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Pension Plans and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Pension Plans and Other Postretirement Benefits Pension Plans and Other Postretirement Benefits
Defined Contribution Plans

As of December 31, 2024, the Company sponsors several active 401(k) savings plans that cover all employees who meet plan eligibility requirements.

The Company makes matching contributions consistent with the provisions of the respective plans. At the participant’s option, account balances, including the Company’s matching contribution, can be invested among various investment options under each plan. The CVS Health Future Fund 401(k) Plan offers CVS Health Corporation’s common stock fund as an investment option. The Company also maintains nonqualified, unfunded deferred compensation plans for certain key employees. The plans provide participants the opportunity to defer portions of their eligible compensation and for certain nonqualified plans, participants receive matching contributions equivalent to what they could have received under the CVS Health Future Fund 401(k) Plan absent certain restrictions and limitations under the Internal Revenue Code. The Company’s contributions under its defined contribution plans were $610 million, $581 million and $567 million in the years ended December 31, 2024, 2023 and 2022, respectively.

Defined Benefit Pension Plans

The Company sponsors a tax-qualified defined benefit pension plan that was frozen in 2010 and a nonqualified supplemental pension plan that was frozen in 2007. The Company also sponsors several other defined benefit pension plans that are unfunded nonqualified supplemental retirement plans.
Pension Benefit Obligation and Plan Assets
The following tables outline the change in pension benefit obligation and plan assets over the specified periods:
In millions20242023
Change in benefit obligation:
Benefit obligation, beginning of year$4,736 $4,740 
Interest cost222 231 
Actuarial loss (gain)(262)145 
Benefit payments(347)(380)
Benefit obligation, end of year4,349 4,736 
Change in plan assets:
Fair value of plan assets, beginning of year5,379 5,346 
Actual return on plan assets133 389 
Employer contributions23 24 
Benefit payments(347)(380)
Fair value of plan assets, end of year5,188 5,379 
Funded status$839 $643 

The change in the pension benefit obligation during the years ended December 31, 2024 and 2023 was primarily driven by the change in the discount rate during each respective period.

The assets (liabilities) recognized on the consolidated balance sheets at December 31, 2024 and 2023 for the defined benefit pension plans consisted of the following:
In millions20242023
Noncurrent assets reflected in other assets$1,030 $856 
Current liabilities reflected in accrued expenses and other current liabilities
(22)(24)
Noncurrent liabilities reflected in other long-term liabilities(169)(189)
Net assets$839 $643 

Net Periodic Benefit Cost (Income)
The components of net periodic benefit cost (income) for the years ended December 31, 2024, 2023 and 2022 are shown below:
In millions202420232022
Components of net periodic benefit cost (income):
Interest cost$222 $231 $132 
Expected return on plan assets(327)(326)(309)
Amortization of net actuarial loss1 1 3 
Settlement losses— — 1 
Net periodic benefit cost (income)$(104)$(94)$(173)

Pension Plan Assumptions
The Company uses a series of actuarial assumptions to determine its benefit obligation and net periodic benefit income, the most significant of which include discount rates and expected return on plan assets assumptions.

Discount Rates - The discount rate is determined using a yield curve as of the annual measurement date. The yield curve consists of a series of individual discount rates, with each discount rate corresponding to a single point in time, based on high-quality bonds. Projected benefit payments are discounted to the measurement date using the corresponding rate from the yield curve that is consistent with the maturity profile of the expected liability cash flows.
Expected Return on Plan Assets - The expected long-term rate of return on plan assets is determined by using the plan’s target allocation and return expectations based on many factors including forecasted long-term capital market real returns and the inflationary outlook on a plan by plan basis. See “Pension Plan Assets” below for additional details regarding the pension plan assets as of December 31, 2024 and 2023.

The Company also considers other assumptions including mortality, interest crediting rate, termination and retirement rates, and cost of living adjustments.

