | — | | | — | | | 0 | Amortization of prior service costs/(credits)(1) | | | 16 | | | 16 | | | 16 | | | (12) | | | (9) | | | (25) | Recognized actuarial losses(1) | | | 996 | | | 829 | | | 559 | | | 1,392 | | | 1,336 | | | 1,190 | Curtailments and settlements(1) | | | — | | | — | | | — | | | 94 | | | 49 | | | 38 | Multi-employer plans | | | — | | | — | | | — | | | 17 | | | 23 | | | 23 | Other costs/(credits) | | | — | | | — | | | — | | | 18 | | | 18 | | | 28 | Total net periodic (income)/cost | | $ | 319 | | $ | 178 | | $ | (142) | | $ | 1,119 | | $ | 1,057 | | $ | 842 | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | Nonpension Postretirement Benefit Plans | | | U.S. Plan | | Non-U.S. Plans | For the year ended December 31: | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | Service cost | | $ | 7 | | $ | 9 | | $ | 10 | | $ | 4 | | $ | 4 | | $ | 4 | Interest cost(1) | | | 65 | | | 103 | | | 145 | | | 27 | | | 35 | | | 54 | Expected return on plan assets(1) | | | — | | | — | | | — | | | (3) | | | (4) | | | (5) | Amortization of transition assets(1) | | | — | | | — | | | — | | | — | | | — | | | — | Amortization of prior service costs/(credits)(1) | | | 4 | | | 4 | | | (2) | | | 0 | | | 0 | | | 0 | Recognized actuarial losses(1) | | | 52 | | | 29 | | | 1 | | | 15 | | | 21 | | | 10 | Curtailments and settlements(1) | | | — | | | — | | | — | | | 0 | | | 0 | | | 0 | Other costs/(credits) | | | — | | | — | | | — | | | 0 | | | 0 | | | — | Total net periodic cost | | $ | 127 | | $ | 145 | | $ | 154 | | $ | 44 | | $ | 57 | | $ | 64 | | | | | | | | | | | | | | | | | | | |
(1) | These components of net periodic pension costs are included in other (income) and expense in the Consolidated Income Statement. |
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| Changes in benefit obligations |
| | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | Defined Benefit Pension Plans | | Nonpension Postretirement Benefit Plans | | | U.S. Plans | | Non-U.S. Plans | | U.S. Plan | | Non-U.S. Plans | | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | Change in benefit obligation | | | | | | | | | | | | | | | | | | | | | | | | | Benefit obligation at January 1 | | $ | 52,237 | | $ | 50,232 | | $ | 50,447 | | $ | 45,947 | | $ | 3,791 | | $ | 3,857 | | $ | 756 | | $ | 830 | Service cost | | | — | | | — | | | 300 | | | 328 | | | 7 | | | 9 | | | 4 | | | 4 | Interest cost | | | 1,109 | | | 1,501 | | | 424 | | | 541 | | | 65 | | | 103 | | | 27 | | | 35 | Plan participants' contributions | | | — | | | — | | | 19 | | | 18 | | | 50 | | | 56 | | | — | | | — | Acquisitions/divestitures, net | | | — | | | 1 | | | (70) | | | 63 | | | — | | | — | | | 6 | | | 0 | Actuarial losses/(gains) | | | (1,582) | | | 4,071 | | | (876) | | | 2,794 | | | (141) | | | 135 | | | (78) | | | (2) | Benefits paid from trust | | | (3,459) | | | (3,445) | | | (2,090) | | | (1,908) | | | (369) | | | (369) | | | (6) | | | (4) | Direct benefit payments | | | (125) | | | (123) | | | (516) | | | (391) | | | (1) | | | 0 | | | (28) | | | (24) | Foreign exchange impact | | | — | | | — | | | (2,548) | | | 3,085 | | | — | | | — | | | (42) | | | (83) | Amendments/curtailments/ settlements/other | | | 1 | | | 0 | | | 7 | | | (29) | | | 3 | | | — | | | (1) | | | (1) | Benefit obligation at December 31 | | $ | 48,182 | | $ | 52,237 | | $ | 45,097 | | $ | 50,447 | | $ | 3,404 | | $ | 3,791 | | $ | 638 | | $ | 756 | Change in plan assets | | | | | | | | | | | | | | | | | | | | | | | | | Fair value of plan assets