Changes in our accrued liabilities for severance expenses and leased real estate were as follows:

<table><tr><td rowspan="2"></td><td>Severance</td><td>Real
Estate</td></tr><tr><td colspan="2">(Dollars in millions)</td></tr><tr><td>Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . .</td><td colspan="2"> $ 14      80</td></tr><tr><td>Accrued to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>173</td><td>4</td></tr><tr><td>Payments, net ......................................</td><td>(89)</td><td>(20)</td></tr><tr><td>Reversals and adjustments ............................</td><td> —</td><td>3</td></tr><tr><td>Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>98</td><td>67</td></tr><tr><td>Accrued to expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .</td><td>42</td><td>4</td></tr><tr><td>Liabilities assumed in acquisition of Level 3 ..............</td><td>1</td><td>4</td></tr><tr><td>Payments, net ......................................</td><td>(108)</td><td>(13)</td></tr><tr><td>Reversals and adjustments ............................</td><td> —</td><td>2</td></tr><tr><td>Balance at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . .</td><td> $ 33</td><td>64</td></tr></table>

# (9) Employee Benefits

# Pension, Post-Retirement and Other Post-Employment Benefits

We sponsor various defined benefit pension plans (qualified and non-qualified) which, in the aggregate, cover a substantial portion of our employees including legacy CenturyLink, legacy Qwest Communications International, Inc. (“Qwest”) and legacy Embarq employees. On December 31, 2015, we merged our existing qualified pension plans, which included merging the Qwest Pension Plan and Embarq Retirement Pension Plan into the CenturyLink Retirement Plan. The CenturyLink Retirement Plan was renamed the CenturyLink Combined Pension Plan (“Combined Plan”). Pension benefits for participants of the new Combined Plan who are represented by a collective bargaining agreement are based on negotiated schedules. All other participants’ pension benefits are based on each individual participant’s years of service and compensation. We also maintain non-qualified pension plans for certain current and former highly compensated employees. We maintain post-retirement benefit plans that provide health care and life insurance benefits for certain eligible retirees. We also provide other post-employment benefits for certain eligible former employees. We use a December 31 measurement date for all our plans.

# Pension Benefits

In connection with the acquisition of Level 3 Communications, Inc. on November 1, 2017, we assumed defined benefit pension plans sponsored by various Level 3 companies for their employees. Based on a valuation analysis, we recognized a \$20 million liability on November 1, 2017 for the unfunded status of the Level 3 pension plans, reflecting projected benefit obligations of 167 million, in excess of the \$147 million fair value of plan assets.

Current funding laws require a company with a pension shortfall to fund the annual cost of benefits earned in addition to a seven-year amortization of the shortfall. Our funding policy for our Combined Plan is to make contributions with the objective of accumulating sufficient assets to pay all qualified pension benefits when due under the terms of the plan. The accounting unfunded status of our qualified pension plan was \$2.004 billion and\$2.352 billion as of December 31, 2017 and 2016, respectively.

We made a voluntary cash contribution to our qualified pension plan of \$100 million in both 2017 and 2016, and paid \$5 million and \$7 million of benefits directly to participants of our non-qualified pension plans in 2017 and 2016, respectively. Based on current laws and circumstances, we are not required to make any contributions to our qualified pension plan in 2018, but we currently expect to make a voluntary contribution of \$100 million to the trust for our qualified pension plan in 2018. We estimate that in 2018 we will pay \$5 million of benefits directly to participants of our non-qualified pension plans.

As mentioned above, we assumed in the Level 3 acquisition certain contributory and non-contributory employee pension plans, both qualified and non-qualified plans (the “Level 3 Pensions”). At December 31, 2017, the fair value of the Level 3 Pensions’ plan assets was \$147 million, and the associated benefit obligation was\$167 million. We recognized the unfunded status of Level 3’s pension plans of \$20 million on our consolidated balance sheet as of December 31, 2017, and the net periodic benefit expense of less than \$1 million for the period November 1, 2017 to December 31, 2017, in our consolidated income statement for the year ended December 31, 2017. Due to the insignificant amount of these pension plans, we have predominantly excluded them from the remaining employee benefit disclosures in this Note.

# Post-Retirement Benefits

In connection with our acquisition of Level 3 Communications, Inc. on November 1, 2017, we assumed post-retirement benefit plans sponsored by Level 3 Communications, L.L.C. and Continental Level 3, Inc. for certain of its current and former employees. Based on a valuation analysis, we recognized less than \$1 million in liability for the unfunded status of Level 3’s post-retirement benefit plans.

Our post-retirement benefit plans provide post-retirement benefits to qualified retirees and allow (i) eligible employees retiring before certain dates to receive benefits at no or reduced cost and (ii) eligible employees retiring after certain dates to receive benefits on a shared cost basis. The post-retirement benefits not paid by the trusts are funded by us and we expect to continue funding these post-retirement obligations as benefits are paid. The accounting unfunded status of our qualified post-retirement benefit plan was \$3.352 billion and\$3.360 billion as of December 31, 2017 and 2016, respectively.

Assets in the post-retirement trusts have been substantially depleted as of December 31, 2016; however we will continue to pay certain post-retirement benefits through the trusts. No contributions were made to the post-retirement trusts in 2017 and 2016. Benefits not paid from the trusts are expected to be paid directly by us with available cash. In 2017, we paid \$237 million of post-retirement benefits, net of participant contributions and direct subsidies. In 2018, we expect to pay \$283 million of post-retirement benefits, net of participant contributions and direct subsidies. The increase in anticipated post-retirement benefit payments is the result of increased utilization coupled with a continued rise in the cost of care.

We expect our health care cost trend rate to range from 5.0% to 6.5% in 2018, 5.0% to 7.0% in 2019, 5.0% to 6.5% in 2020 and grading to 4.50% by 2025. Our post-retirement benefit cost, for certain eligible legacy Qwest retirees and certain eligible legacy CenturyLink retirees, is capped at a set dollar amount. Therefore, those health care benefit obligations are not subject to increasing health care trends after the effective date of the caps.

As mentioned above, we assumed in the Level 3 acquisition certain post-retirement plans. Though largely unfunded, these post-retirement plans, in the aggregate, are immaterial to our consolidated financial statements. Due to the insignificant amount of these post-retirement plans, we have predominantly excluded them from the remaining employee benefit disclosures in this Note.

A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2017:

<table><tr><td rowspan="3"></td><td colspan="2">100 Basis
Points Change</td></tr><tr><td>Increase</td><td>(Decrease)</td></tr><tr><td colspan="2">(Dollars in millions)</td></tr><tr><td>Effect on the aggregate of the service and interest cost components of net periodic
post-retirement benefit expense (consolidated statement of operations) . . . . . . . . . .</td><td> .      $ 2</td><td>(2)</td></tr><tr><td>Effect on benefit obligation (consolidated balance sheet) . . . . . . . . . . . . . . . . . . . . . . .</td><td> .       60</td><td>(57)</td></tr></table>