v3.25.4
Employee Benefit Plans and Postretirement Benefits
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Employee Benefit Plans and Postretirement Benefits Employee Benefit Plans and Postretirement Benefits
During the years ended December 31, 2025, 2024 and 2023, CNH recorded expenses of $133 million, $138 million and $145 million, respectively, for its defined contribution plans.
Obligations and Funded Status
The following summarizes data from CNH's defined benefit pension, healthcare and other postemployment plans for the years ended December 31, 2025 and 2024 (in millions of dollars):
Pension
Healthcare(1)
Other(1)
Years Ended December 31,Years Ended December 31,Years Ended December 31,
202520242025202420252024
Change in benefit obligations:
Beginning benefit obligation$1,169 $1,274 $186 $179 $81 $100 
Service cost8 10 2 2 4 5 
Interest cost54 52 9 8 3 3 
Plan participants' contributions— 1 2 3 — — 
Actuarial loss (gain)(16)(95)(7)8 (4)(7)
Gross benefits paid(90)(85)(21)(21)(7)(13)
Plan amendments— 16 3 1 (6)(2)
Currency translation adjustments and other
87 (4)1 6 10 (5)
Ending benefit obligation1,212 1,169 175 186 81 81 
Change in the fair value of plan assets:
Beginning plan assets1,018 1,049 60 58 — — 
Actual return on plan assets50 8 5 4 — — 
Employer contributions31 32 — — — — 
Plan participants' contributions1 1 — — — — 
Gross benefits paid(78)(74)(2)(2)— — 
Currency translation adjustments and other
71 2 (15)— — — 
Ending plan assets1,093 1,018 48 60 — — 
Funded status:$(119)$(151)$(127)$(126)$(81)$(81)
(1)The healthcare and other postemployment plans are not required to be prefunded.
The following summarizes data from CNH's defined benefit pension plans by significant geographical area for the years ended December 31, 2025 and 2024 (in millions of dollars):
U.S.U.K.
Germany(1)
Other Countries(1)
Years Ended December 31,Years Ended December 31,Years Ended December 31,Years Ended December 31,
20252024202520242025202420252024
Change in benefit obligations:
Beginning benefit obligation$141 $139 $756 $825 $98 $117 $174 $193 
Service cost1 1 — — — — 7 9 
Interest cost7 7 39 36 3 3 5 6 
Plan participants' contributions— — — — — — — 1 
Actuarial loss (gain)5 — (9)(87)(4)(5)(8)(3)
Gross benefits paid(6)(6)(58)(51)(11)(11)(15)(17)
Plan amendments— — — 16 — — — — 
Currency translation adjustments and other
— — 55 17 12 (6)20 (15)
Ending benefit obligation148 141 783 756 98 98 183 174 
Change in the fair value of plan assets:
Beginning plan assets162 161 683 707 4 4 169 177 
Actual return on plan assets6 6 34 (13)— — 10 14 
Employer contributions— — 25 25 — — 6 7 
Plan participants' contributions— — — — — — 1 1 
Gross benefits paid(6)(5)(58)(52)— — (14)(17)
Currency translation adjustments and other
— — 52 16 — — 19 (13)
Ending plan assets162 162 736 683 4 4 191 169 
Funded status:$14 $21 $(47)$(73)$(94)$(94)$8 $(5)
(1)Pension benefits in Germany and some other countries are not required to be prefunded.
Net amounts recognized in the Consolidated Balance Sheets as of December 31, 2025 and 2024 consist of (in millions of dollars):
PensionHealthcareOther
As of December 31,As of December 31,As of December 31,
202520242025202420252024
Other assets$39 $34 $— $— $— $— 
Pension, postretirement and other postemployment benefits(158)(185)(127)(126)(81)(81)
Net liability recognized at end of year$(119)$(151)$(127)$(126)$(81)$(81)
 
Pre-tax amounts recognized in accumulated other comprehensive loss as of December 31, 2025, consist of (in millions of dollars):
As of December 31, 2025
PensionHealthcareOther
Unrecognized actuarial losses (gains)
$313 $3 $(20)
Unrecognized prior service credit18 1 — 
Accumulated other comprehensive (income) loss
$331 $4 $(20)
The following table summarizes the aggregate pension accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets (in millions of dollars):
Pension
As of December 31,
20252024
Accumulated benefit obligation$640 $904 
Fair value of plan assets$485 $724 
The following table summarizes CNH's pension and other postemployment plans with projected benefit obligations in excess of plan assets (in millions of dollars):
PensionHealthcareOther
As of December 31,As of December 31,As of December 31,
202520242025202420252024
Projected benefit obligation$645 $908 $175 $187 $81 $81 
Fair value of plan assets$485 $724 $48 $60 $— $— 
The total accumulated benefit obligation for pension was $1,197 million and $1,152 million as of December 31, 2025 and 2024, respectively.