at January 1 | | $ | 54,386 | | $ | 51,784 | | $ | 42,308 | | $ | 38,891 | | $ | 15 | | $ | 3 | | $ | 40 | | $ | 52 | Actual return on plan assets | | | 924 | | | 6,046 | | | 1,686 | | | 2,559 | | | — | | | 0 | | | (14) | | | 2 | Employer contributions | | | — | | | — | | | 86 | | | 166 | | | 313 | | | 325 | | | 6 | | | — | Acquisitions/divestitures, net | | | — | | | 1 | | | (87) | | | 106 | | | — | | | — | | | — | | | — | Plan participants' contributions | | | — | | | — | | | 19 | | | 18 | | | 50 | | | 56 | | | — | | | — | Benefits paid from trust | | | (3,459) | | | (3,445) | | | (2,090) | | | (1,908) | | | (369) | | | (369) | | | (6) | | | (4) | Foreign exchange impact | | | — | | | — | | | (1,939) | | | 2,479 | | | — | | | — | | | 6 | | | (10) | Amendments/curtailments/ settlements/other | | | 1 | | | — | | | (4) | | | (2) | | | 0 | | | 0 | | | 0 | | | 0 | Fair value of plan assets at December 31 | | $ | 51,852 | | $ | 54,386 | | $ | 39,979 | | $ | 42,308 | | $ | 8 | | $ | 15 | | $ | 31 | | $ | 40 | Funded status at December 31 | | $ | 3,671 | | $ | 2,149 | | $ | (5,118) | | $ | (8,140) | | $ | (3,395) | | $ | (3,776) | | $ | (607) | | $ | (716) | Accumulated benefit obligation* | | $ | 48,182 | | $ | 52,237 | | $ | 44,628 | | $ | 50,019 | | | N/A | | | N/A | | | N/A | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | |
* Represents the benefit obligation assuming no future participant compensation increases. N/A–Not applicable
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| Changes in plan assets |
| | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | Defined Benefit Pension Plans | | Nonpension Postretirement Benefit Plans | | | U.S. Plans | | Non-U.S. Plans | | U.S. Plan | | Non-U.S. Plans | | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | Change in benefit obligation | | | | | | | | | | | | | | | | | | | | | | | | | Benefit obligation at January 1 | | $ | 52,237 | | $ | 50,232 | | $ | 50,447 | | $ | 45,947 | | $ | 3,791 | | $ | 3,857 | | $ | 756 | | $ | 830 | Service cost | | | — | | | — | | | 300 | | | 328 | | | 7 | | | 9 | | | 4 | | | 4 | Interest cost | | | 1,109 | | | 1,501 | | | 424 | | | 541 | | | 65 | | | 103 | | | 27 | | | 35 | Plan participants' contributions | | | — | | | — | | | 19 | | | 18 | | | 50 | | | 56 | | | — | | | — | Acquisitions/divestitures, net | | | — | | | 1 | | | (70) | | | 63 | | | — | | | — | | | 6 | | | 0 | Actuarial losses/(gains) | | | (1,582) | | | 4,071 | | | (876) | | | 2,794 | | | (141) | | | 135 | | | (78) | | | (2) | Benefits paid from trust | | | (3,459) | | | (3,445) | | | (2,090) | | | (1,908) | | | (369) | | | (369) | | | (6) | | | (4) | Direct benefit payments | | | (125) | | | (123) | | | (516) | | | (391) | | | (1) | | | 0 | | | (28) | | | (24) | Foreign exchange impact | | | — | | | — | | | (2,548) | | | 3,085 | | | — | | | — | | | (42) | | | (83) | Amendments/curtailments/ settlements/other | | | 1 | | | 0 | | | 7 | | | (29) | | | 3 | | | — | | | (1) | | | (1) | Benefit obligation at December 31 | | $ | 48,182 | | $ | 52,237 | | $ | 45,097 | | $ | 50,447 | | $ | 3,404 | | $ | 3,791 | | $ | 638 | | $ | 756 | Change in plan assets | | | | | | | | | | | | | | | | | | | | | | | | | Fair value of plan assets at January 1 | | $ | 54,386 | | $ | 51,784 | | $ | 42,308 | | $ | 38,891 | | $ | 15 | | $ | 3 | | $ | 40 | | $ | 52 | Actual return on plan assets | | | 924 | | | 6,046 | | | 1,686 | | | 2,559 | | | — | | | 0 | | | (14) | | | 2 | Employer contributions | | | — | | | — | | | 86 | | | 166 | | | 313 | | | 325 | | | 6 | | | — | Acquisitions/divestitures, net | | | — | | | 1 | | | (87) | | | 106 | | | — | | | — | | | — | | | — | Plan participants' contributions | | | — | | | — | | | 19 | | | 18 | | | 50 | | | 56 | | | — | | | — | Benefits paid from trust | | | (3,459) | | | (3,445) | | | (2,090) | | | (1,908) | | | (369) | | | (369) | | | (6) | | | (4) | Foreign exchange impact | | | — | | | — | | | (1,939) | | | 2,479 | | | — | | | — | | | 6 | | | (10) | Amendments/curtailments/ settlements/other | | | 1 | | | — | | | (4) | | | (2) | | | 0 | | | 0 | | | 0 | | | 0 | Fair value of plan assets at December 31 | | $ | 51,852 | | $ | 54,386 | | $ | 39,979 | | $ | 42,308 | | $ | 8 | | $ | 15 | | $ | 31 | | $ | 40 | Funded status at December 31 | | $ | 3,671 | | $ | 2,149 | | $ | (5,118) | | $ | (8,140) | | $ | (3,395) | | $ | (3,776) | | $ | (607) | | $ | (716) | Accumulated benefit obligation* | | $ | 48,182 | | $ | 52,237 | | $ | 44,628 | | $ | 50,019 | | | N/A | | | N/A | | | N/A | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | |
* Represents the benefit obligation assuming no future participant compensation increases. N/A–Not applicable
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| Accumulated benefit obligation |
| | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | Defined Benefit Pension Plans | | Nonpension Postretirement Benefit Plans | | | U.S. Plans | | Non-U.S. Plans | | U.S. Plan | | Non-U.S. Plans | | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | Change in benefit obligation | | | | | | | | | | | | | | | | | | | | | | | | | Benefit obligation at January 1 | | $ | 52,237 | | $ | 50,232 | | $ | 50,447 | | $ | 45,947 | | $ | 3,791 | | $ | 3,857 | | $ | 756 | | $ | 830 | Service cost | | | — | | | — | | | 300 | | | 328 | | | 7 | | | 9 | | | 4 | | | 4 | Interest cost | | | 1,109 | | | 1,501 | | | 424 | | | 541 | | | 65 | | | 103 | | | 27 | | | 35 | Plan participants' contributions | | | — | | | — | | | 19 | | | 18 | | | 50 | | | 56 | | | — | | | — | Acquisitions/divestitures, net | | | — | | | 1 | | | (70) | | | 63 | | | — | | | — | | | 6 | | | 0 | Actuarial losses/(gains) | | | (1,582) | | | 4,071 | | | (876) | | | 2,794 | | | (141) | | | 135 | | | (78) | | | (2) | Benefits paid from trust | | | (3,459) | | | (3,445) | | | (2,090) | | | (1,908) | | | (369) | | | (369) | | | (6) | | | (4) | Direct benefit payments | | | (125) | | | (123) | | | (516) | | | (391) | | | (1) | | | 0 | | | (28) | | | (24) | Foreign exchange impact | | | — | | | — | | | (2,548) | | | 3,085 | | | — | | | — | | | (42) | | | (83) | Amendments/curtailments/ settlements/other | | | 1 | | | 0 | | | 7 | | | (29) | | | 3 | | | — | | | (1) | | | (1) | Benefit obligation at December 31 | | $ | 48,182 | | $ | 52,237 | | $ | 45,097 | | $ | 50,447 | | $ | 3,404 | | $ | 3,791 | | $ | 638 | | $ | 756 | Change in plan assets | | | | | | | | | | | | | | | | | | | | | | | | | Fair value of plan assets at January 1 | | $ | 54,386 | | $ | 51,784 | | $ | 42,308 | | $ | 38,891 | | $ | 15 | | $ | 3 | | $ | 40 | | $ | 52 | Actual return on plan assets | | | 924 | | | 6,046 | | | 1,686 | | | 2,559 | | | — | | | 0 | | | (14) | | | 2 | Employer contributions | | | — | | | — | | | 86 | | | 166 | | | 313 | | | 325 | | | 6 | | | — | Acquisitions/divestitures, net | | | — | | | 1 | | | (87) | | | 106 | | | — | | | — | | | — | | | — | Plan participants' contributions | | | — | | | — | | | 19 | | | 18 | | | 50 | | | 56 | | | — | | | — | Benefits paid from