v3.25.0.1
Benefit Plans:
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Benefit Plans:
Benefit Plans:
Pension coverage for employees of PMI’s subsidiaries is provided, to the extent deemed appropriate, through separate plans, many of which are governed by local statutory requirements. In addition, PMI provides health care and other benefits to certain U.S. retired employees and certain non-U.S. retired employees. In general, health care benefits for non-U.S. retired employees are covered through local government plans.

Pension and other employee benefit costs per the consolidated statements of earnings consisted of the following for December 31, 2024, 2023 and 2022:

(in millions)202420232022
Net pension costs (income)$(76)$(84)$(93)
Net postemployment costs123 117 107 
Net postretirement costs13 12 10 
Total pension and other employee benefit costs$60 $45 $24 
Pension and Postretirement Benefit Plans

Obligations and Funded Status

The projected benefit obligations, plan assets and funded status of PMI’s pension plans, and the accumulated benefit obligation, plan assets and net amount accrued for PMI's postretirement health care plans, at December 31, 2024 and 2023, were as follows:
Pension(1)
Postretirement
(in millions)
2024202320242023
Benefit obligation at January 1$10,567 $8,606 $246 $229 
Service cost
218 174 3 4 
Interest cost
234 258 13 12 
Benefits paid
(434)(520)(14)(13)
 Employee contributions157 145 — — 
 Settlement, curtailment and plan amendment
(12)(17)(1)— 
Actuarial losses (gains)
460 1,209 2 24 
Currency
(708)763 5 (4)
Other
(26)(51)(6)(6)
Benefit obligation at December 31,
10,456 10,567 248 246 
Fair value of plan assets at January 1,
8,851 7,939 3 3 
Actual return on plan assets
973 643 — — 
Employer contributions, net of refunds
110 21 14 13 
Employee contributions
157 145 — — 
Benefits paid
(434)(520)(14)(13)
 Settlement
(10)(17)(1)— 
Currency
(600)639 1 — 
Other(17)1 — — 
Fair value of plan assets at December 31,
9,030 8,851 3 3 
Net pension and postretirement liability recognized at December 31,
$(1,426)$(1,716)$(245)$(243)
(1) Primarily non-U.S. based defined benefit retirement plans.


At December 31, 2024, actuarial losses (gains) consisted primarily of losses for assumption changes related to lower discount rates year-over-year for the Swiss plan. At December 31, 2023, actuarial losses (gains) consisted primarily of losses for assumption changes related to lower discount rates year-over-year for the Swiss, German and Dutch plans.

At December 31, 2024 and 2023, the Swiss pension plan represented 69% and 67% of the benefit obligation, respectively, and approximately 63% and 62% of the fair value of plan assets at December 31, 2024 and 2023, respectively. At December 31, 2024 and 2023, the U.S. pension plans represented 6% and 6% of the benefit obligation, respectively, and approximately 6% and 6% of the fair value of plan assets at December 31, 2024 and 2023, respectively.

At December 31, 2024 and 2023, the amounts recognized on PMI's consolidated balance sheets for the pension and postretirement plans were as follows:
PensionPostretirement
(in millions)
2024202320242023
Other assets
$490 $294 
Accrued liabilities — employment costs
(33)(31)$(14)$(12)
Long-term employment costs
(1,883)(1,979)(231)(231)
$(1,426)$(1,716)$(245)$(243)
The accumulated benefit obligation, which represents benefits earned to date, for the pension plans was $9.9 billion and $10.0 billion at December 31, 2024 and 2023, respectively.

For pension plans with accumulated benefit obligations in excess of plan assets, the accumulated benefit obligation and fair value of plan assets were $7.7 billion and $6.2 billion, respectively, as of December 31, 2024. The accumulated benefit obligation and fair value of plan assets were $8.8 billion and $7.2 billion, respectively, as of December 31, 2023.

For pension plans with projected benefit obligations in excess of plan assets, the projected benefit obligation and fair value of plan assets were $8.2 billion and $6.2 billion, respectively, as of December 31, 2024. The projected benefit obligation and fair value of plan assets were $9.2 billion and $7.2 billion, respectively, as of December 31, 2023.

The following weighted-average assumptions were used to determine PMI’s pension and postretirement benefit obligations at December 31:
PensionPostretirement
2024202320242023
Discount rate
2.07 %2.28 %5.35 %5.19 %
Rate of compensation increase
1.89 2.05 
Interest crediting rate
3.05 2.99 
Health care cost trend rate assumed for next year
6.82 6.54 
Ultimate trend rate
4.71 4.49 
Year that rate reaches the ultimate trend rate
20482047

The discount rate for the largest pension plans is based on a yield curve constructed from a portfolio of high quality corporate bonds that produces a cash flow pattern equivalent to each plan’s expected benefit payments. The discount rate for the remaining plans is developed from local bond indices that match local benefit obligations as closely as possible.

