v3.25.4
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Pension Plans
Net Periodic Benefit Expense (Income)
 Pension Plans
$ in millions202520242023
Service cost, benefits earned during the period$23 $20 $20 
Interest cost on projected benefit obligation145 137 140 
Expected return on plan assets(92)(99)(99)
Net amortization of prior service cost1 1 1 
Amortization of net (gains) losses
21 21 (9)
Plan settlements
1 — 2 
Net periodic benefit expense$99 $80 $55 

Certain current and former U.S. employees of the Firm and its U.S. affiliates who were hired before July 1, 2007 are covered by the U.S. pension plan, a non-contributory defined benefit pension plan that is qualified under Section 401(a) of the
Internal Revenue Code (“U.S. Qualified Plan”). The U.S. Qualified Plan has ceased future benefit accruals.
The Firm also operates the Morgan Stanley Supplemental Executive Retirement and Excess Plan (“SEREP”). This is a non-contributory defined benefit plan that is not qualified under Section 401(a) of the Internal Revenue Code and has ceased accrual of future benefits.
Certain of the Firm’s non-U.S. subsidiaries also have defined benefit pension plans covering their eligible current and former employees.
The Firm’s pension plans generally provide pension benefits that are based on each employee’s years of credited service and on compensation levels specified in the plans.
Rollforward of Pre-tax AOCI
 Pension Plans
$ in millions202520242023
Beginning balance$(812)$(821)$(716)
Net gain (loss)10 (12)(100)
Amortization of prior service cost1 1 1 
Amortization of net (gains) losses 
21 21 (9)
Plan settlements, curtailments and amendments
1 (1)3 
Changes recognized in OCI33 9 (105)
Ending balance$(779)$(812)$(821)
The Firm generally amortizes into net periodic benefit expense (income) the unrecognized net gains and losses exceeding 10% of the greater of the projected benefit obligation or the market-related value of plan assets. The U.S. pension plans amortize the unrecognized net gains and losses over the average life expectancy of participants. The remaining plans generally amortize the unrecognized net gains and losses and prior service cost over the average remaining service period of active participants.
Weighted Average Assumptions Used to Determine Net Periodic Benefit Expense (Income)
 Pension Plans
202520242023
Discount rate5.39 %4.75 %4.93 %
Expected long-term rate of return on plan assets
4.27 %4.18 %3.54 %
The accounting for pension plans involves certain assumptions and estimates. The expected long-term rate of return for the U.S. Qualified Plan was estimated by computing a weighted average of the underlying long-term expected returns based on the investment managers’ target allocations.
Benefit Obligation and Funded Status
Rollforward of the Projected Benefit Obligation and Fair Value of Plan Assets
 Pension Plans
$ in millions20252024
Projected benefit obligation
Benefit obligation at beginning of year$2,764 $2,975 
Service cost23 20 
Interest cost145 137 
Actuarial (gain) loss1
23 (201)
Plan amendments— 1 
Plan settlements(8)(1)
Benefits paid(152)(149)
Other2
25 (18)
Projected benefit obligation at end of year$2,820 $2,764 
Fair value of plan assets
Fair value of plan assets at beginning of year$2,186 $2,422 
Actual return on plan assets125 (114)
Employer contributions183 38 
Benefits paid(152)(149)
Plan settlements(8)(1)
Other2
27 (10)
Fair value of plan assets at end of year$2,361 $2,186 
Funded (unfunded) status$(459)$(578)
Amounts recognized in the balance sheet
Assets$102 $71 
Liabilities(561)(649)
Net amount recognized$(459)$(578)
1.Primarily reflects the impact of year-over-year discount rate fluctuations.
2.Primarily includes the impact of foreign currency exchange rate changes.
Accumulated Benefit Obligation
$ in millionsAt
December 31,
2025 		At
December 31,
2024
Pension plans$2,789 $2,740 
Pension Plans with Projected Benefit Obligations in Excess of the Fair Value of Plan Assets
$ in millionsAt
December 31,
2025 		At
December 31,
2024
Projected benefit obligation$2,605 $2,616 
Accumulated benefit obligation2,576 2,594 
Fair value of plan assets2,044 1,967 
The pension plans included in the table above may differ based on their funding status as of December 31 of each year.
Weighted Average Assumptions Used to Determine Projected Benefit Obligation
 Pension Plans
At
December 31,
2025 		At
December 31,
2024
Discount rate5.32 %5.39 %
The discount rates used to determine the benefit obligation were selected by the Firm, in consultation with its independent actuary. The U.S. pension plans use a pension discount yield curve based on the characteristics of the plans, each determined independently. The pension discount yield
curve represents spot discount yields based on duration implicit in a representative broad-based Aa-rated corporate bond universe of high-quality fixed income investments. For all non-U.S. pension plans, the assumed discount rates are based on the nature of liabilities, local economic environments and available bond indices.