Net Periodic Benefit Cost
The following summarizes the components of net periodic benefit cost (income) of CNH's defined benefit for the years ended December 31, 2025, 2024 and 2023 (in millions of dollars):
PensionHealthcareOther
Years Ended December 31,Years Ended December 31,Years Ended December 31,
202520242023202520242023202520242023
Service cost$8 $10 $9 $2 $2 $3 $4 $5 $5 
Interest cost54 52 54 9 8 9 3 3 4 
Expected return on assets(49)(54)(45)(3)(3)(4)— — — 
Amortization of:
Prior service cost (credit)1 — — (20)(24)(36)(8)— — 
Actuarial loss (gain)20 22 18 1 — — (1)(3)2 
Settlement loss and other— — 2 — 7 — (6)1 (1)
Net periodic benefit cost (income)
$34 $30 $38 $(11)$(10)$(28)$(8)$6 $10 
Net periodic benefit cost (income) recognized in net income and other changes in plan assets and benefit obligations that are recognized in other comprehensive loss during the year ended December 31, 2025 consist of (in millions of dollars):
Year Ended December 31, 2025
PensionHealthcareOther
Net periodic benefit cost (income)
$34 $(11)$(8)
Benefit adjustments included in other comprehensive (income) loss:
Net actuarial loss (gain)
(16)(6)(10)
Amortization of actuarial (loss) gain
(20)(1)1 
Amortization of prior service (cost) credit
(1)20 8 
Curtailment of prior service credit
— — 6 
Currency translation adjustments and other22 (1)(2)
Total recognized in other comprehensive (income) loss
(15)12 3 
Total recognized in comprehensive (income) loss
$19 $1 $(5)
Assumptions
The following assumptions were utilized in determining the funded status at December 31, 2025 and 2024, and the net periodic benefit cost of CNH's defined benefit plans for the years ended December 31, 2025, 2024 and 2023 (in percentages):
Pension plansHealthcare plansOther
Years Ended December 31,Years Ended December 31,Years Ended December 31,
202520242023202520242023202520242023
Weighted-average rate assumptions used to determine funded status
Discount rate4.934.894.224.965.364.973.803.673.50
Rate of compensation increase2.802.802.91n/a4.004.002.713.002.94
Initial healthcare cost trend raten/an/an/a5.465.354.70n/an/an/a
Ultimate healthcare cost trend rate(1)
n/an/an/a4.034.083.74n/an/an/a
Weighted-average rate assumptions used to determine expense
Discount rates—service cost2.772.803.515.595.115.373.873.734.32
Discount rates—interest cost4.664.224.655.074.915.173.613.514.08
Rate of compensation increase2.802.913.034.004.004.003.002.943.19
Long-term rates of return on plan assets4.785.224.545.256.255.75n/an/an/a
Initial healthcare cost trend raten/an/an/a5.354.705.12n/an/an/a
Ultimate healthcare cost trend rate(1)
n/an/an/a4.083.744.00n/an/an/a
 
(1)CNH expects to achieve the ultimate healthcare cost trend rate in 2037 for U.S. plans. A flat trend rate assumption is utilized for the Canada plans.
Assumed discount rates are used in measurements of pension, healthcare and other postemployment benefit obligations and interest cost components of net periodic cost. CNH selects its assumed discount rates based on the consideration of equivalent yields on high-quality fixed income investments at the measurement date. The assumed discount rate is used to discount future benefit obligations back to today's dollars. The discount rates for the U.S., European, U.K. and Canadian obligations are based on a benefit cash flow-matching approach and represent the rates at which the benefit obligations could effectively be settled as of the measurement date, December 31. The benefit cash flow-matching approach involves analyzing CNH's projected cash flows against a high-quality bond yield curve, mainly calculated using a wide population of AA-grade corporate bonds subject to minimum amounts outstanding and meeting other defined selection criteria. The discount rates for the Company's remaining obligations are based on benchmark yield data of high-quality fixed income investments for which the timing and amounts of payments approximate the timing and amounts of projected benefit payments.
The expected long-term rate of return on plan assets reflects management's expectations on long-term average rates of return on funds invested to provide for benefits included in the projected benefit obligations. The expected return is based on the outlook for inflation, fixed income returns and equity returns while also considering asset allocation and investment strategy, premiums for active management to the extent asset classes are actively managed, and plan expenses. Return patterns and correlations, consensus return forecasts, and other relevant financial factors are analyzed to check for reasonability and appropriateness.
The assumed healthcare trend rate represents the rate at which healthcare costs are assumed to increase. Rates are determined based on company-specific experience, consultation with actuaries and outside consultants, and various trend factors including general and healthcare sector-specific inflation projections from the United States Department of Health and Human Services Healthcare Financing Administration. The initial trend is a short-term assumption based on recent experience and prevailing market conditions. The ultimate trend is a long-term assumption of healthcare cost inflation based on general inflation, incremental medical inflation, technology, new medicine, government cost-shifting, utilization changes, an aging population, and a changing mix of medical services.