Components of Net Periodic Benefit Cost

Net periodic pension and postretirement health care costs consisted of the following for the years ended December 31, 2024, 2023 and 2022:
PensionPostretirement
(in millions)
202420232022202420232022
Service cost
$218 $174 $233 $3 $4 $2 
Interest cost
234 258 78 13 12 6 
Expected return on plan assets
(403)(365)(352)— — — 
Amortization:
Net losses
93 18 181 (1)(1)2 
Prior service cost (credit)
(2)(2)(2)— — — 
Net transition obligation
— — — — — — 
Settlement and curtailment
2 7 2 1 1 2 
Net periodic pension and postretirement costs$142 $90 $140 $16 $16 $12 

Settlement and curtailment charges were due primarily to employee severance and early retirement programs.

All of the amounts in the table above, other than service cost, are recognized in pension and other employee benefit costs in the consolidated statement of earnings.
The following weighted-average assumptions were used to determine PMI’s net pension and postretirement health care costs:
PensionPostretirement
202420232022202420232022
Discount rate - service cost
2.68 %3.27 %1.03 %5.19 %5.89 %3.08 %
Discount rate - interest cost
2.34 3.03 0.71 5.19 5.89 3.08 
Expected rate of return on plan assets
4.63 4.42 4.17 
Rate of compensation increase
2.05 1.98 1.77 
Interest crediting rate
2.99 2.97 3.15 
Health care cost trend rate
6.54 6.14 6.27 

PMI’s expected rate of return on pension plan assets is determined by the plan assets’ historical long-term investment performance, current asset allocation and estimates of future long-term returns by asset class.

PMI and certain of its subsidiaries sponsor defined contribution plans. Amounts charged to expense for defined contribution plans totaled $123 million, $111 million and $82 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Plan Assets

PMI’s investment strategy for pension plans is based on an expectation that equity securities will outperform debt securities over the long term. Accordingly, the target allocation of PMI’s plan assets is broadly characterized as approximately 55% in equity securities and approximately 45% in debt securities and other assets. The strategy primarily utilizes indexed U.S. equity securities, international equity securities and investment-grade debt securities. PMI attempts to mitigate investment risk by rebalancing between equity and debt asset classes once a year or as PMI’s contributions and benefit payments are made.
The fair value of PMI’s pension plan assets at December 31, 2024 and 2023, by asset category was as follows:
Asset Category
(in millions)		At December 31, 2024
Quoted Prices
In Active
Markets for
Identical
Assets/Liabilities
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents
$83 $83 
Equity securities:
U.S. securities
144 144 
International securities
525 525 
Investment funds(a)
7,317 5,245 $2,072 
Government bonds
238 166 72 
Corporate bonds
409 409 
Other
31 — 3 28 
(c)
Total assets in the fair value hierarchy
$8,747 $6,572 $2,147 $28 
Investment funds measured at net asset value(b)
283 
Total assets
$9,030 
(a) Investment funds whose objective seeks to replicate the returns and characteristics of specified market indices (primarily MSCI — Europe, Switzerland, North America, Asia Pacific, Japan, Emerging Markets and Small Cap for equities / FTSE EMU, FTSE Non-EGBI EuroBIG, SBI AAA-BBB and JP Morgan EMBI for bonds / SXI Real Estate and KGAST for real estate) , primarily consist of mutual funds, common trust funds and commingled funds. Of these funds, 57% are invested in U.S. and international equities; 13% are invested in U.S. and international government bonds; 14% are invested in corporate bonds and 16% are invested in real estate.
(b) In accordance with FASB ASC Subtopic 820-10, certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(c) Amount relates to annuity policies of which the fair value is calculated using an actuarial model.

Asset Category
(in millions)		At December 31, 2023
Quoted Prices
In Active
Markets for
Identical
Assets/Liabilities
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents
$117 $117 
Equity securities:
U.S. securities
158 158 
International securities
569 569 
Investment funds(a)
7,123 5,366 $1,757 
Government bonds
255 183 72 
Corporate bonds
320 320 
Other
37 — 5 32 
(c)
Total assets in the fair value hierarchy
$8,579 $6,713 $1,834 $32 
Investment funds measured at net asset value(b)
272 
Total assets
$8,851 
(a) Investment funds whose objective seeks to replicate the returns and characteristics of specified market indices (primarily MSCI — Europe, Switzerland, North America, Asia Pacific, Japan, Emerging Markets for equities, and FTSE EMU, FTSE Non-EGBI EuroBIG, SBI AAA-BBB and JP Morgan EMBI for bonds), primarily consist of mutual funds, common trust funds and commingled funds. Of these funds, 57% were invested in U.S. and international equities; 15% were invested in U.S. and international government bonds; 15% were invested in corporate bonds, and 13% were invested in real estate.
(b) In accordance with FASB ASC Subtopic 820-10, certain investments measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(c) Amount relates to annuity policies of which the fair value is calculated using an actuarial model.
For a description of the fair value hierarchy and the three levels of inputs used to measure fair values, see Note 2. Summary of Significant Accounting Policies.

PMI makes, and plans to make, contributions, to the extent that they are tax deductible and meet specific funding requirements of its funded pension plans. Currently, PMI anticipates making contributions of approximately $161 million in 2025 to its pension plans, based on current tax and benefit laws. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest and currency rates.

