STI 2018 Annual Report

Notes to Consolidated Financial Statements, continued 134 Other Postretirement Benefits The Company provides certain health care and life insurance benefits (“Other Postretirement Benefits”) to retired employees. At the option of the Company, retirees may continue certain health and life insurance benefits if they meet specific age and service requirements at the time of retirement. The health care plans are contributory with participant contributions adjusted annually, and the life insurance plans are noncontributory. Certain retiree health benefits are funded in a Retiree Health Trust. Additionally, certain retiree life insurance benefits are funded in a VEBA. Effective April 1, 2014, the Company amended the plan, which now requires retirees age 65 and older to enroll in individual Medicare supplemental plans. In addition, the Company will fund a tax-advantaged HRA to assist some retirees with medical expenses. Changes in Benefit Obligations and Plan Assets The following table presents the change in benefit obligations, change in fair value of plan assets, funded status, accumulated benefit obligation, and theweighted average discount rate related to theCompany's pension and other postretirement benefits plans for the years ended December 31: Pension Benefits 1 Other Postretirement Benefits (Dollars in millions) 2018 2017 2018 2017 Benefit obligation, beginning of year $2,910 $2,747 $58 $58 Service cost 6 5 — — Interest cost 91 95 1 1 Plan participants’ contributions — — 5 4 Actuarial (gain)/loss (228) 225 (2) (1) Benefits paid (178) (156) (11) (8) Administrative expenses paid from pension trust (6) (6) — — Plan amendments — — — (5) Special termination benefits — — — 9 Settlement loss (127) — — — Benefit obligation, end of year 2 $2,468 $2,910 $51 $58 Change in plan assets: Fair value of plan assets, beginning of year $3,288 $3,016 $164 $157 Actual return on plan assets (100) 425 (3) 11 Employer contributions 3 8 9 — — Plan participants’ contributions — — 5 4 Benefits paid (178) (156) (11) (8) Administrative expenses paid from pension trust (6) (6) — — Settlement loss (127) — — — Fair value of plan assets, end of year $2,885 $3,288 $155 $164 Funded status at end of year 4, 5 $417 $378 $104 $106 Funded status at end of year (%) 117% 113% Accumulated benefit obligation $2,468 $2,910 Discount rate 4.27% 3.62% 3.96% 3.29% 1 Employer contributions represent the benefits that were paid to nonqualified plan participants. Unfunded nonqualified supplemental pension plans are not funded through plan assets. 2 Includes $68 million and $78 million of benefit obligations for the unfunded nonqualified supplemental pension plans at December 31, 2018 and 2017, respectively. 3 The Company contributed less than $1 million to the other postretirement benefits plans during both 2018 and 2017. 4 Pension benefits included assets of $485 million and $456 million, and liabilities of $68 million and $78 million, at December 31, 2018 and 2017, respectively, recorded in Other assets in the Consolidated Balance Sheets. 5 Other postretirement benefits included assets of $104 million and $106 million at December 31, 2018 and 2017, respectively, recorded in Other assets in the Consolidated Balance Sheets.