trust | | | (3,459) | | | (3,445) | | | (2,090) | | | (1,908) | | | (369) | | | (369) | | | (6) | | | (4) | Foreign exchange impact | | | — | | | — | | | (1,939) | | | 2,479 | | | — | | | — | | | 6 | | | (10) | Amendments/curtailments/ settlements/other | | | 1 | | | — | | | (4) | | | (2) | | | 0 | | | 0 | | | 0 | | | 0 | Fair value of plan assets at December 31 | | $ | 51,852 | | $ | 54,386 | | $ | 39,979 | | $ | 42,308 | | $ | 8 | | $ | 15 | | $ | 31 | | $ | 40 | Funded status at December 31 | | $ | 3,671 | | $ | 2,149 | | $ | (5,118) | | $ | (8,140) | | $ | (3,395) | | $ | (3,776) | | $ | (607) | | $ | (716) | Accumulated benefit obligation* | | $ | 48,182 | | $ | 52,237 | | $ | 44,628 | | $ | 50,019 | | | N/A | | | N/A | | | N/A | | | N/A | | | | | | | | | | | | | | | | | | | | | | | | | |
* Represents the benefit obligation assuming no future participant compensation increases. N/A–Not applicable
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| Net funded status |
| | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | Defined Benefit Pension Plans | | Nonpension Postretirement Benefit Plans | | | U.S. Plans | | Non-U.S. Plans | | U.S. Plan | | Non-U.S. Plans | At December 31: | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | Prepaid pension assets | | $ | 5,395 | | $ | 4,011 | | $ | 4,455 | | $ | 3,546 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | Current liabilities—compensation and benefits | | | (123) | | | (122) | | | (359) | | | (342) | | | (364) | | | (346) | | | (19) | | | (46) | Noncurrent liabilities—retirement and nonpension postretirement benefit obligations | | | (1,601) | | | (1,740) | | | (9,215) | | | (11,344) | | | (3,031) | | | (3,430) | | | (588) | | | (670) | Funded status—net | | $ | 3,671 | | $ | 2,149 | | $ | (5,118) | | $ | (8,140) | | $ | (3,395) | | $ | (3,776) | | $ | (607) | | $ | (716) | | | | | | | | | | | | | | | | | | | | | | | | | |
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| Pre-tax net loss and prior service costs/(credits) and transition (assets)/liabilities recognized in OCI and changes in pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI |
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($ in millions) | | | | | | | Defined Benefit Pension Plans | | Nonpension Postretirement Benefit Plans | | | U.S. Plans | | Non-U.S. Plans | | U.S. Plan | | Non-U.S. Plans | | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | Net loss at January 1 | | $ | 15,972 | | $ | 16,608 | | $ | 16,310 | | $ | 16,361 | | $ | 656 | | $ | 551 | | $ | 263 | | $ | 284 | Current period loss/(gain) | | | (704) | | | 194 | | | (1,411) | | | 1,334 | | | (141) | | | 135 | | | (65) | | | 0 | Curtailments and settlements | | | — | | | — | | | (94) | | | (49) | | | — | | | — | | | 0 | | | 0 | Amortization of net loss included in net periodic (income)/cost | | | (996) | | | (829) | | | (1,392) | | | (1,336) | | | (52) | | | (29) | | | (15) | | | (21) | Net loss at December 31 | | $ | 14,273 | | $ | 15,972 | | $ | 13,412 | | $ | 16,310 | | $ | 464 | | $ | 656 | | $ | 183 | | $ | 263 | Prior service costs/(credits) at January 1 | | $ | 24 | | $ | 41 | | $ | 325 | | $ | 280 | | $ | 30 | | $ | 34 | | $ | (4) | | $ | (4) | Current period prior service costs/(credits) | | | — | | | — | | | 60 | | | 36 | | | — | | | — | | | 0 | | | — | Curtailments, settlements and other | | | — | | | — | | | — | | | 0 | | | — | | | — | | | — | | | — | Amortization of prior service (costs)/credits included in net periodic (income)/cost | | | (16) | | | (16) | | | 12 | | | 9 | | | (4) | | | (4) | | | 0 | | | 0 | Prior service costs/(credits) at December 31 | | $ | 8 | | $ | 24 | | $ | 397 | | $ | 325 | | $ | 26 | | $ | 30 | | $ | (4) | | $ | (4) | Transition (assets)/liabilities at January 1 | | $ | — | | $ | — | | $ | 0 | | $ | 0 | | $ | — | | $ | — | | $ | 0 | | $ | 0 | Amortization of transition assets/(liabilities) included in net periodic (income)/cost | | | — | | | — | | | — | | | 0 | | | — | | | — | | | 0 | | | 0 | Transition (assets)/liabilities at December 31 | | $ | — | | $ | — | | $ | 0 | | $ | 0 | | $ | — | | $ | — | | $ | 0 | | $ | 0 | Total loss recognized in accumulated other comprehensive income/(loss)* | | $ | 14,281 | | $ | 15,997 | | $ | 13,809 | | $ | 16,635 | | $ | 490 | | $ | 687 | | $ | 179 | | $ | 259 | | | | | | | | | | | | | | | | | | | | | | | | | |
* Refer to note T, “Equity Activity,” for the total change in AOCI, and the Consolidated Statement of Comprehensive Income for the components of net periodic (income)/cost, including the related tax effects, recognized in OCI for the retirement-related benefit plans.
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| Assumptions used to measure the net periodic (income)/cost and year-end benefit obligations |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Defined Benefit Pension Plans | | | | U.S. Plans | | Non-U.S. Plans | | | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | Weighted-average assumptions used to measure net periodic (income)/cost for the year ended December 31 | | | | | | | | | | | | | | Discount rate | | 2.20 | % | 3.10 | % | 4.10 | % | 0.87 | % | 1.20 | % | 1.86 | % | Expected long-term returns on plan assets | | 3.75 | % | 4.50 | % | 5.25 | % | 2.85 | % | 3.36 | % | 4.38 | % | Rate of compensation increase | | N/A | | N/A | | N/A | | 2.59 | % | 2.32 | % | 2.20 | % | Interest crediting rate | | 1.10 | % | 2.70 | % | 3.60 | % | 0.26 | % | 0.28 | % | 0.30 | % | Weighted-average assumptions used to measure benefit obligations at December 31 | | | | | | | | | | | | | | Discount rate | | 2.60 | % | 2.20 | % | 3.10 | % | 1.26 | % | 0.87 | % | 1.20 | % | Rate of compensation increase | | N/A | | N/A | | N/A | | 3.02 | % | 2.59 | % | 2.32 | % | Interest crediting rate | | 1.10 | % | 1.10 | % | 2.70 | % | 0.26 | % | 0.26 | % | 0.28 | % | | | | | | | | | | | | | | |
N/A–Not applicable | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nonpension Postretirement Benefit Plans | | | | U.S. Plan | | Non-U.S. Plans | | | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | Weighted-average assumptions used to measure net periodic cost for the year ended December 31 | | | | | | | | | | | | | | Discount rate | | 1.80 | % | 2.80 | % | 3.90 | % | 4.55 | % | 5.08 | % | 4.88 | % | Expected long-term returns on plan assets | | N/A | | N/A | | N/A | | 6.62 | % | 7.73 | % | 7.70 | % | Interest crediting rate | | 1.10 | % | 2.70 | % | 3.60 | % | N/A | | N/A | | N/A | | Weighted-average assumptions used to measure benefit obligations at December 31 | | | | | | | | | | | | | | Discount rate | | 2.30 | % | 1.80 | % | 2.80 | % | 5.35 | % | 4.55 | % | 5.08 | % | Interest crediting rate | | 1.10 | % | 1.10 | % | 2.70 | % | N/A | | N/A | | N/A | | | | | | | | | | | | | | | |
N/A–Not applicable
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| Defined benefit pension plans' asset classes and their associated fair value |
| | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | U.S. Plan | | Non-U.S. Plans | | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | Equity | | | | | | | | | | | | | | | | | | | | | | | | | Equity securities(1) | | $ | 2,023 | | $ | 0 | | $ | — | | $ | 2,023 | | $ | 485 | | $ | — | | $ | — | | $ | 485 | Equity mutual funds(2) | | | 133 | | | — | | | — | | | 133 | | | 0 | | | — | | | — | | | 0 | Fixed income | | | | | | | | | | | | | | | | | | | | | | | | | Government and related(3) | | | — | | | 21,751 | | | — | | | 21,751 | | | — | | | 9,900 | | | — | | | 9,900 | Corporate bonds(4) | | | — | | | 16,246 | | | 598 | | | 16,844 | | | — | | | 3,842 | | | — | | | 3,842 | Mortgage and asset-backed securities | | | — | | | 660 | | | — | | | 660 | | | — | | | 3 | | | — | | | 3 | Fixed income mutual funds(5) | | | 281 | | | — | | | — | | | 281 | | | — | | | — | | | — | | | — | Insurance contracts(6) | | | — | | | — | | | — | | | — | | | — | | | 5,662 | | | — | | | 5,662 | Cash and short-term investments(7) | | | 104 | | | 1,269 | | | — | | | 1,373 | | | 324 | | | 403 | | | — | | | 728 | Real estate | | | — | | | — | | | — | | | — | | | — | | | — | | | 174 | | | 174 | Derivatives(8) | | | 3 | | | 3 | | | — | | | 5 | | | 61 | | | 489 | | | — | | | 550 | Other mutual funds(9) | | | — | | | — | | | — | | | — | | | 30 | | | — | | | — | | | 30 | Subtotal | | | 2,543 | | | 39,930 | | | 598 | | | 43,070 | | | 900 | | | 20,300 | | | 174 | | | 21,374 | Investments measured at net asset value using the NAV practical expedient(10) | | | — | | | — | | | — | | | 9,078 | | | — | | | — | | | — | | | 18,652 | Other(11) | | | — | | | — | | | — | | | (296) | | | — | | | — | | | — | | | (47) | Fair value of plan assets | | $ | 2,543 | | $ | 39,930 | | $ | 598 | | $ | 51,852 | | $ | 900 | | $ | 20,300 | | $ | 174 | | $ | 39,979 | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $2 million. Non-U.S. Plans include IBM common stock of $2 million. |
(2) | Invests in predominantly equity securities. |
(3) | Includes debt issued by national, state and local governments and agencies. |
(4) | The U.S. Plans include IBM corporate bonds of $19 million. Non-U.S. Plans include IBM corporate bonds of $4 million. |
(5) | Invests predominantly in fixed-income securities. |
(6) | Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans. |
(7) | Includes cash, cash equivalents and short-term marketable securities. |
(8) | Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives. |
(9) | Invests in both equity and fixed-income securities. |
(10)Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships. (11)Represents net unsettled transactions, relating primarily to purchases and sales of plan assets. | | | | | | | | | | | | | | | | | | | | | | | | | | ($ in millions) | | | | | | | | U.S. Plan | | Non-U.S. Plans | | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | Equity | | | | | | | | | | | | | | | | | | | | | | | | | | Equity securities(1) | | $ | 2,714 | | $ | 0 | | $ | — | | $ | 2,714 | | | $ | 466 | | $ | 0 | | $ | — | | $ | 466 | Equity mutual funds(2) | | | 105 | | | — | | | — | | | 105 | | | | 0 | | | — | | | — | | | 0 | Fixed income | | | | | | | | | | | | | | | | | | | | | | | | | | Government and related(3) | | | — | | | 21,375 | | | — | | | 21,375 | | | | — | | | 9,599 | | | 2 | | | 9,601 | Corporate bonds(4) | | | — | | | 18,217 | | | 542 | | | 18,759 | | | | — | | | 3,690 | | | — | | | 3,690 | Mortgage and asset-backed securities | | | — | | | 612 | | | — | | | 612 | | | | — | | | 3 | | | — | | | 3 | Fixed income mutual funds(5) | | | 470 | | | — | | | — | | | 470 | | | | — | | | — | | | — | | | — | Insurance contracts(6) | | | — | | | — | | | — | | | — | | | | — | | | 6,378 | | | — | | | 6,378 | Cash and short-term investments(7) | | | 76 | | | 1,001 | | | — | | | 1,077 | | | | 337 | | | 651 | | | — | | | 988 | Real estate | | | — | | | — | | | — | | | — | | | | — | | | — | | | 298 | | | 298 | Derivatives(8) | | | (3) | | | 18 | | | — | | | 15 | | | | 66 | | | 510 | | | — | | | 575 | Other mutual funds(9) | | | — | | | — | | | — | | | — | | | | 21 | | | — | | | — | | | 21 | Subtotal | | | 3,363 | | | 41,222 | | | 542 | | | 45,128 | | | | 891 | | | 20,832 | | | 300 | | | 22,023 | Investments measured at net asset value using the NAV practical expedient(10) | | | — | | | — | | | — | | | 9,579 | | | | — | | | — | | | — | | | 20,321 | Other(11) | | | — | | | — | | | — | | | (321) | | | | — | | | — | | | — | | | (37) | Fair value of plan assets | | $ | 3,363 | | $ | 41,222 | | $ | 542 | | $ | 54,386 | | | $ | 891 | | $ | 20,832 | | $ | 300 | | $ | 42,308 | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $6 million. Non-U.S. Plans include IBM common stock of $1 million. |
(2) | Invests in predominantly equity securities. |
(3) | Includes debt issued by national, state and local governments and agencies. |
(4) | Non-U.S. Plans include IBM corporate bonds of $5 million. |
(5) | Invests in predominantly fixed-income securities. |
(6) | Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans. |
(7) | Includes cash, cash equivalents and short-term marketable securities. |
(8) | Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives. |
(9) | Invests in both equity and fixed-income securities. |
(10)Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled funds, hedge funds, private equity and real estate partnerships. (11)Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.
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| Reconciliation of the beginning and ending balances of Level 3 assets |
| | | | | ($ in millions) | | | | | | | Total | * | Balance at January 1, 2021 | | $ | 542 | | Return on assets held at end of year | | | (15) | | Return on assets sold during the year | | | 1 | | Purchases, sales and settlements, net | | | 63 | | Transfers, net | | | 6 | | Balance at December 31, 2021 | | $ | 598 | | | | | | |
* Corporate bonds. | | | | | ($ in millions) | | | | | | | Total | * | Balance at January 1, 2020 | | $ | 518 | | Return on assets held at end of year | | | 29 | | Return on assets sold during the year | | | 0 | | Purchases, sales and settlements, net | | | (5) | | Transfers, net | | | 0 | | Balance at December 31, 2020 | | $ | 542 | |
* Corporate bonds. The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended December 31, 2021 and 2020 for the non-U.S. Plans. | | | | | | | | | | ($ in millions) | | | | | | | | | | Government | | Private | | | | | | and Related | | Real Estate | | Total | Balance at January 1, 2021 | | $ | 2 | | $ | 298 | | $ | 300 | Return on assets held at end of year | | | 0 | | | (43) | | | (43) | Return on assets sold during the year | | | 0 | | | 58 | | | 58 | Purchases, sales and settlements, net | | | (2) | | | (138) | | | (140) | Transfers, net | | | — | | | — | | | — | Foreign exchange impact | | | 0 | | | (1) | | | (1) | Balance at December 31, 2021 | | $ | — | | $ | 174 | | $ | 174 | | | | | | | | | | |
