v3.25.4
Pension and Postretirement Benefit Plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Pension and Postretirement Benefit Plans
Note 13. Pension and Postretirement Benefit Plans
3M has company-sponsored retirement plans covering substantially all U.S. employees and many employees outside the United States. In total, 3M has over 70 defined benefit plans in 27 countries. Pension benefits associated with these plans generally are based on each participant’s years of service, compensation, and age at retirement or termination. The primary U.S. defined-benefit pension plan was closed to new participants effective January 1, 2009. In December 2023, the Company committed to the future freeze of U.S. defined benefit pension benefits for non-union U.S. employees, effective December 31, 2028. The Company also provides certain postretirement health care and life insurance benefits for its U.S. employees who reach retirement age while employed by the Company and were employed by the Company prior to January 1, 2016. Most international employees and retirees are covered by government health care programs. The cost of company-provided postretirement health care plans for international employees is not material and is combined with U.S. amounts in the tables that follow.
The Company has made deposits for its defined benefit plans with independent trustees. Trust funds and deposits with insurance companies are maintained to provide pension benefits to plan participants and their beneficiaries. There are no plan assets in the non-qualified plan due to its nature. For its U.S. postretirement health care benefit plan, the Company has set aside amounts at least equal to annual benefit payments with an independent trustee.
The Company also sponsors employee savings plans under Section 401(k) of the Internal Revenue Code. These plans are offered to substantially all U.S. employees. For eligible employees hired prior to January 1, 2009, employee 401(k) contributions of up to 5% of eligible compensation are matched in cash at rates of 45% or 60%, depending on the plan in which the employee participates. Employees hired on or after January 1, 2009, receive a cash match of 100% for employee 401(k) contributions of up to 5% of eligible compensation and receive an employer retirement income account cash contribution of 3% of the participant’s total eligible compensation. All contributions are invested in a number of investment funds pursuant to employees’ elections. 3M subsidiaries in various international countries also participate in defined contribution plans. The total employer contributions, including discontinued operations, related to these plans were as follows:
Total employer contributions (millions)202520242023
U.S. defined contribution plans$157 $172 $241 
International defined contribution plans86 87 108 
The following tables include a reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan assets as well as a summary of the related amounts recognized in the Company’s consolidated balance sheet as of December 31 of the respective years. 3M also has certain non-qualified unfunded pension and postretirement benefit plans, inclusive of plans related to supplement/excess benefits for employees impacted by particular relocations and other matters, that individually and in the aggregate are not significant and which are not included in the tables that follow. The obligations for these plans are included within other liabilities in the Company’s consolidated balance sheet and aggregated to less than $30 million as of December 31, 2025 and 2024.
In connection with the completion of the April 1, 2024 separation of Solventum (see Note 2), approximately $2.7 billion of pension and postretirement benefit obligations and $2.4 billion of plan assets for certain pension and postretirement benefit plans, were transferred to Solventum, which is treated as a discontinued operation. These are reflected in the "Acquisitions/(Divestitures)" row in the table below. In addition, as discussed later in this Note 13, in 2024 3M transferred a portion of its U.S. pension payment obligations and related plan assets to an insurance company. Those transfers are included as settlements and applicable portion in actuarial gain in the tables below.
