v3.22.4
Post-Employment Benefits
 12 Months Ended
Dec. 31, 2022
Postemployment Benefits [Abstract]  
Post-Employment Benefits Post-Employment Benefits
AbbVie sponsors various pension and other post-employment benefit plans, including defined benefit, defined contribution and termination indemnity plans, which cover most employees worldwide. In addition, AbbVie provides medical benefits, primarily to eligible retirees in the United States and Puerto Rico, through other post-retirement benefit plans. Net obligations for these plans have been reflected on the consolidated balance sheets as of December 31, 2022 and 2021.
The following table summarizes benefit plan information for the global AbbVie-sponsored defined benefit and other post-employment plans:
Defined benefit plansOther post-employment plans
as of and for the years ended December 31 (in millions)2022202120222021
Projected benefit obligations
Beginning of period$12,006 $11,792 $850 $795 
Service cost454 440 51 48 
Interest cost297 237 23 19 
Employee contributions1 2 — — 
Amendments— — (2)— 
Actuarial (gain) loss(3,668)(8)(229)10 
Benefits paid(294)(281)(25)(22)
Other, primarily foreign currency translation adjustments(208)(176)(1)— 
End of period8,588 12,006 667 850 
Fair value of plan assets
Beginning of period10,655 9,702 — — 
Actual return on plan assets(2,031)1,000 — — 
Company contributions357 376 25 22 
Employee contributions1 2 — — 
Benefits paid(294)(281)(25)(22)
Other, primarily foreign currency translation adjustments(216)(144)— — 
End of period8,472 10,655 — — 
Funded status, end of period$(116)$(1,351)$(667)$(850)
Amounts recognized on the consolidated balance sheets
Other assets$896 $991 $— $— 
Accounts payable and accrued liabilities(14)(13)(27)(26)
Other long-term liabilities(998)(2,329)(640)(824)
Net obligation$(116)$(1,351)$(667)$(850)
Actuarial loss, net$2,365 $3,504 $205 $461 
Prior service cost (credit)3 5 (333)(370)
Accumulated other comprehensive loss$2,368 $3,509 $(128)$91 
Related to international defined benefit plans the projected benefit obligations in the table above included $2.1 billion at December 31, 2022 and $3.2 billion at December 31, 2021.
For plans reflected in the table above, the accumulated benefit obligations were $7.7 billion at December 31, 2022 and $10.5 billion at December 31, 2021.
The 2022 actuarial gain of $3.7 billion for qualified pension plans and actuarial gain of $229 million for other post-employment plans were primarily driven by an increase in the discount rate. The 2021 actuarial gain of $8 million for qualified pension plans and actuarial loss of $10 million for other post-employment plans were primarily driven by an increase in the assumed discount rate offset by change in demographic assumptions from 2020.
Information For Pension Plans With An Accumulated Benefit Obligation In Excess Of Plan Assets
as of December 31 (in millions)20222021
Accumulated benefit obligation$1,211 $6,395 
Fair value of plan assets746 5,412 
Information For Pension Plans With A Projected Benefit Obligation In Excess Of Plan Assets
as of December 31 (in millions)20222021
Projected benefit obligation$5,592 $7,788 
Fair value of plan assets4,580 5,447 
AbbVie's U.S. pension plan was modified to close the plan to new entrants effective January 1, 2022. In addition, a change to AbbVie's U.S. retiree health benefit plan was approved in 2020 and communicated to employees and retirees in October 2020. Beginning in 2022, Medicare-eligible retirees and Medicare-eligible dependents choose health care coverage from insurance providers through a private Medicare exchange. AbbVie will continue to provide financial support to Medicare-eligible retirees. This change to the U.S. retiree health benefit plan decreased AbbVie's post-employment benefit obligation and increased AbbVie's unrecognized prior service credit as of December 31, 2020 by $397 million.
Amounts Recognized in Other Comprehensive Income
The following table summarizes the pre-tax losses (gains) included in other comprehensive income:
years ended December 31 (in millions)202220212020
Defined benefit plans
Actuarial loss (gain)$(925)$(345)$701 
Amortization of prior service cost(2)(2)(2)
Amortization of actuarial loss(231)(288)(227)
Foreign exchange loss (gain) and other17 (27)56 
Total loss (gain)$(1,141)$(662)$528 
Other post-employment plans
Actuarial loss (gain)$(229)$10 $40 
Prior service credit(2)— (397)
Amortization of prior service credit38 39 4 
Amortization of actuarial loss(26)(32)(26)
Total loss (gain)$(219)$17 $(379)
Net Periodic Benefit Cost
years ended December 31 (in millions)202220212020
Defined benefit plans
Service cost$454 $440 $370 
Interest cost297 237 264 
Expected return on plan assets(712)(663)(575)
Amortization of prior service cost2 2 2 
Amortization of actuarial loss231 288 227 
Net periodic benefit cost$272 $304 $288 
Other post-employment plans
Service cost$51 $48 $42 
Interest cost23 19 34 
Amortization of prior service credit(38)(39)(4)
Amortization of actuarial loss26 32 26 
Net periodic benefit cost$62 $60 $98 
The components of net periodic benefit cost other than service cost are included in other expense, net in the consolidated statements of earnings.
