Annual report pursuant to Section 13 and 15(d)

Retirement Benefit Plans (Tables)

v3.20.1
Retirement Benefit Plans (Tables)
12 Months Ended
Feb. 01, 2020
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 – dental
Defined contribution plans:
401(k) Safe harbor plan and the 401(k) savings, profit-sharing and stock ownership plan
Deferred compensation plan

Schedule of Costs of Retirement Plans
 
 
 
 
 
 
 
($ in millions)
 
2019
 
2018
 
2017
Service cost
 
$
28

 
$
38

 
$
42

 
 
 
 
 
 
 
Other components of net periodic pension and postretirement benefit cost/(income):
 
 
 
 
 
 
Interest cost
 
131

 
141

 
150

Expected return on plan assets
 
(191
)
 
(223
)
 
(216
)
Amortization of actuarial loss/(gain)
 
10

 
(3
)
 
25

Amortization of prior service cost/(credit)
 
7

 
7

 
7

Settlement expense
 
8

 
7

 
13

Curtailment (gain)/loss recognized
 

 

 
7

Special termination benefit recognized
 

 

 
112

 
 
(35
)
 
(71
)
 
98

Net periodic benefit expense/(income)
 
$
(7
)
 
$
(33
)
 
$
140


Schedule of Changes in Projected Benefit Obligations
 
Primary Pension Plan
 
Supplemental Plans
 
($ in millions)
2019
 
2018
 
2019
 
2018
 
Change in PBO
 
 
 
 
 

 
 
 
Beginning balance
$
3,016


$
3,467


$
146


$
182

  
Service cost
28

  
37

  

  
1

  
Interest cost
125

  
133

  
6

  
8

  
Settlements
(153
)
 
(174
)
 

 

 
Actuarial loss/(gain)
478

  
(289
)
  
14

  
(12
)
  
Benefits (paid)
(147
)
 
(158
)
 
(30
)
 
(33
)
 
Balance at measurement date
$
3,347

  
$
3,016

  
$
136

  
$
146

  
 
 
 
 
 
 
 
 
 
Change in fair value of plan assets
 
 
 
 
 
 
 
 
Beginning balance
$
3,163

  
$
3,528

  
$

  
$

  
Company contributions

  

  
30

  
33

  
Actual return on assets (1)
604

  
(33
)
  

  

  
Settlements
(153
)
 
(174
)
 

 

 
Benefits (paid)
(147
)
 
(158
)
 
(30
)
 
(33
)
 
Balance at measurement date
$
3,467

  
$
3,163

  
$

  
$

  
Funded status of the plan
$
120

(2) 
$
147

(2) 
$
(136
)
(3) 
$
(146
)
(3) 
 
(1)
Includes plan administrative expenses.
(2)
$120 million in 2019 and $147 million in 2018 were included in Prepaid pension in the Consolidated Balance Sheets.
(3)
$27 million in 2019 and $30 million in 2018 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)
2019
 
2018
 
2019
 
2018
Net actuarial loss/(gain)
$
184

 
$
129

 
$
12

 
$
9

Prior service cost/(credit)
23

  
30

 
(2
)
  
(3
)
Total
$
207

(1) 
$
159

 
$
10

 
$
6

 
(1)
In 2020, approximately $6 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 1, 2020
($ in millions)
 
Level 1 (1)
 
Level 2 (1)
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash
 
$
30

 
$

 
$

 
$
30

Common collective trusts
 

 
65

 

 
65

Cash and cash equivalents total
 
30

 
65

 

 
95

Common collective trusts – international
 

 
42

 

 
42

Equity securities – domestic
 
356

 

 

 
356

Equity securities – international
 
154

 

 

 
154

Equity securities total
 
510

 
42

 

 
552

Common collective trusts
 

 
325

 

 
325

Corporate bonds
 

 
1,833

 
4

 
1,837

Swaps
 

 
630

 

 
630

Government securities
 

 
441

 

 
441

Mortgage backed securities
 

 
15

 

 
15

Other fixed income
 

 
140

 
6

 
146

Fixed income total
 

 
3,384

 
10

 
3,394

Public REITs
 
48

 

 

 
48

Real estate total
 
48

 

 

 
48

Total investment assets at fair value
 
$
588

 
$
3,491

 
$
10

 
$
4,089

Liabilities
 
 
 
 
 
 
 
 
Swaps
 
$

 
$
(625
)
 