| | | | | | | | | | ($ in millions) | | | | | | | | | | Government | | Private | | | | | | and Related | | Real Estate | | Total | Balance at January 1, 2020 | | $ | 2 | | $ | 328 | | $ | 330 | Return on assets held at end of year | | | 0 | | | (29) | | | (29) | Return on assets sold during the year | | | — | | | 2 | | | 2 | Purchases, sales and settlements, net | | | — | | | (14) | | | (14) | Transfers, net | | | — | | | 4 | | | 4 | Foreign exchange impact | | | 0 | | | 7 | | | 7 | Balance at December 31, 2020 | | $ | 2 | | $ | 298 | | $ | 300 | | | | | | | | | | |
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| Schedule of contributions and direct benefit payments |
| | | | | | | ($ in millions) | | | | | | | For the years ended December 31: | | 2021 | | 2020 | Non-U.S. DB plans | | $ | 86 | | $ | 166 | Nonpension postretirement benefit plans | | | 319 | | | 325 | Multi-employer plans | | | 17 | | | 23 | DC plans | | | 992 | | | 1,015 | Direct benefit payments | | | 671 | | | 538 | Total | | $ | 2,085 | | $ | 2,066 | | | | | | | |
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| Total expected benefit payments |
| | | | | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | | | | | Qualified | | Nonqualified | | Qualified | | Nonqualified | | Total Expected | | | U.S. Plan | | U.S. Plans | | Non-U.S. Plans | | Non-U.S. Plans | | Benefit | | | Payments | | Payments | | Payments | | Payments | | Payments | 2022 | | $ | 3,488 | | $ | 124 | | $ | 1,968 | | $ | 342 | | $ | 5,922 | 2023 | | | 3,450 | | | 123 | | | 1,949 | | | 320 | | | 5,842 | 2024 | | | 3,419 | | | 121 | | | 1,959 | | | 328 | | | 5,827 | 2025 | | | 3,348 | | | 119 | | | 1,976 | | | 331 | | | 5,774 | 2026 | | | 3,244 | | | 116 | | | 1,972 | | | 337 | | | 5,670 | 2027-2031 | | | 14,524 | | | 532 | | | 9,438 | | | 1,624 | | | 26,117 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | ($ in millions) | | | | | | | | | | | | | | | | | Qualified | | Nonqualified | | Total Expected | | | U.S. Plan | | Non-U.S. Plans | | Non-U.S. Plans | | Benefit | | | Payments | | Payments | | Payments | | Payments | 2022 | | $ | 377 | | $ | 16 | | $ | 25 | | $ | 418 | 2023 | | | 380 | | | 17 | | | 25 | | | 422 | 2024 | | | 363 | | | 18 | | | 24 | | | 405 | 2025 | | | 339 | | | 19 | | | 24 | | | 382 | 2026 | | | 316 | | | 20 | | | 24 | | | 360 | 2027-2031 | | | 1,156 | | | 115 | | | 115 | | | 1,386 | | | | | | | | | | | | | |
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| Defined benefit pension plans with accumulated benefit obligations (ABO) in excess of plan assets |
| | | | | | | | | | | | | ($ in millions) | | | | | | | 2021 | | 2020 | | | Benefit | | Plan | | Benefit | | Plan | At December 31: | | Obligation | | Assets | | Obligation | | Assets | Plans with PBO in excess of plan assets | | $ | 25,204 | | $ | 13,908 | | $ | 31,805 | | $ | 18,257 | Plans with ABO in excess of plan assets | | | 24,853 | | | 13,908 | | | 31,465 | | | 18,257 | Plans with plan assets in excess of PBO | | | 68,075 | | | 77,924 | | | 70,879 | | | 78,436 | | | | | | | | | | | | | |
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| Schedule of nonpension postretirement benefit plan with APBO in excess of plan assets |
| | | | | | | | | | | | | ($ in millions) | | | | | | | 2021 | | 2020 | | | Benefit | | Plan | | Benefit | | Plan | At December 31: | | Obligation | | Assets | | Obligation | | Assets | Plans with APBO in excess of plan assets | | $ | 4,042 | | $ | 40 | | $ | 4,537 | | $ | 45 | Plans with plan assets in excess of APBO | | | — | | | — | | | 9 | | | 9 | | | | | | | | | | | | | |
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