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date
as of December 3120222021
Defined benefit plans
Discount rate5.0 %2.8 %
Rate of compensation increases5.5 %5.2 %
Cash balance interest crediting rate2.7 %2.7 %
Other post-employment plans
Discount rate5.3 %3.1 %
The assumptions used in calculating the December 31, 2022 measurement date benefit obligations will be used in the calculation of net periodic benefit cost in 2023.
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost
years ended December 31202220212020
Defined benefit plans
Discount rate for determining service cost3.0 %2.6 %3.1 %
Discount rate for determining interest cost2.6 %2.2 %3.0 %
Expected long-term rate of return on plan assets7.1 %7.1 %7.1 %
Expected rate of change in compensation5.2 %4.6 %4.6 %
Cash balance interest crediting rate2.7 %2.8 %2.8 %
Other post-employment plans
Discount rate for determining service cost3.3 %3.0 %3.7 %
Discount rate for determining interest cost2.7 %2.2 %3.2 %
For the December 31, 2022 post-retirement health care obligations remeasurement, the company assumed a 6.2% pre-65 (2.0% post-65) annual rate of increase in the per capita cost of covered health care benefits. The pre-65 rate was assumed to decrease gradually to 4.5% (1.8% post-65) in 2030 and remain at that level thereafter. For purposes of measuring the 2022 post-retirement health care costs, the company assumed a 5.9% pre-65 (2.1% post-65) annual rate of increase in the per capita cost of covered health care benefits. The pre-65 rate was assumed to decrease gradually to 4.5% (1.8% post-65) for 2029 and remain at that level thereafter.
Defined Benefit Pension Plan Assets
Basis of fair value measurement
as of December 31 (in millions)2022Quoted prices in active markets for identical assets
 (Level 1)		Significant other observable inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Equities
U.S. large cap(a)
$949 $949 $— $— 
U.S. mid cap(b)
157 157 — — 
International(c)
327 327 — — 
Fixed income securities
U.S. government securities(d)
237 69 168 — 
Corporate debt instruments(d)
680 144 536 — 
Non-U.S. government securities(d)
548 402 146 — 
Other(d)
84 81 3 — 
Absolute return funds(e)
91 4 87 — 
Real assets9 9 — — 
Other(f)
278 277 1 — 
Total$3,360 $2,419 $941 $— 
Total assets measured at NAV5,112 
Fair value of plan assets$8,472 
Basis of fair value measurement
as of December 31 (in millions)2021Quoted prices in active markets for identical assets
 (Level 1)		Significant other observable inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Equities
U.S. large cap(a)
$1,428 $1,428 $— $— 
U.S. mid cap(b)
198 198 — — 
International(c)
458 458 — — 
Fixed income securities
U.S. government securities(d)
228 95 133 — 
Corporate debt instruments(d)
945 179 766 — 
Non-U.S. government securities(d)
602 445 157 — 
Other(d)
273 268 5 — 
Absolute return funds(e)
100 5 95 — 
Real assets10 10 — — 
Other(f)
261 216 45 — 
Total$4,503 $3,302 $1,201 $— 
Total assets measured at NAV6,152 
Fair value of plan assets$10,655 
(a)A mix of index funds and actively managed equity accounts that are benchmarked to various large cap indices.
(b)A mix of index funds and actively managed equity accounts that are benchmarked to various mid cap indices.
(c)A mix of index funds and actively managed equity accounts that are benchmarked to various non-U.S. equity indices in both developed and emerging markets.
(d)Securities held by actively managed accounts, index funds and mutual funds.
(e)Primarily funds having global mandates with the flexibility to allocate capital broadly across a wide range of asset classes and strategies, including but not limited to equities, fixed income, commodities, financial futures, currencies and other securities, with objectives to outperform agreed upon benchmarks of specific return and volatility targets.
(f)Investments in cash and cash equivalents.
Equities and registered investment companies having quoted prices are valued at the published market prices. Fixed income securities that are valued using significant other observable inputs are quoted at prices obtained from independent financial service industry-recognized vendors. Investments held in pooled investment funds, common collective trusts or limited partnerships are valued at the net asset value (NAV) practical expedient to estimate fair value. The NAV is provided by the fund administrator and is based on the value of the underlying assets owned by the fund minus its liabilities.
The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return, balancing higher return, more volatile equity securities and lower return, less volatile fixed income securities. Investment allocations are established for each plan and are generally made across a range of markets, industry sectors, capitalization sizes and in the case of fixed income securities, maturities and credit quality. The 2022 target investment allocation for the AbbVie Pension Plan was 62.5% in equity securities, 22.5% in fixed income securities and 15% in asset allocation strategies and other holdings. There are no known significant concentrations of risk in the plan assets of the AbbVie Pension Plan or of any other plans.
The expected return on plan assets assumption for each plan is based on management's expectations of long-term average rates of return to be achieved by the underlying investment portfolio. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, as well as current economic and capital market conditions.
Expected Benefit Payments
The following table summarizes total benefit payments expected to be paid to plan participants including payments funded from both plan and company assets:
years ending December 31 (in millions)Defined
 benefit plans		Other
 post-employment plans
2023$310 $28 
2024333 31 
2025355 34 
2026378 37 
2027404 39 
2028 to 20322,427 244 
Defined Contribution Plan
AbbVie maintains defined contribution savings plans for the benefit of its eligible employees. The expense recognized for these plans was $474 million in 2022, $267 million in 2021 and $191 million in 2020. AbbVie provides certain other post-employment benefits, primarily salary continuation arrangements, to qualifying employees and accrues for the related cost over the service lives of the employees.