Qualified and non-qualified pension benefitsPostretirement benefits
United StatesInternational
(Millions)202520242025202420252024
Change in benefit obligation
Benefit obligation at beginning of year$8,362 $13,498 $4,436 $5,571 $1,503 $1,897 
Acquisitions/(divestitures)— (1,850)(22)(615)— (243)
Service cost102 123 49 63 17 21 
Interest cost433 522 198 200 73 80 
Participant contributions— — 6 7 — — 
Foreign exchange rate changes— — 402 (284)3 (16)
Plan amendments— — 1 — (144)— 
Actuarial (gain) loss226 (721)(178)(198)19 (112)
Benefit payments(705)(823)(258)(249)(110)(118)
Settlements, curtailments, special termination benefits and other— (2,387)(19)(59)(5)(6)
Benefit obligation at end of year8,418 8,362 4,615 4,436 1,356 1,503 
Change in plan assets
Fair value of plan assets at beginning of year7,498 12,348 5,397 6,341 761 980 
Acquisitions/(divestitures)— (1,808)— (455)— (130)
Actual return on plan assets781 99 82 38 59 21 
Company contributions67 69 65 71 13 14 
Participant contributions— — 6 7 — — 
Foreign exchange rate changes— — 471 (299)— — 
Benefit payments(705)(823)(258)(249)(110)(118)
Settlements, curtailments, special termination benefits and other— (2,387)(23)(57)(5)(6)
Fair value of plan assets at end of year7,641 7,498 5,740 5,397 718 761 
Funded status at end of year$(777)$(864)$1,125 $961 $(638)$(742)
Qualified and non-qualified pension benefitsPostretirement benefits
United StatesInternational
(Millions)December 31, 2025December 31, 2024December 31, 2025December 31, 2024December 31, 2025December 31, 2024
Amounts recognized in the consolidated balance sheet
Non-current assets$— $— $1,406 $1,243 $— $— 
Accrued benefit cost
Current liabilities(40)(50)(14)(13)(11)(12)
Non-current liabilities(737)(814)(267)(269)(627)(730)
Net amount recognized$(777)$(864)$1,125 $961 $(638)$(742)
Amounts recognized in accumulated other comprehensive income
Net actuarial loss (gain)$2,645 $2,922 $384 $347 $278 $279 
Prior service cost (credit)— — 7 7 (222)(94)
Ending balance$2,645 $2,922 $391 $354 $56 $185 
The pension accumulated benefit obligation represents the actuarial present value of benefits based on employee service and compensation as of the measurement date and does not include an assumption about future compensation levels. The following table summarizes the total accumulated benefit obligations, the accumulated benefit obligations and fair value of plan assets for defined benefit pension plans with accumulated benefit obligations in excess of plan assets, and the projected benefit obligation and fair value of plan assets for defined benefit pension plans with projected benefit obligation in excess of plan assets as of December 31:
Qualified and non-qualified pension plans
United StatesInternational
(Millions)December 31, 2025December 31, 2024December 31, 2025December 31, 2024
Accumulated benefit obligation$8,231 $8,094 $4,486 $4,289 
Plans with accumulated benefit obligation in excess of plan assets
Accumulated benefit obligation8,231 8,094 698 655 
Fair value of plan assets7,641 7,498 433 405 
Plans with projected benefit obligation in excess of plan assets
Projected benefit obligation8,418 8,362 769 695 
Fair value of plan assets7,641 7,498 467 416 
Components of Net Periodic Cost and Other Amounts Recognized in Other Comprehensive Income:
The service cost component of defined benefit net periodic benefit cost is recorded in cost of sales, selling, general and administrative expenses, and research, development and related expenses. As discussed in Note 7, the other components of net periodic benefit cost are reflected in other expense (income), net. Components of net periodic benefit cost and other supplemental information for the years ended December 31 follow:
Qualified and non-qualified pension benefitsPostretirement benefits
United StatesInternational
(Millions)202520242023202520242023202520242023
Net periodic benefit cost (benefit)
Operating expense
Service cost$102 $123 $171 $49 $63 $76 $17 $21 $27 
Non-operating expense
Interest cost433 522 662 198 200 225 73 80 87 
Expected return on plan assets(569)(714)(974)(278)(322)(307)(57)(65)(77)
Amortization of transition asset— — — — 2 2 — — — 
Amortization of prior service benefit— (15)(24)1 1 2 (15)(22)(31)
Amortization of net actuarial loss277 307 292 8 11 7 16 20 9 
Settlements, curtailments, special termination benefits and other14 821 (5)2 1 3 1 1 — 
Total non-operating expense (benefit)155 921 (49)(69)(107)(68)18 14 (12)
