v3.24.0.1
Post-Employment Benefits
 12 Months Ended
Dec. 31, 2023
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, 2023 and 2022.
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)2023202220232022
Projected benefit obligations
Beginning of period$8,588 $12,006 $667 $850 
Service cost270 454 37 51 
Interest cost432 297 37 23 
Employee contributions— 1 — — 
Amendments— — — (2)
Actuarial (gain) loss491 (3,668)89 (229)
Benefits paid(316)(294)(35)(25)
Other, primarily foreign currency translation adjustments79 (208)1 (1)
End of period9,544 8,588 796 667 
Fair value of plan assets
Beginning of period8,472 10,655 — — 
Actual return on plan assets1,230 (2,031)— — 
Company contributions366 357 35 25 
Employee contributions— 1 — — 
Benefits paid(316)(294)(35)(25)
Other, primarily foreign currency translation adjustments87 (216)— — 
End of period9,839 8,472 — — 
Funded status, end of period$295 $(116)$(796)$(667)
Amounts recognized on the consolidated balance sheets
Other assets$1,086 $896 $— $— 
Accounts payable and accrued liabilities(17)(14)(32)(27)
Other long-term liabilities(774)(998)(764)(640)
Net obligation$295 $(116)$(796)$(667)
Actuarial loss, net$2,290 $2,365 $282 $205 
Prior service cost (credit)1 3 (297)(333)
Accumulated other comprehensive loss (income)$2,291 $2,368 $(15)$(128)
Related to international defined benefit plans the projected benefit obligations in the table above included $2.4 billion at December 31, 2023 and $2.1 billion at December 31, 2022.
For plans reflected in the table above, the accumulated benefit obligations were $8.6 billion at December 31, 2023 and $7.7 billion at December 31, 2022.
The 2023 actuarial loss of $491 million for qualified pension plans and actuarial loss of $89 million for other post-employment plans were primarily driven by a decrease in the discount rate and changes to experience impact and medical trends assumptions. 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.
Information For Pension Plans With An Accumulated Benefit Obligation In Excess Of Plan Assets
as of December 31 (in millions)20232022
Accumulated benefit obligation$1,410 $1,211 
Fair value of plan assets890 746 
Information For Pension Plans With A Projected Benefit Obligation In Excess Of Plan Assets
as of December 31 (in millions)20232022
Projected benefit obligation$6,343 $5,592 
Fair value of plan assets5,552 4,580 
AbbVie's U.S. pension plan was modified to close the plan to new entrants effective January 1, 2022. In addition, a change to AbbVie's U.S. retiree health benefit plan was approved in 2020 and communicated to employees and retirees in October 2020. Beginning in 2022, Medicare-eligible retirees and Medicare-eligible dependents choose health care coverage from insurance providers through a private Medicare exchange. AbbVie will continue to provide financial support to Medicare-eligible retirees.
Amounts Recognized in Other Comprehensive Income (Loss)
The following table summarizes the pre-tax losses (gains) included in other comprehensive income (loss):
years ended December 31 (in millions)202320222021
Defined benefit plans
Actuarial gain$(16)$(925)$(345)
Amortization of prior service cost(1)(2)(2)
Amortization of actuarial loss(16)(231)(288)
Foreign exchange loss (gain) and other(44)17 (27)
Total gain$(77)$(1,141)$(662)
Other post-employment plans
Actuarial loss (gain)$89 $(229)$10 
Prior service credit— (2)— 
Amortization of prior service credit36 38 39 
Amortization of actuarial loss(12)(26)(32)
Total loss (gain)$113 $(219)$17 
Net Periodic Benefit Cost
years ended December 31 (in millions)202320222021
Defined benefit plans
Service cost$270 $454 $440 
Interest cost432 297 237 
Expected return on plan assets(723)(712)(663)
Amortization of prior service cost1 2 2 
Amortization of actuarial loss16 231 288 
Net periodic benefit cost (credit)$(4)$272 $304 
Other post-employment plans
Service cost$37 $51 $48 
Interest cost37 23 19 
Amortization of prior service credit(36)(38)(39)
Amortization of actuarial loss12 26 32 
Net periodic benefit cost$50 $62 $60 
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 3120232022
Defined benefit plans
Discount rate4.8 %5.0 %
Rate of compensation increases4.8 %5.5 %
Cash balance interest crediting rate4.4 %2.7 %
Other post-employment plans
Discount rate5.1 %5.3 %
The assumptions used in calculating the December 31, 2023 measurement date benefit obligations will be used in the calculation of net periodic benefit cost in 2024.
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost
years ended December 31202320222021
Defined benefit plans
Discount rate for determining service cost5.0 %3.0 %2.6 %
Discount rate for determining interest cost4.9 %2.6 %2.2 %
Expected long-term rate of return on plan assets7.3 %7.1 %7.1 %
Expected rate of change in compensation4.8 %5.2 %4.6 %
Cash balance interest crediting rate2.7 %2.7 %2.8 %
Other post-employment plans
Discount rate for determining service cost5.3 %3.3 %3.0 %
Discount rate for determining interest cost5.1 %2.7 %2.2 %
For the December 31, 2023 post-retirement health care obligations remeasurement, the company assumed a 7.4% 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) in 2032 and remain at that level thereafter. For purposes of measuring the 2023 post-retirement health care costs, 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) for 2030 and remain at that level thereafter.
Defined Benefit Pension Plan Assets
Basis of fair value measurement
as of December 31 (in millions)2023Quoted 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)
$1,018 $1,018 $— $— 
U.S. mid cap(b)
173 173 — — 
International(c)
488 488 — — 
Fixed income securities
U.S. government securities(d)
246 62 184 — 
Corporate debt instruments(d)
714 155 559 — 
Non-U.S. government securities(d)
461 301 160 — 
Other(d)
126 124 2 — 
Absolute return funds(e)
155 66 89 — 
Other(f)
414 413 1 — 
Total$3,795 $2,800 $995 $— 
Total assets measured at NAV6,044 
Fair value of plan assets$9,839 
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 
(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 2023 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
2024$339 $33 
2025364 37 
2026387 41 
2027413 44 
2028434 47 
2029 to 20332,580 292 
Defined Contribution Plan
AbbVie maintains defined contribution savings plans for the benefit of its eligible employees. The expense recognized for these plans was $398 million in 2023, $474 million in 2022 and $267 million in 2021. 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.