Plan Assets
Fair Value of Plan Assets
At December 31, 2025
$ in millionsLevel 1Level 2Level 3Total
Assets
Cash and cash equivalents$7 $— $— $7 
U.S. government and agency securities1,846 152 — 1,998 
Other investments— — 80 80 
Other receivables1
— 3 — 3 
Total$1,853 $155 $80 $2,088 
Assets Measured at NAV
Commingled trust funds:
Money market30 
Foreign funds:
Fixed income29 
Liquidity16 
Targeted cash flow203 
Total$278 
Liabilities
Other payables1
— (5)— (5)
Total liabilities$— $(5)$— $(5)
Fair value of plan assets$2,361 
At December 31, 2024
$ in millionsLevel 1Level 2Level 3Total
Assets
Cash and cash equivalents$7 $— $— $7 
U.S. government and agency securities1,638 213 — 1,851 
Derivative contracts— 1 — 1 
Other investments— — 70 70 
Other receivables1
— 10 — 10 
Total$1,645 $224 $70 $1,939 
Assets Measured at NAV
Commingled trust funds:
Money market27 
Foreign funds:
Fixed income25 
Liquidity13 
Targeted cash flow184 
Total$249 
Liabilities
Other payables1
— (2)— (2)
Total liabilities$— $(2)$— $(2)
Fair value of plan assets$2,186 
1.Other receivables and other payables are valued at their carrying value, which approximates fair value.
Rollforward of Level 3 Plan Assets
$ in millions20252024
Balance at beginning of period$70 $71 
Realized and unrealized gains2 2 
Purchases, sales, settlements and exchange rate changes, net
8 (3)
Balance at end of period$80 $70 
There were no transfers between levels during 2025 and 2024.
The U.S. Qualified Plan assets represented 86% of the Firm’s total pension plan assets at both December 31, 2025 and December 31, 2024. The U.S. Qualified Plan uses a combination of active and risk-controlled fixed income investment strategies. The fixed income asset allocation consists primarily of fixed income securities and related derivative instruments designed to approximate the expected cash flows of the plan’s liabilities to help reduce plan exposure to interest rate variation and to better align assets with the obligation. The longer-duration fixed income allocation is expected to help protect the plan’s funded status and maintain the stability of plan contributions over the long run. The investment portfolio performance is assessed by comparing actual investment performance with changes in the estimated present value of the U.S. Qualified Plan’s benefit obligation.
Derivative instruments are permitted in the U.S. Qualified Plan’s investment portfolio only to the extent that they comply with all of the plan’s investment policy guidelines and are consistent with the plan’s risk and return objectives.
As a fundamental operating principle, any restrictions on the underlying assets apply to the respective derivative product. This includes percentage allocations and credit quality. Derivatives are used solely for the purpose of enhancing investment returns in the underlying assets and not to circumvent portfolio restrictions.
Plan assets are measured at fair value using valuation techniques that are consistent with the valuation techniques applied to the Firm’s major categories of assets and liabilities as described in Notes 2 and 4. OTC derivative contracts consist of investments in interest rate swaps and total return swaps. Other investments consist of insurance contracts held by non-U.S.-based plans. The insurance contracts are valued based on the premium reserve of the insurer for a guarantee that the insurer has given to the employee benefit plan that approximates fair value. The insurance contracts are categorized in Level 3 of the fair value hierarchy.
Commingled trust funds are privately offered funds regulated, supervised and subject to periodic examination by a U.S. federal or state agency and available to institutional clients. The trust must be maintained for the collective investment or reinvestment of assets contributed to it from U.S. tax-qualified employee benefit plans maintained by more than one employer or controlled group of corporations. The sponsor of the commingled trust funds values the funds based on the fair
value of the underlying securities. Commingled trust funds are redeemable at NAV at the measurement date or in the near future.
Some non-U.S.-based plans hold foreign funds that consist of investments in fixed income funds and liquidity funds. Fixed income funds and targeted cash flow funds are designed to provide a series of fixed annual cash flows achieved by primarily investing in government bonds. Liquidity funds place a high priority on capital preservation, stable value and a high liquidity of assets. Foreign funds are readily redeemable at NAV.
The Firm generally considers the NAV of commingled trust funds and foreign funds provided by the fund manager to be the best estimate of fair value.
Expected Contributions
The Firm’s policy is to fund at least the amount sufficient to meet minimum funding requirements under applicable employee benefit and tax laws. At December 31, 2025, the Firm expected to contribute approximately $88 million to its pension plans in 2026 based upon the plans’ current funded status and expected asset return assumptions for 2026.
Expected Future Benefit Payments
 At December 31, 2025
$ in millionsPension Plans
2026$167 
2027174 
2028180 
2029185 
2030189 
2031-2035
992 
401(k) Plan
$ in millions202520242023
Expense$414 $400 $397 
U.S. employees meeting certain eligibility requirements may participate in the Firm’s 401(k) plan.
Eligible employees receive discretionary 401(k) matching cash contributions as determined annually by the Firm. The Firm generally matched eligible employee contributions up to the IRS limit at 4%, or 5% up to a certain compensation level, in 2025 and 2024. Eligible employees with eligible pay less than or equal to $100,001 also received a fixed contribution equal to 2% of eligible pay. Contributions are invested among available funds according to each participant’s investment direction and are included in the Firm’s 401(k) expense.
Non-U.S. Defined Contribution Pension Plans
$ in millions202520242023
Expense$193 $181 $173 
The Firm maintains separate defined contribution pension plans that cover eligible employees of certain non-U.S.
subsidiaries. Under such plans, contributions are generally determined based on a fixed rate of base salary with certain vesting requirements.