The Company determined its benefit obligation based on the following weighted average assumptions as of December 31, 2024 and 2023:
20242023
Discount rate5.6 %5.0 %

The Company determined its net periodic benefit cost (income) based on the following weighted average assumptions for the years ended December 31, 2024, 2023 and 2022:
202420232022
Discount rate4.9 %5.1 %2.3 %
Expected long-term rate of return on plan assets6.3 %6.3 %4.8 %

Pension Plan Assets
The Company’s pension plan assets primarily include debt and equity securities held in separate accounts, common/collective trusts, as well as Private Real Estate, Farmland, Public Real Estate and Public Infrastructure (collectively referred to as “Real Assets”) and private credit. The valuation methodologies used to value these debt and equity securities and common/collective trusts are similar to the methodologies described in Note 5 “Fair Value.” Pension plan assets also include investments in other assets that are carried at fair value. The following is a description of the valuation methodologies used to value private real estate investments and these additional investments, including the general classification pursuant to the fair value hierarchy.

Private real estate - Private real estate investments are valued by independent third-party appraisers. The appraisals comply with the Uniform Standards of Professional Appraisal Practice, which include, among other things, the income, cost, and sales comparison approaches to estimating property value. Therefore, these investments are classified in Level 3.

Private equity, private credit and hedge fund limited partnerships - Private equity and hedge fund limited partnerships are carried at fair value which is estimated using the NAV per unit as reported by the administrator of the underlying investment fund as a practical expedient to fair value. Therefore, these investments have been excluded from the fair value table below.
Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2024 were as follows:
In millionsLevel 1Level 2Level 3Total
Cash and cash equivalents$32 $67 $— $99 
Debt securities:
    U.S. government securities481 6 — 487 
    States, municipalities and political subdivisions— 70 — 70 
    U.S. corporate securities— 2,752 1 2,753 
    Foreign securities— 98 — 98 
    Residential mortgage-backed securities— 7 — 7 
    Commercial mortgage-backed securities— 9 — 9 
    Other asset-backed securities— 4 — 4 
    Redeemable preferred securities— 1 — 1 
Total debt securities481 2,947 1 3,429 
Equity securities:
    U.S. domestic30 — — 30 
    International12 — — 12 
Total equity securities42 — — 42 
Other investments:
    Private real estate
— — 276 276 
    Common/collective trusts (1)
— 502 — 502 
    Derivatives— 3 — 3 
Total other investments— 505 276 781 
Total pension investments (2)
$555 $3,519 $277 $4,351 
_____________________________________________
(1)The assets in the underlying funds of common/collective trusts consist of $288 million of equity securities and $214 million of debt securities.
(2)Excludes $267 million of other receivables as well as $290 million of private equity limited partnership investments and $280 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.
Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2023 were as follows:
In millionsLevel 1Level 2Level 3Total
Cash and cash equivalents$12 $69 $— $81 
Debt securities:
    U.S. government securities518 4 — 522 
    States, municipalities and political subdivisions— 94 — 94 
    U.S. corporate securities— 2,649 — 2,649 
    Foreign securities— 106 — 106 
    Residential mortgage-backed securities— 17 — 17 
    Commercial mortgage-backed securities— 9 — 9 
    Other asset-backed securities— 8 — 8 
    Redeemable preferred securities— 1 — 1 
Total debt securities518 2,888 — 3,406 
Equity securities:
    U.S. domestic150 — — 150 
    International34 — — 34 
Total equity securities184 — — 184 
Other investments:
    Private real estate
— — 290 290 
    Common/collective trusts (1)
— 405 — 405 
    Derivatives— (14)— (14)
Total other investments— 391 290 681 
Total pension investments (2)
$714 $3,348 $290 $4,352 
_____________________________________________
(1)The assets in the underlying funds of common/collective trusts consist of $114 million of equity securities and $291 million of debt securities.
(2)Excludes $314 million of other receivables as well as $461 million of private equity limited partnership investments and $252 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

