Annual report pursuant to Section 13 and 15(d)

Retirement Benefit Plans (Tables)

v3.8.0.1
Retirement Benefit Plans (Tables)
12 Months Ended
Feb. 03, 2018
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Types of Retirement and Other Benefits
Retirement and other benefits include:
Defined Benefit Pension Plans
Primary Pension Plan – funded
Supplemental retirement plans – unfunded
 
Other Benefit Plans
Postretirement benefits – medical and dental
Defined contribution plans:
401(k) savings, profit-sharing and stock ownership plan
Deferred compensation plan
Schedule of Costs of Retirement Plans
($ in millions)
 
 
 
 
 
 
Primary Pension Plan
 
2017
 
2016
 
2015
Service cost
 
$
42

 
$
55

 
$
69

Interest cost
 
143

 
153

 
196

Expected return on plan assets
 
(216
)
 
(215
)
 
(357
)
Actuarial loss/(gain)
 

 

 
52

Amortization of prior service cost/(credit)
 
7

 
8

 
8

Settlement expense
 
13

 

 
180

Other
 

 

 
6

Net periodic benefit expense/(income)
 
$
(11
)
 
$
1

 
$
154

 
 
 
 
 
 
 
Supplemental Pension Plans
 
 
 
 
 
 
Service cost
 
$

 
$

 
$

Interest cost
 
7

 
7

 
7

Actuarial loss/(gain)
 
25

 
11

 
1

Amortization of prior service cost/(credit)
 

 

 

Net periodic benefit expense/(income)
 
$
32

 
$
18

 
$
8

 
 
 
 
 
 
 
Primary and Supplemental Pension Plans Total
 
 
 
 
 
 
Service cost
 
$
42

 
$
55

 
$
69

Interest cost
 
150

 
160

 
203

Expected return on plan assets
 
(216
)
 
(215
)
 
(357
)
Actuarial loss/(gain)
 
25

 
11

 
53

Amortization of prior service cost/(credit)
 
7

 
8

 
8

Settlement expense
 
13

 

 
180

Other
 

 

 
6

Net periodic benefit expense/(income)
 
$
21

 
$
19

 
$
162

Schedule of Changes in Projected Benefit Obligations
 
Primary Pension Plan
 
Supplemental Plans
 
($ in millions)
2017
 
2016
 
2017
 
2016
 
Change in PBO
 
 
 
 
 

 
 
 
Beginning balance
$
3,473


$
3,327


$
152


$
176

  
Service cost
42

  
55

  

  

  
Interest cost
143

  
153

  
7

  
7

  
Special termination benefits (1)
88

  

  
24

  

  
Settlements
(217
)
 

 

 

 
Curtailments
(27
)
 

 
3

 

 
Actuarial loss/(gain)
126

  
151

  
31

  
10

  
Benefits (paid)
(161
)
 
(213
)
 
(35
)
 
(41
)
 
Balance at measurement date
$
3,467

  
$
3,473

  
$
182

  
$
152

  
 
 
 
 
 
 
 
 
 
Change in fair value of plan assets
 
 
 
 
 
 
 
 
Beginning balance
$
3,455

  
$
3,287

  
$

  
$

  
Company contributions

  

  
35

  
41

  
Actual return on assets (2)
451

  
381

  

  

  
Settlements
(217
)
 

 

 

 
Benefits (paid)
(161
)
 
(213
)
 
(35
)
 
(41
)
 
Balance at measurement date
$
3,528

  
$
3,455

  
$

  
$

  
Funded status of the plan
$
61

(3) 
$
(18
)
(3) 
$
(182
)
(4) 
$
(152
)
(4) 
 
(1)
See Note 17 for VERP charges classified in Restructuring and management transition.
(2)
Includes plan administrative expenses.
(3)
$61 million in 2017 was included in Prepaid pension and $18 million in 2016 was included in Other liabilities in the Consolidated Balance Sheets.
(4)
$29 million in 2017 and $26 million in 2016 were included in Other accounts payable and accrued expenses on the Consolidated Balance Sheets, and the remaining amounts were included in Other liabilities.
Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss)
 
Primary Pension Plan
 
Supplemental Plans
($ in millions)
2017
 
2016
 
2017
 
2016
Net actuarial loss/(gain)
$
169

 
$
318

 
$
18

 
$
12

Prior service cost/(credit)
37

  
49

 
(3
)
  
(4
)
Total
$
206

(1) 
$
367

 
$
15

 
$
8

 
(1)
In 2018, approximately $7 million for the Primary Pension Plan is expected to be amortized from Accumulated other comprehensive income/(loss) and into the Consolidated Statement of Operations.

Schedule of Allocation of Plan Assets
 
 
Investments at Fair Value at February 3, 2018
($ in millions)
 
Level 1 (1)
 
Level 2 (1)
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash
 
$
18

 
$

 
$

 
$
18

Common collective trusts
 

 
100

 

 
100

Cash and cash equivalents total
 
18

 
100

 

 
118

Common collective trusts – international
 

 
155

 

 
155

Equity securities – domestic
 
426

 

 

 
426

Equity securities – international
 
160

 

 

 
160

Equity securities total
 
586

 
155

 

 
741

Common collective trusts
 

 
904

 

 
904

Corporate bonds
 

 
982

 
10

 
992

Swaps
 

 
848

 

 
848

Government securities
 

 
187

 

 
187

Mortgage backed securities
 

 
6

 

 
6

Other fixed income
 

 
143

 
4

 
147

Fixed income total
 

 
3,070

 
14

 
3,084

Public REITs
 
38

 