Total net periodic benefit cost (benefit)$257 $1,044 $122 $(20)$(44)$8 $35 $35 $15 
Service cost - continuing operations$102 $116 $139 $49 $58 $60 $17 $20 $23 
Service cost - discontinued operations— 7 32 — 5 16 — 1 4 
Total service cost102 123 171 49 63 76 17 21 27 
Total non-operating expense (benefit) - continuing operations155 921 (32)(69)(107)(67)18 14 (10)
Total non-operating expense (benefit) - discontinued operations— — (17)— — (1)— — (2)
Total non-operating expense (benefit)155 921 (49)(69)(107)(68)18 14 (12)
Total net periodic benefit cost (benefit) - continuing operations257 1,037 107 (20)(49)(7)35 34 13 
Total net periodic benefit cost (benefit) - discontinued operations— 7 15 — 5 15 — 1 2 
Total net periodic benefit cost (benefit)$257 $1,044 $122 $(20)$(44)$8 $35 $35 $15 
Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Amortization of transition asset$— $— $— $— $(2)$(2)$— $— $— 
Prior service cost (benefit)— — — 1 — (1)(144)— — 
Amortization of prior service benefit— 15 24 (1)(1)(2)15 22 31 
Net actuarial (gain) loss14 (105)495 21 85 166 17 (69)100 
Amortization of net actuarial loss(277)(307)(292)(8)(11)(7)(16)(20)(9)
Foreign currency— — — 26 (36)3 — 2 — 
Settlements, curtailments, special termination benefits and other(14)(821)5 (2)(1)— (1)(1)— 
Total recognized in other comprehensive (income) loss$(277)$(1,218)$232 $37 $34 $157 $(129)$(66)$122 
Total recognized in net periodic benefit cost (benefit) and other comprehensive (income) loss$(20)$(174)$354 $17 $(10)$165 $(94)$(31)$137 
Major actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for the Company's significant benefit plans are presented in the following table as weighted averages:
Qualified and non-qualified pension benefitsPostretirement benefits
United StatesInternational
202520242023202520242023202520242023
Assumptions used to determine benefit obligations as of December 31:
Discount rate5.41 %5.64 %4.98 %4.82 %4.44 %3.99 %5.38 %5.68 %5.06 %
Compensation rate increase3.77 3.77 3.77 2.90 2.88 2.88 N/AN/AN/A
Assumptions used to determine net cost for years ended December 31:
Discount rate - service cost5.75 %5.35 %5.26 %3.73 %3.77 %4.06 %5.75 %5.30 %5.39 %
Discount rate - interest cost5.41 5.21 5.11 4.25 4.06 4.39 5.31 5.23 5.25 
Expected return on assets8.00 7.63 7.50 5.00 5.31 4.61 8.17 7.85 7.58 
Compensation rate increase3.77 3.77 3.37 2.88 2.89 2.86 N/AN/AN/A
The Company provides a savings account-based postretirement health care benefit to eligible retirees in the U.S. The contributions provided by the Company to the health savings accounts previously increased 3% per year for employees who retired prior to January 1, 2016 and increase 1.5% for employees who retire on or after January 1, 2016. Therefore, the Company no longer has material exposure to health care cost inflation. In 2025, 3M modified this plan. Beginning in 2026, contributions provided by 3M to the health savings accounts will no longer be increased each year by a notional rate. The modification required remeasurement of the plan in the third quarter of 2025, resulting in a decrease of approximately $110 million in the non-current liability for pension and postretirement benefits (and corresponding decrease in accumulated comprehensive loss, before deferred taxes).
The Company determines the discount rate and related assumption used to measure plan liabilities as of the applicable measurement date for the pension and postretirement benefit plans. The annual measurement date is December 31, but certain events may require a remeasurement as of a particular date. The discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. The Company sets its rate to reflect the yield of a portfolio of high quality, fixed-income debt instruments that would produce cash flows sufficient in timing and amount to settle projected future benefits. Using this methodology, the Company determined discount rates for the U.S. pension plans and postretirement benefit plans as of December 31, 2025 as displayed in the table above. The primary reasons for the actuarial (gain)/loss impacting the benefit obligations of the plans for the periods presented were changes in discount rate. A decrease in the discount rate increases the Projected Benefit Obligation (PBO) while an increase in the rate decreases the PBO. As discussed further above, during 2025 certain events required remeasurement of a U.S. postretirement health care benefit plan.