$

 
$
(625
)
Other fixed income
 
(10
)
 
(10
)
 

 
(20
)
Fixed income total
 
(10
)
 
(635
)
 

 
(645
)
Total liabilities at fair value
 
$
(10
)
 
$
(635
)
 
$

 
$
(645
)
Accounts payable, net
 
 
 
 
 
 
 
(223
)
Investments at Net Asset Value (NAV) (2)
 
 
 
 
 
 
 
 
Private equity
 
 
 
 
 
 
 
$
123

Private real estate
 
 
 
 
 
 
 
51

Hedge funds
 
 
 
 
 
 
 
72

Total investments at NAV
 
 
 
 
 
 
 
$
246

Total net assets
 
 
 
 
 
 
 
$
3,467

 
(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 February 2, 2019
($ in millions)
 
Level 1 (1)
 
Level 2 (1)
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
Cash
 
$
9

 
$

 
$

 
$
9

Common collective trusts
 

 
60

 

 
60

Cash and cash equivalents total
 
9

 
60

 

 
69

Common collective trusts – international
 

 
55

 

 
55

Equity securities – domestic
 
326

 

 

 
326

Equity securities – international
 
146

 

 

 
146

Equity securities total
 
472

 
55

 

 
527

Common collective trusts
 

 
897

 

 
897

Corporate bonds
 

 
985

 
4

 
989

Swaps
 

 
647

 

 
647

Government securities
 

 
200

 

 
200

Mortgage backed securities
 

 
5

 

 
5

Other fixed income
 

 
107

 
6

 
113

Fixed income total
 

 
2,841

 
10

 
2,851

Public REITs
 
41

 

 

 
41

Real estate total
 
41

 

 

 
41

Total investment assets at fair value
 
$
522

 
$
2,956

 
$
10

 
$
3,488

Liabilities
 
 
 
 
 
 
 
 
Swaps
 
$

 
$
(642
)
 
$

 
$
(642
)
Other fixed income
 
(7
)
 
(2
)
 

 
(9
)
Fixed income total
 
(7
)
 
(644
)
 

 
(651
)
Total liabilities at fair value
 
$
(7
)
 
$
(644
)
 
$

 
$
(651
)
Accounts payable, net
 
 
 
 
 
 
 
(26
)
Investments at Net Asset Value (NAV) (2)
 
 
 
 
 
 
 
 
Private equity
 
 
 
 
 
 
 
$
164

Private real estate
 
 
 
 
 
 
 
55

Hedge funds
 
 
 
 
 
 
 
133

Total investments at NAV
 
 
 
 
 
 
 
$
352

Total net assets
 
 
 
 
 
 
 
$
3,163


(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
 
2019
($ in millions)
Corporate Loans
 
Corporate Bonds
Balance, beginning of year
$
6

 
$
4

Purchases and issuances

 

Sales, maturities and settlements

 

Balance, end of year
$
6

 
$
4

 
 
2018
($ in millions)
Corporate Loans
 
Corporate Bonds
Balance, beginning of year
$
4

 
$
10

Purchases and issuances
3

 

Sales, maturities and settlements
(1
)
 
(6
)
Balance, end of year
$
6

 
$
4


Schedule of Expected Benefit Payments
($ in millions)
 
Primary Plan Benefits
 
Supplemental Plan Benefits
2020
 
$
237

 
$
27

2021
 
236

 
22

2022
 
235

 
9

2023
 
229

 
8

2024
 
227

 
8

2025-2029
 
1,067

 
38


Schedule of Target Allocation Ranges for Defined Benefit Plan Assets
 
 
2019 Target
 
Plan Assets
Asset Class
 
Allocation Ranges
 
2019
 
2018
Equity
 
10% - 25%
 
17
%
 
18
%
Fixed income
 
60% - 75%
 
74
%
 
68
%
Real estate, cash and other investments
 
0% - 25%
 
9
%
 
14
%
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
 
 
2019
 
2018
 
2017
Discount rate
 
3.08
%
 
4.33
%
 
3.98
%
Salary progression rate
 
2.7
%
 
2.8
%
 
3.8
%

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
 
2019
 
2018
 
2017
 
Expected return on plan assets
6.25
%
 
6.50
%
 
6.50
%
 
Discount rate
4.33
%
 
3.98
%
 
4.40
%
(1) 
Salary increase
2.8
%
 
3.8
%
 
3.9
%
 
 
(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%.