CNH annually reviews the mortality assumptions and demographic characteristics of its pension plan and healthcare plan participants. For its U.S. pension and healthcare plans, the Company continued to use the adopted MP 2021 mortality improvement scale as it continues to be the most current. At this time the Company is not adjusting to the MP 2021 for any short-term or long-term impacts COVID may have on mortality improvement scales issued in the future. For its U.K. pension plans, the Company elected to utilize the CMI 2024 mortality improvement table.
The Company uses the spot yield curve approach to estimate the service and interest cost components of the net periodic pension and other postretirement benefit costs by applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected cash outflows.
Plan Assets
The investment strategy for the plan assets depends on the features of the plan and on the maturity of the obligations. Typically, less mature plan benefit obligations are funded by using more equity securities as they are expected to achieve long-term growth exceeding the rate of inflation. More mature plan benefit obligations are funded using more fixed income securities as they are expected to produce current income with limited volatility. Risk management practices include the use of multiple asset classes and investment managers within each asset class for diversification purposes. Specific guidelines for each asset class and investment manager are implemented and monitored.
Weighted-average target asset allocation for all plans for December 31, 2025 are as follows:
As of December 31, 2025
All Plans
Asset category:
Equity securities9 %
Debt securities68 %
Cash/Other23 %
CNH determines the fair value of plan assets using observable market data obtained from independent sources when available. CNH classifies its plan assets according to the fair value hierarchy:
•Level 1—Quoted prices for identical instruments in active markets.
•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
•Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The following summarizes the fair value of plan assets by asset category and levels within the fair value hierarchy as of December 31, 2025 (in millions of dollars):
As of December 31, 2025
TotalLevel 1Level 2Level 3
Fixed income securities:
U.S. government bonds$18 $18 $— $— 
U.S. corporate bonds9 9 — — 
Non-U.S. government bonds20 — 20 — 
Non-U.S. corporate bonds10 — 10 — 
Mortgage-backed securities2 — 2 — 
Other fixed income8 — 8 — 
Total Fixed income securities67 27 40 — 
Other types of investments:
Mutual funds(1)
939 — 939 — 
Insurance contracts71 — — 71 
Derivatives—credit contracts— — — — 
Real estate— — — — 
Total Other types of investments1,010 — 939 71 
Cash:18 15 3 — 
Total of Level 1, Level 2 and Level 3 Assets1,095 42 982 71 
Investments at net asset value:
Mutual funds(2)
46
Total Net Assets$1,141 
 
(1)This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.
(2)This category includes open-ended mutual fund, the underlying assets of the mutual fund are illiquid in nature and are not classified in the fair value hierarchy using the net asset per share practical expedient.
The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2025 (in millions of dollars):
Level 3 Assets
Balance at December 31, 2024$66 
Actual return on plan assets relating to assets still held at reporting date
2 
Purchases3 
Settlements(6)
Transfers in and/or out of level 3— 
Currency impact6 
Balance at December 31, 2025$71 
The following summarizes the fair value of plan assets by asset category and level within the fair value hierarchy as of December 31, 2024 (in millions of dollars):
As of December 31, 2024
TotalLevel 1Level 2Level 3
Fixed income securities:
U.S. government bonds$18 $18 $— $— 
U.S. corporate bonds8 8 — — 
Non-U.S. government bonds24 — 24 — 
Non-U.S. corporate bonds11 — 11 — 
Mortgage-backed securities2 — 2 — 
Other fixed income3 — 3 — 
Total Fixed income securities66 26 40 — 
Other types of investments:
Mutual funds(1)
860 — 860 — 
Insurance contracts66 — — 66 
Derivatives—credit contracts— — — — 
Real estate— — — — 
Total Other types of investments926 — 860 66 
Cash:36 14 22 — 
Total of Level 1, Level 2 and Level 3 Assets1,028 40 922 66 
Investments at net asset value:
Mutual funds(2)
49 
Total Net Assets$1,077 
(1)This category includes mutual funds, which primarily invest in non-U.S. equities and non-U.S. corporate bonds.
(2)This category includes open-ended mutual fund, the underlying assets of the mutual fund are illiquid in nature and are not classified in the fair value hierarchy using the net asset per share practical expedient.
The following table presents the changes in the Level 3 plan assets for the year ended December 31, 2024 (in millions of dollars):
Level 3 Assets
Balance at December 31, 2023$45 
Actual return on plan assets relating to assets still held at reporting date
1 
Purchases28 
Settlements(5)
Transfers in and/or out of Level 3(1)
Currency impact(2)
Balance at December 31, 2024$66 
Contributions
CNH expects to contribute (including through direct benefit payments) approximately $45 million to its pension plans, $15 million to its healthcare plans and $7 million to its other postemployment plans in 2026.
The benefit expected to be paid from the benefit plans, which reflect expected future years of service, and the Medicare subsidy expected to be received are as follows (in millions of dollars):
Pension PlansHealthcareOther
2026$100 $19 $7 
202793 18 6 
202893 16 6 
202992 16 7 
203089 15 8 
2031 - 2035424 76 38 
Total$891 $160 $72