The Company measures service cost and interest cost separately using the spot yield curve approach applied to each corresponding obligation. Service costs are determined based on duration-specific spot rates applied to the service cost cash flows. The interest cost calculation is determined by applying duration-specific spot rates to the year-by-year projected benefit payments. The spot yield curve approach does not affect the measurement of the total benefit obligations as the change in service and interest costs offset in the actuarial gains and losses recorded in other comprehensive income.
For the primary U.S. qualified pension plan, the Company’s assumption for the expected return on plan assets was 8% in 2025. Projected returns are based primarily on broad, publicly traded equity and fixed-income indices and forward-looking estimates of active portfolio and investment management. As of December 31, 2025, the Company’s 2026 expected long-term rate of return on U.S. plan assets is 8%. The expected return assumption is based on the strategic asset allocation of the plan, long term capital market return expectations and expected performance from active investment management. The 2025 expected long-term rate of return is based on an initial asset allocation assumption of 18% global equities, 15% private equities, 58% fixed-income and private credit investments, and 9% absolute return investments independent of traditional performance benchmarks, along with positive returns from active investment management. Return on assets assumptions for international pension and other post-retirement benefit plans are calculated on a plan-by-plan basis using plan asset allocations and expected long-term rate of return assumptions.
The Society of Actuaries did not release an update to the Scale MP-2021 in 2024 or 2025.
In 2024, primarily in the second quarter, 3M recorded a non-cash pension settlement charge of approximately $808 million reflected in other expense (income), net as a result of transferring approximately $2.5 billion of its U.S. pension payment obligations and related plan assets to an insurance company. The pension risk transfer required remeasurement of the plan prior to the calculation of the settlement charge. The net impact of the pension risk transfer and the second quarter 2024 remeasurement was a decrease of approximately $220 million in the non-current liability for pensions (and corresponding decrease in accumulated comprehensive loss, before deferred taxes). Assumptions used for this remeasurement included discount rates determined using June 30, 2024 market conditions and calculated using the same methodology as discussed above. Using this methodology, the Company determined a discount rate of 5.43% for the U.S. pension plan as of June 30, 2024. The Company also reduced the expected return on assets assumption determined using June 30, 2024 market conditions and calculated using the same methodology as used at the annual measurement as of December 31, 2023. All other assumptions were consistent with the December 31, 2023 disclosures. This remeasurement impacted net periodic benefit cost for the remainder of 2024.
As of March 31, 2024, 3M transferred eligible U.S. Solventum employees and retirees to new U.S. defined benefit pension and postretirement plans with the same benefits of their current plans. The transfer required remeasurement of the plans prior to the calculation of this split. The net impact of the remeasurement was a decrease of approximately $70 million in the non-current liability for pension and postretirement benefits (and corresponding decrease in accumulated comprehensive loss, before deferred taxes). Assumptions used for this remeasurement included discount rates determined using March 31, 2024 market conditions and calculated using the same methodology as discussed above. All other assumptions were consistent with the December 31, 2023 disclosures. Using this methodology, the Company determined a discount rate of 5.22% for the U.S. pension plans and 5.19% for the U.S. postretirement benefit plans as of March 31, 2024, which were increases from the rates used as of December 31, 2023 in the table above. This remeasurement did not impact consolidated income for the three months ended March 31, 2024, but impacted net periodic benefit cost for the remainder of 2024. As of March 31, 2024, there were several small international pension plans remeasured for purposes of transferring Solventum employees to new pension plans, the impact of which was not material.