The changes in the balances of Level 3 pension plan assets during the year ended December 31, 2024 were as follows:
In millions
Private
real estate
U.S. corporate
securities		Total
Beginning balance$290 $— $290 
Actual return on plan assets1 — 1 
Purchases, sales and settlements(15)1 (14)
Transfers out of Level 3— — — 
Ending balance$276 $1 $277 

The changes in the balances of Level 3 pension plan assets during the year ended December 31, 2023 were as follows:

In millions
Private
real estate
Beginning balance$325 
Actual return on plan assets(23)
Purchases, sales and settlements(12)
Transfers out of Level 3— 
Ending balance$290 
The Company’s pension plan invests in a diversified mix of assets designed to generate returns that will enable the plan to meet its future benefit obligations. The risk of unexpected investment and actuarial outcomes is regularly evaluated. This evaluation is performed through forecasting and assessing ranges of investment outcomes over short- and long-term horizons and by assessing the pension plan’s liability characteristics. Complementary investment styles and strategies are utilized by professional investment management firms to further improve portfolio and operational risk characteristics. Public and private equity investments are used primarily to increase overall plan returns. Real Assets investments are viewed favorably for their diversification benefits and above-average dividend generation. Fixed income investments provide diversification benefits and liability hedging attributes that are desirable, especially in falling interest rate environments.

At December 31, 2024, target investment allocations for the Company’s pension plan were: 7% in equity securities, 75% in fixed income and debt securities, 7% in Real Assets, 5% in private equity limited partnerships, 2% in private credit limited partnerships and 4% in hedge funds. Actual asset allocations may differ from target allocations due to tactical decisions to overweight or underweight certain assets or as a result of normal fluctuations in asset values. Asset allocations are consistent with stated investment policies and, as a general rule, periodically rebalanced back to target asset allocations. Asset allocations and investment performance are formally reviewed periodically throughout the year by the pension plan’s Investment Subcommittee. Forecasting of asset and liability growth is performed at least annually.

Cash Flows
The Company generally contributes to its tax-qualified pension plan based on minimum funding requirements determined under applicable federal laws and regulations. Employer contributions related to the nonqualified supplemental pension plans generally represent payments to retirees for current benefits. The Company contributed $23 million, $24 million and $27 million to its pension plans during 2024, 2023 and 2022, respectively. No contributions were required for the tax-qualified pension plan in 2024. The Company expects to make an immaterial amount of contributions for all other pension plans in 2025.

The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the pension benefit obligation as of December 31, 2024:
In millions
2025$389 
2026384 
2027380 
2028380 
2029371 
2030-2034
1,712 

Multiemployer Pension Plans
The Company also contributes to a number of multiemployer pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer pension plans in the following respects: (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers, and (iii) if the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the applicable plan, which is referred to as a withdrawal liability.

None of the multiemployer pension plans in which the Company participates are individually significant to the Company. The Company’s contributions to multiemployer pension plans were $19 million, $19 million and $20 million in 2024, 2023 and 2022, respectively.

Other Postretirement Benefits

The Company provides postretirement health care and life insurance benefits to certain retirees who meet eligibility requirements. The Company’s funding policy is generally to pay covered expenses as they are incurred. For retiree medical plan accounting, the Company reviews external data and its own historical trends for health care costs to determine the health care cost trend rates. As of December 31, 2024 and 2023, the Company’s other postretirement benefits had an accumulated postretirement benefit obligation of $147 million and $155 million, respectively. Net periodic benefit costs related to these other postretirement benefits were $6 million, $6 million and $4 million in 2024, 2023 and 2022, respectively.
The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the accumulated other postretirement benefit obligation as of December 31, 2024:
In millions
2025$12 
202612 
202712 
202812 
202912 
2030-2034
59 
Pursuant to various collective bargaining agreements, the Company also contributes to multiemployer health and welfare plans that cover certain union-represented employees. The plans provide postretirement health care and life insurance benefits to certain employees who meet eligibility requirements. The Company’s contributions to multiemployer health and welfare plans totaled $63 million, $60 million and $62 million in 2024, 2023 and 2022, respectively.