v3.25.4
Pension plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Pension plans
(24)
Pension plans

Certain Berkshire subsidiaries sponsor defined benefit pension plans. Plan benefits are generally based on years of service and compensation or fixed benefit rates. Plan sponsors may contribute to the plans to meet regulatory requirements or may make discretionary contributions. Benefits under qualified U.S. and certain non-U.S. defined benefit pension plans are funded with assets held in trusts. Benefits under other non-qualified retirement plans are unfunded. Our net periodic pension expense (income) for each of the three years ending December 31, 2025 was as follows (in millions).

 

 

 

2025

 

 

2024

 

 

2023

 

Service cost

 

$

95

 

 

$

107

 

 

$

111

 

Interest cost

 

 

627

 

 

 

617

 

 

 

640

 

Expected return on plan assets

 

 

(859

)

 

 

(818

)

 

 

(785

)

Other

 

 

(67

)

 

 

41

 

 

 

2

 

Net periodic pension expense (income)

 

$

(204

)

 

$

(53

)

 

$

(32

)

 

The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits earned based on service and compensation prior to the valuation date. The ABO was $11.1 billion at December 31, 2025 and $11.2 billion at December 31, 2024. The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon service and compensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation levels.

Reconciliations of the changes in plan assets and PBOs for each of the two years ending December 31, 2025 and the asset and liability balances reflected in the Consolidated Balance Sheets at December 31, 2025 and 2024 follow (in millions).

 

 

 

2025

 

 

2024

 

Plan assets

 

 

 

 

 

 

Balance at the beginning of the year

 

$

14,180

 

 

$

13,379

 

Employer contributions

 

 

108

 

 

 

111

 

Benefits paid

 

 

(1,084

)

 

 

(810

)

Settlements paid

 

 

(115

)

 

 

(354

)

Actual return on plan assets

 

 

319

 

 

 

1,909

 

Other

 

 

185

 

 

 

(55

)

Balance at the end of the year

 

$

13,593

 

 

$

14,180

 

Projected benefit obligations

 

 

 

 

 

 

Balance at the beginning of the year

 

$

11,720

 

 

$

12,767

 

Service cost

 

 

95

 

 

 

107

 

Interest cost

 

 

627

 

 

 

617

 

Benefits paid

 

 

(1,084

)

 

 

(810

)

Settlements paid

 

 

(115

)

 

 

(354

)

Actuarial (gains) losses and other

 

 

296

 

 

 

(607

)

Balance at the end of the year

 

$

11,539

 

 

$

11,720

 

Net funded status - asset (liability)

 

$

2,054

 

 

$

2,460

 

Balances included in other assets

 

$

3,100

 

 

$

3,490

 

Balances included in accounts payable and other liabilities

 

$

1,046

 

 

$

1,030

 

 

Weighted average assumptions used in determining PBOs and net periodic pension expense follow.

 

 

2025

 

2024

 

2023

 

Discount rate applicable to PBOs

 

5.4

%

 

5.5

%

 

5.0

%

Expected long-term rate of return on plan assets

 

6.3

 

 

5.9

 

 

6.0

 

Rate of compensation increase, if applicable

2.6

 

2.6

 

2.6

 

Discount rate applicable to net periodic pension expense

 

5.5

 

 

5.1

 

 

5.3

 

 

Estimated benefit payments over the next ten years are (in millions): 2026 – $883; 2027 – $881; 2028 – $873; 2029 – $893; 2030 – $880; and 2031 through 2035 – $4,355. Our subsidiaries expect to make contributions of $95 million to the pension plans in 2026.

Notes to Consolidated Financial Statements

(24) Pension plans

Fair value measurements of plan assets as of December 31, 2025 and 2024 follow (in millions).

 

 

 

Fair Value

 

 

Investments
carried at net

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

asset value

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and short-term investments

 

$

2,061

 

 

$

1,983

 

 

$

78

 

 

$

—

 

 

$

—

 

Equity securities

 

 

6,171

 

 

 

5,402

 

 

 

621

 

 

 

148

 

 

 

—

 

Fixed maturity securities

 

 

2,951

 

 

 

2,172

 

 

 

779

 

 

 

—

 

 

 

—

 

Investment funds and other

 

 

2,410

 

 

 

234

 

 

 

80

 

 

 

24

 

 

 

2,072

 

 

$

13,593

 

 

$

9,791

 

 

$

1,558

 

 

$

172

 

 

$

2,072

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and short-term investments

 

$

600

 

 

$

556

 

 

$

44

 

 

$

—

 

 

$

—

 

Equity securities

 

 

9,757

 

 

 

9,036

 

 

 

581

 

 

 

140

 

 

 

—

 

Fixed maturity securities

 

 

1,747

 

 

 

953

 

 

 

794

 

 

 

—

 

 

 

—

 

Investment funds and other

 

 

2,076

 

 

 

385

 

 

 

144

 

 

 

23

 

 

 

1,524

 

 

$

14,180

 

 

$

10,930

 

 

$

1,563

 

 

$

163

 

 

$

1,524

 

 

Plan assets are generally invested with the long-term objective of producing earnings to adequately cover expected benefit obligations. The expected rates of return on plan assets reflect subjective assessments of expected long-term investment returns. Generally, past investment returns are not given significant consideration when establishing assumptions for expected long-term rates of return on plan assets. Actual experience will differ from the assumed rates of return.

A reconciliation of the pre-tax accumulated other comprehensive income of our defined benefit pension plans for each of the two years ending December 31, 2025 follows (in millions).

 

 

 

2025

 

 

2024

 

Balance at the beginning of the year

 

$

1,467

 

 

$

(161

)

Amount included in net periodic pension expense

 

 

(68

)

 

 

29

 

Actuarial gains (losses) and other

 

 

(732

)

 

 

1,599

 

Balance at the end of the year

 

$

667

 

 

$

1,467

 

 

Our subsidiaries may also sponsor defined contribution retirement plans, such as 401(k) or profit-sharing plans. Employee contributions are subject to regulatory limitations and specific plan provisions. Several of these plans provide for employer matching contributions as specified in the plans and may provide for additional discretionary employer contributions. Our defined contribution plan expense was approximately $1.4 billion in 2025, $1.3 billion in 2024 and $1.1 billion in 2023.