Company contributions to defined benefit pension and postretirement plans were as follows:
Total employer contributions (millions)20252024
U.S. and international defined benefit pension plans
$132 $140 
Postretirement defined benefit plans
13 14 
In 2026, the Company expects to contribute an amount in the range of $100 million to $150 million of cash to its U.S. and international retirement plans. The Company does not have a required minimum cash pension contribution obligation for its U.S. plans in 2026. Future contributions will depend on market conditions, interest rates and other factors.
Future Pension and Postretirement Benefit Payments: The following table provides the estimated pension and postretirement benefit payments that are payable from the plans to participants.
Qualified and non-qualified pension benefitsPostretirement benefits
(Millions)United StatesInternational
2026 benefit payments$699 $284 $126 
2027 benefit payments698 290 126 
2028 benefit payments698 301 125 
2029 benefit payments692 302 124 
2030 benefit payments683 313 124 
Next five years3,216 1,587 548 
Plan Asset Management: 3M’s investment strategy for its pension and postretirement plans is to manage the funds on a going-concern basis. The primary goal of the trust funds is to meet the obligations as required. The secondary goal is to earn the highest rate of return possible, without jeopardizing its primary goal, and without subjecting the Company to an undue amount of contribution risk. Fund returns are used to help finance present and future obligations to the extent possible within actuarially determined funding limits and tax-determined asset limits, thus reducing the potential need for additional contributions from 3M. The investment strategy has used long duration cash bonds and derivative instruments to offset a significant portion of the interest rate sensitivity of U.S. pension liabilities.
Normally, 3M does not buy or sell any of its own securities as a direct investment for its pension and other postretirement benefit funds. However, due to external investment management of the funds, the plans may indirectly buy, sell or hold 3M securities. The aggregate amount of 3M securities are not considered to be material relative to the aggregate fund percentages.
The discussion that follows references the fair value measurements of certain assets in terms of levels 1, 2 and 3. See Note 16 for descriptions of these levels. While the Company believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
U.S. Pension Plans and Postretirement Benefit Plan Assets: In order to achieve the investment objectives in the U.S. pension plans and U.S. postretirement benefit plans, the investment policies include a target strategic asset allocation. The investment policies allow some tolerance around the target in recognition that market fluctuations and illiquidity of some investments may cause the allocation to a specific asset class to vary from the target allocation, potentially for long periods of time. Acceptable ranges have been designed to allow for deviation from strategic targets and to allow for the opportunity for tactical over- and under-weights. The portfolios will normally be rebalanced when the quarter-end asset allocation deviates from acceptable ranges. The allocation is reviewed regularly by the named fiduciary of the plans. Approximately 91% of the postretirement benefit plan assets are in a 401(h) account. The 401(h) account assets are in the same trust as the primary U.S. pension plan and invested with the same investment objectives as the primary U.S. pension plan.
International Pension Plans Assets: Outside the U.S., pension plan assets are typically managed by decentralized fiduciary committees. The disclosure below of asset categories is presented in aggregate for over 25 defined benefit plans in 18 countries; however, there is significant variation in asset allocation policy from country to country. Local regulations, local funding rules, and local financial and tax considerations are part of the funding and investment allocation process in each country. The Company provides standard funding and investment guidance to all international plans with more focused guidance to the larger plans. Each plan has its own strategic asset allocation. The asset allocations are reviewed periodically and rebalanced when necessary.
