Actual allocations within target allocations (as a percent)

  
The accumulated benefit obligation for all pension plans as of December 31, 2021 and 2020 was $1.8 billion and $1.2 billion, respectively. The following table provides information for pension plans with benefit obligations in excess of plan assets:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, |
| 2021 |  | 2020 |
| (in millions) |
| Pension plans with accumulated benefit obligations in excess of plan assets |  |  |  |
| Accumulated benefit obligation | $ | 1,769  |  |  | $ | 1,211  |  |
| Fair value of plan assets | 1,583  |  |  | 905  |  |
| Pension plans with projected benefit obligations in excess of plan assets |  |  |  |
| Projected benefit obligation | $ | 1,815  |  |  | $ | 1,271  |  |
| Fair value of plan assets | 1,583  |  |  | 905  |  |

The weighted average assumptions used to determine benefit obligations were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Pension Plans |  | Other Postretirement Plans |
| 2021 |  | 2020 |  | 2021 |  | 2020 |
|  |  |  |  |  |  |  |  |
| Discount rates | 2.46  | % |  | 2.16  | % |  | 2.01  | % |  | 2.01  | % |
| Rates of increase in compensation levels | 3.72  |  |  | 3.96  |  |  | N/A |  | N/A |
| Interest crediting rates for cash balance plans | 5.00  |  |  | 5.00  |  |  | N/A |  | N/A |

The weighted average assumptions used to determine net periodic benefit cost of pension plans were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
|  |  |  |  |  |  |
| Discount rates | 2.33  | % |  | 2.97  | % |  | 4.00  | % |
| Rates of increase in compensation levels | 5.21  |  |  | 4.01  |  |  | 4.25  |  |
| Expected long-term rates of return on assets | 6.58  |  |  | 7.14  |  |  | 7.18  |  |
| Interest crediting rates for cash balance plans | 5.00  |  |  | 5.00  |  |  | 5.00  |  |

In developing the expected long-term rate of return on assets, management evaluated input from an external consulting firm, including their projection of asset class return expectations and long-term inflation assumptions. The Company also considered historical returns on the plans’ assets. Discount rates are based on yields available on high-quality corporate bonds that would generate cash flows necessary to pay the benefits when due. The Company’s pension plans’ assets are invested in an aggregate diversified portfolio to minimize the impact of any adverse or unexpected results from a security class on the entire portfolio. Diversification is interpreted to include diversification by asset type, performance and risk characteristics and number of investments. When appropriate and consistent with the objectives of the plans, derivative instruments may be used to mitigate risk or provide further diversification, subject to the investment policies of the plans. Asset classes and ranges considered appropriate for investment of the plans’ assets are determined by each plan’s investment committee. The target allocations are 70% equity securities, 20% debt securities and 10% all other types of investments, except for the assets in pooled pension funds which are 70% equity securities and 30% debt securities and additional voluntary contribution assets outside the U.S. which are allocated at the discretion of the individual and will be converted at retirement into the defined benefit pension plan. In addition, pension plan assets acquired in the acquisition of the BMO Global Asset Management (EMEA) business include target portfolio allocations of approximately 90% collective funds investing primarily in debt securities, equity securities, and certain derivatives, either directly or through other collective funds and 10% to a growth portfolio primarily investing in private equity hedge fund investments. Actual allocations will generally be within 5% of these targets. As of December 31, 2021, there were no significant holdings of any single issuer and the exposure to derivative instruments was not significant.        144