 

 
38

Real estate total
 
38

 

 

 
38

Total investment assets at fair value
 
$
642

 
$
3,325

 
$
14

 
$
3,981

Liabilities
 
 
 
 
 
 
 
 
Swaps
 
$

 
$
(837
)
 
$

 
$
(837
)
Other fixed income
 

 
(5
)
 

 
(5
)
Fixed income total
 

 
(842
)
 

 
(842
)
Total liabilities at fair value
 
$

 
$
(842
)
 
$

 
$
(842
)
Accounts payable, net
 
 
 
 
 
 
 
(47
)
Investments at Net Asset Value (NAV) (2)
 
 
 
 
 
 
 
 
Private equity
 
 
 
 
 
 
 
$
191

Private real estate
 
 
 
 
 
 
 
62

Hedge funds
 
 
 
 
 
 
 
183

Total investments at NAV
 
 
 
 
 
 
 
$
436

Total net assets
 
 
 
 
 
 
 
$
3,528

 
(1)
There were no significant transfers in or out of level 1 or 2 investments.
(2)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) 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 Consolidated Balance Sheet.
 
 
Investments at Fair Value at January 28, 2017
($ in millions)
 
Level 1 (1)
 
Level 2 (1)
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash
 
$
2

 
$

 
$

 
$
2

Common collective trusts
 

 
88

 

 
88

Cash and cash equivalents total
 
2

 
88

 

 
90

Common collective trusts – international
 

 
148

 

 
148

Equity securities – domestic
 
421

 

 

 
421

Equity securities – international
 
113

 

 

 
113

Equity securities total
 
534

 
148

 

 
682

Common collective trusts
 

 
864

 

 
864

Corporate bonds
 

 
919

 
7

 
926

Swaps
 

 
934

 

 
934

Government securities
 

 
185

 

 
185

Mortgage backed securities
 

 
4

 

 
4

Other fixed income
 

 
149

 

 
149

Fixed income total
 

 
3,055

 
7

 
3,062

Public REITs
 
37

 

 

 
37

Private real estate
 

 
15

 

 
15

Real estate total
 
37

 
15

 

 
52

Total investment assets at fair value
 
$
573

 
$
3,306

 
$
7

 
$
3,886

Liabilities
 
 
 
 
 
 
 
 
Swaps
 
$

 
$
(928
)
 
$

 
$
(928
)
Other fixed income
 

 
(6
)
 

 
(6
)
Fixed income total
 

 
(934
)
 

 
(934
)
Total liabilities at fair value
 
$

 
$
(934
)
 
$

 
$
(934
)
Accounts payable, net
 
 
 
 
 
 
 
(76
)
Investments at Net Asset Value (NAV) (2)
 
 
 
 
 
 
 
 
Private equity
 
 
 
 
 
 
 
$
220

Private real estate
 
 
 
 
 
 
 
135

Hedge funds
 
 
 
 
 
 
 
224

Total investments at NAV
 
 
 
 
 
 
 
$
579

Total net assets
 
 
 
 
 
 
 
$
3,455


(1)
There were no significant transfers in or out of level 1 or 2 investments.
(2)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) 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 Consolidated Balance Sheet.
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets
 
2017
($ in millions)
Corporate Loans
 
Corporate Bonds
Balance, beginning of year
$

 
$
7

Transfers, net

 

Realized gains/(loss)

 
(7
)
Unrealized (losses)/gains

 
6

Purchases and issuances
4

 
6

Sales, maturities and settlements

 
(2
)
Balance, end of year
$
4

 
$
10

 
 
2016
($ in millions)
Corporate Loans
 
Corporate Bonds
Balance, beginning of year
$
3

 
$
5

Realized gains/(loss)

 
3

Unrealized (losses)/gains

 
(4
)
Purchases and issuances

 
15

Sales, maturities and settlements
(3
)
 
(12
)
Balance, end of year
$

 
$
7

Schedule of Expected Benefit Payments
($ in millions)
 
Primary Plan Benefits
 
Supplemental Plan Benefits
2018
 
$
195

 
$
29

2019
 
196

 
28

2020
 
199

 
26

2021
 
202

 
21

2022
 
206

 
8

2023-2027
 
1,080

 
44

Schedule of Target Allocation Ranges for Defined Benefit Plan Assets
 
 
2017 Target
 
Plan Assets
Asset Class
 
Allocation Ranges
 
2017
 
2016
Equity
 
15% - 35%
 
23
%
 
22
%
Fixed income
 
55% - 70%
 
62
%
 
60
%
Real estate, cash and other investments
 
10% - 20%
 
15
%
 
18
%
Total
 
 
 
100
%
 
100
%
Weighted Average Actuarial Assumptions Used To Determine Liability [Member]  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Schedule of Assumptions Used
 
 
2017
 
2016
 
2015
Discount rate
 
3.98
%
 
4.40
%
 
4.73
%
Salary progression rate
 
3.8
%
 
3.9
%
 
3.9
%
Weighted Average Actuarial Assumptions Used To Determine Expense [Member]  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Schedule of Assumptions Used
 
2017
 
2016
 
2015
 
Expected return on plan assets
6.50
%
 
6.75
%
 
6.75
%
 
Discount rate
4.40
%
(1) 
4.73
%
 
3.87
%
 
Salary increase
3.9
%
 
3.9
%
 
3.5
%
 
 
(1)
As of January 31, 2017. The Primary Pension Plan was remeasured as of March 31, 2017 using a discount rate of 4.34% and as of October 31, 2017 using a discount rate of 3.94%.