The fair values of the assets held by the U.S. pension, international pension, and postretirement benefit plans by asset class are as follows:
Fair value measurements using inputs considered asInvestments measured at net asset value*Fair value at December 31,
Level 1Level 2Level 3
Asset class (millions)2025202420252024202520242025202420252024
U.S. pension plans
Equities$1,537 $1,318 $— $— $— $— $— $— $1,537 $1,318 
Fixed income and private credit
1,594 1,227 2,171 2,774 — — 249 336 4,014 4,337 
Private equity— — — — — 13 1,062 1,179 1,062 1,192 
Absolute return— — — 7 1 — 602 563 603 570 
Cash and cash equivalents
152 38 14 14 — — 335 276 501 328 
Total$3,283 $2,583 $2,185 $2,795 $1 $13 $2,248 $2,354 $7,717 $7,745 
Other items to reconcile to fair value of plan assets(76)(247)
Fair value of plan assets$7,641 $7,498 
International pension plans
Equities$223 $231 $118 $437 $1 $1 $2 $2 $344 $671 
Fixed income and private credit
515 150 3,390 3,248 5 2 1 1 3,911 3,401 
Private equity— — 24 21 2 1 782 736 808 758 
Absolute return— 5 43 44 532 503 108 112 683 664 
Cash and cash equivalents
80 99 53 58 — — — — 133 157 
Total$818 $485 $3,628 $3,808 $540 $507 $893 $851 $5,879 $5,651 
Other items to reconcile to fair value of plan assets(139)(254)
Fair value of plan assets$5,740 $5,397 
Postretirement benefit plans
Equities$131 $122 $— $— $— $— $— $— $131 $122 
Fixed income and private credit
201 129 185 305 — — 21 31 407 465 
Private equity— — — — — 1 91 110 91 111 
Absolute return— — — 4 — — 51 49 51 53 
Cash and cash equivalents
14 7 1 1 — — 29 26 44 34 
Total$346 $258 $186 $310 $— $1 $192 $216 $724 $785 
Other items to reconcile to fair value of plan assets(6)(24)
Fair value of plan assets$718 $761 
* In accordance with ASC 820-10, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units outstanding and is determined by the investment manager or custodian of the fund. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the fair value of plan assets.
Equities consist primarily of mandates in public equity securities managed to various public equity indices. Publicly traded equities are valued at the closing price reported in the active market in which the individual securities are traded.
Fixed income and private credit include U.S. government and government agencies securities, as well as certain domestic and foreign government securities from an international pension plan perspective; corporate bonds, debt securities and notes; private credit partnerships; asset backed securities; collateralized mortgage obligations; private placements; derivative investments; and obligations under repurchase arrangements. U.S. government and government agency and domestic and foreign government securities are valued at the closing price reported if traded on an active market in which the individual security is traded. Corporate bonds, debt securities and notes; asset backed securities; government securities not traded on an active market; and collateralized mortgage obligations are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Private placements are valued by the custodian using recognized pricing services and sources. Private credit partnership investments are valued at NAV as described above. Derivative instruments such as credit default swaps, interest rate swaps are valued by the custodian using closing market swap curves and market derived inputs. Futures are valued at the closing price reported in active market in which the derivative is traded. Repurchase obligations of $597 million and $51 million are net within level 2 investments in U.S. pension plans and Postretirement benefit plans, respectively, as of December 31, 2025. There were no repurchase obligations as of December 31, 2024.
Private equity funds consist of partnership interests in a variety of funds which are valued at NAV as described above. Real estate consists of property funds and REITS (Real Estate Investment Trusts). REITS are valued at NAV with published prices provided by the custodians.
Absolute return consists primarily of hedge funds, hedge fund of funds or other fund vehicles; insurance contracts and derivative instruments. Hedge funds are valued at NAV as described above. The other fund vehicles consist primarily of instruments that are valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that utilizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risk ratings. Insurance consists of insurance contracts, which are valued using cash surrender values which is the amount the plan would receive if the contract was cashed out at year end. Derivative instruments consist of various swaps and bond futures that are used to help manage risks and are valued by the custodian using closing market swap curves and market derived input.
Cash and cash equivalents primarily consist of collective short-term investment funds valued at NAV as described above, and cash.
Other items to reconcile to fair value of plan assets include, interest receivables, amounts due for securities sold, amounts payable for securities purchased, and interest payable. As of December 31, 2024 the net payable for international pension plans included a payable of $88 million to the Canadian Solventum pension.
The level 3 activity attributable to U.S. pension, international pension and postretirement plan assets was insignificant for the periods ended December 31, 2025 and 2024.