Cigna Group

Note 17 – Pension

A. About Our Plans

The Company sponsors U.S. and non-U.S. defined benefit pension plans; future benefit accruals for the domestic plans are frozen.

Accounting Policy. The Company measures the assets and liabilities of its domestic pension plans as of December 31. Benefit obligations are measured at the present value of estimated future payments based on actuarial assumptions. The Company uses the corridor method to account for changes in the benefit obligation when actual results differ from those assumed or when assumptions change. These changes are called net unrecognized actuarial gains (losses). Under the corridor method, net unrecognized actuarial gains (losses) are initially recorded in Accumulated other comprehensive loss. When the unrecognized gain (loss) exceeds 10% of the benefit obligation, that excess is amortized to expense over the expected remaining lives of plan participants. The net plan expense is reported in Interest expense and other in the Consolidated Statements of Income.

We measure plan assets at fair value for balance sheet purposes and to measure pension benefit costs. When the actual return differs from the expected return, those differences are reflected in the net unrealized actuarial gain (loss) discussed above.

B. Funded Status and Amounts Included in Accumulated Other Comprehensive Loss

The following table summarizes the projected benefit obligations and assets related to our U.S. and non-U.S. pension plans:

(1) 2025 losses reflect a decrease in the discount rate, while 2024 gains reflect an increase in the discount rate.

We fund our qualified pension plans at least at the minimum amount required by the Employee Retirement Income Security Act of 1974 and the Pension Protection Act of 2006. Contributions made by the Company to the qualified pension plan in 2025 and anticipated contributions for 2026 are immaterial. Future years' contributions will ultimately be based on a wide range of factors, including but not limited to asset returns, discount rates and funding targets. Nonqualified pension plans are generally funded on a pay-as-you-go basis as there areno plan assets for these plans.

Benefit Payments. The following benefit payments are expected to be paid in:

Amounts reflected in the pension assets (liabilities) shown above that have not yet been reported in Net income and, therefore, have been included in Accumulated other comprehensive loss consisted of the following:

C. Cost of Our Plans

Net pension cost (benefit) was as follows:

D. Assumptions Used for Pension

The Company develops discount rates by applying actual annualized yields for high-quality bonds by duration to the expected pension plan liability cash flows. The bond yields represent a diverse mix of actively traded, high-quality fixed-income securities that have an above-average return at each duration, as management believes this approach is representative of the yield achieved through plan asset investment strategy. The expected long-term return on plan assets was developed considering historical long-term actual returns, expected long-term market conditions, plan asset mix and management's plan asset investment strategy.

E. Pension Plan Assets

As of December 31, 2025, pension assets included $3.8 billion invested in the separate accounts of Connecticut General Life Insurance Company, a subsidiary of the Company, and an additional $0.1 billion invested in funds of unaffiliated investment managers.

The fair values of pension assets by category are as follows:

(1) A pooled separate account has several participating benefit plans and each owns a share of the total pool of investments.

The Company's current target investment allocation percentages are 90% fixed income and 10% in other investments, including private equity (securities partnerships), public equity securities, and real estate, and are developed by management as guidelines, although the fair values of each asset category are expected to vary as a result of changes in market conditions. The Company will evaluate further allocation changes to equity securities, other investments and fixed-income securities as funding levels change.

See Note 12 to the Consolidated Financial Statements for further details regarding how fair value is determined, including the level within the fair value hierarchy and the procedures we use to validate fair value measurements. The Company classifies substantially all debt securities in Level 2 for pension plan assets. These assets are valued using recent trades of similar securities or are fund investments priced using their daily net asset value that is the exit price. All domestic equity securities and international equity funds within pension assets are classified in Level 3.

Securities partnerships, real estate and hedge funds are valued using net asset value as a practical expedient and are excluded from the fair value hierarchy. See Note 12 to the Consolidated Financial Statements for additional disclosures related to these assets invested in the separate accounts of the Company's subsidiary. Certain securities as described in Note 12 to the Consolidated Financial Statements, as well as commercial mortgage loans and guaranteed deposit account contracts, are classified in Level 3 because unobservable inputs used in their valuation are significant.

F.401(k) Plan

The Company sponsors a 401(k) plan. All employees are immediately eligible for the plan at hire. The Company matches a portion of employees' contributions to the plan and may increase its matching contributions if the Company's annual performance meets certain targets. Plan participants may invest in various funds that invest in the Company's common stock, several diversified stock funds, a bond fund or stable value funds. The Company common stock fund under the plan constitutes an "employee stock ownership plan" as defined in the Internal Revenue Code. Dividends from the Company common stock fund are reinvested in a participant's stock fund account unless the participant elects to receive the dividends in cash. The Company's annual expense for the plan was $280 million, $301 million and $296 million for the years ended December 31, 2025, 2024 and 2023, respectively.