The estimated future benefit payments from PMI pension plans at December 31, 2024, are as follows:
(in millions)
2025$444 
2026452 
2027459 
2028466 
2029479 
2030 - 20342,630 
PMI's expected future annual benefit payments for its postretirement health care plans are estimated to be not material through 2034.
Postemployment Benefit Plans

PMI and certain of its subsidiaries sponsor postemployment benefit plans covering certain designated salaried and hourly employees. The cost of these plans is charged to expense over the working life of the covered employees. Net postemployment costs were $238 million, $213 million and $184 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The amounts recognized in accrued postemployment costs net of plan assets on PMI's consolidated balance sheets at December 31, 2024 and 2023, were $929 million and $915 million, respectively.

The accrued postemployment costs were determined using a weighted-average discount rate of 4.9% and 4.3% in 2024 and 2023, respectively; an assumed ultimate annual weighted-average turnover rate of 2.9% and 2.8% in 2024 and 2023, respectively; assumed compensation cost increases of 2.3% in 2024 and 2.4% in 2023, and assumed benefits as defined in the respective plans. In accordance with local regulations, certain postemployment plans are funded. As a result, the accrued postemployment costs disclosed above are presented net of the related assets of $30 million and $33 million at December 31, 2024 and 2023, respectively. Postemployment costs arising from actions that offer employees benefits in excess of those specified in the respective plans are charged to expense when incurred.

Comprehensive Earnings (Losses)

The amounts recorded in accumulated other comprehensive losses at December 31, 2024, consisted of the following:
(in millions)
PensionPost-
retirement		Post-
employment		Total
Net (losses) gains
$(2,122)$(36)$(815)$(2,973)
Prior service (cost) credit
75 1 (21)55 
Net transition (obligation) asset
(3)— — (3)
Deferred income taxes
246 19 195 460 
Losses to be amortized
$(1,804)$(16)$(641)$(2,461)
The amounts recorded in accumulated other comprehensive losses at December 31, 2023, consisted of the following:
(in millions)
PensionPost-
retirement		Post-
employment		Total
Net (losses) gains
$(2,325)$(36)$(770)$(3,131)
Prior service (cost) credit
77 1 (21)57 
Net transition (obligation) asset
(3)— — (3)
Deferred income taxes
283 19 186 488 
Losses to be amortized
$(1,968)$(16)$(605)$(2,589)

The amounts recorded in accumulated other comprehensive losses at December 31, 2022, consisted of the following:
(in millions)
PensionPost-
retirement		Post-
employment		Total
Net (losses) gains
$(1,437)$(14)$(753)$(2,204)
Prior service (cost) credit
70 1 (21)50 
Net transition (obligation) asset
(3)— — (3)
Deferred income taxes
138 14 183 335 
Losses to be amortized
$(1,232)$1 $(591)$(1,822)

The movements in other comprehensive earnings (losses) during the year ended December 31, 2024, were as follows:
(in millions)
PensionPost-
retirement		Post-
employment		Total
Amounts transferred to earnings:
Amortization:
Net losses (gains)
$88 $1 $86 $175 
Prior service cost (credit)
(6)— — (6)
Net transition obligation (asset)
— — — — 
Other income/expense:
Net losses (gains)
1 1 — 2 
    Prior service cost (credit)
— — — — 
Deferred income taxes
(13)(2)(21)(36)
70 — 65 135 
Other movements during the year:
Net (losses) gains
114 (2)(131)(19)
Prior service (cost) credit
4 — — 4 
Deferred income taxes
(24)2 30 8 
94 — (101)(7)
Total movements in other comprehensive earnings (losses)
$164 $— $(36)$128 
The movements in other comprehensive earnings (losses) during the year ended December 31, 2023, were as follows:
(in millions)
PensionPost-
retirement		Post-
employment		Total
Amounts transferred to earnings:
Amortization:
Net losses (gains)
$19 $1 $76 $96 
Prior service cost (credit)
7 — — 7 
Net transition obligation (asset)
— — — — 
Other income/expense:
Net losses (gains)
11 1 — 12 
Prior service cost (credit)
— — — — 
Deferred income taxes
(9)(1)(18)(28)
28 1 58 87 
Other movements during the year:
Net (losses) gains
(918)(24)(93)(1,035)
Prior service (cost) credit
— — — — 
Deferred income taxes154 6 21 181 
(764)(18)(72)(854)
Total movements in other comprehensive earnings (losses)
$(736)$(17)$(14)$(767)

The movements in other comprehensive earnings (losses) during the year ended December 31, 2022, were as follows:
(in millions)
PensionPost-
retirement		Post-
employment		Total
Amounts transferred to earnings:
Amortization:
Net losses (gains)
$178 $3 $85 $266 
Prior service cost (credit)
(4)— — (4)
Other income/expense:
Net losses (gains)
2 1 — 3 
Prior service cost (credit)
— — 1 1 
Deferred income taxes(28)(1)(20)(49)
148 3 66 217 
Other movements during the year:
Net (losses) gains
878 46 46 970 
Prior service (cost) credit
3 — — 3 
Deferred income taxes(112)(9)(11)(132)
769 37 35 841 
Total movements in other comprehensive earnings (losses)
$917 $40 $101 $1,058