Note 11 — Retirement Benefits

Defined Benefit Plans and Post-retirement Welfare Plans

Willis Towers Watson sponsors both qualified and non-qualified defined benefit pension plans and other post-retirement welfare (‘PRW’) plans throughout the world. The majority of our plan assets and obligations are in the U.S. and the U.K. We have also included disclosures related to defined benefit plans in certain other countries, including Canada, France, Germany, Ireland and the Netherlands. Together, these disclosed funded and unfunded plans represent 99% of Willis Towers Watson’s pension and PRW obligations and are disclosed herein.

Components of Net Periodic Benefit (Income)/Cost for Defined Benefit Pension and Post-retirement Welfare Plans

The following tables set forth the components of net periodic benefit (income)/cost for the Company’s defined benefit pension and PRW plans for the three and nine months ended September 30, 2018 and 2017:

	Three Months Ended September 30,
	2018											2017
	U.S.			U.K.			Other			PRW		U.S.			U.K.			Other			PRW
Service cost	$	17		$	4		$	6		$	—	$	16		$	8		$	6		$	—
Interest cost		35			24			4			1		34			23			4			1
Expected return on plan assets		(68	)		(72	)		(8	)		—		(61	)		(72	)		(7	)		—
Settlement		—			12			(14	)		—		1			—			—			—
Amortization of net loss		3			10			—			1		4			13			—			—
Amortization of prior service credit		—			(4	)		—			—		—			(4	)		—			—
Net periodic benefit (income)/cost	$	(13	)	$	(26	)	$	(12	)	$	2	$	(6	)	$	(32	)	$	3		$	1

	Nine Months Ended September 30,
	2018											2017
	U.S.			U.K.			Other			PRW		U.S.			U.K.			Other			PRW
Service cost	$	50		$	14		$	16		$	—	$	49		$	23		$	15		$	—
Interest cost		105			72			13			3		104			69			13			3
Expected return on plan assets		(205	)		(227	)		(23	)		—		(184	)		(211	)		(22	)		—
Settlement		—			32			(14	)		—		1			—			—			—
Amortization of net loss		9			34			1			1		10			39			1			—
Amortization of prior service credit		—			(14	)		—			—		—			(13	)		—			—
Net periodic benefit (income)/cost	$	(41	)	$	(89	)	$	(7	)	$	4	$	(20	)	$	(93	)	$	7		$	3

As a result of adopting ASU 2017-07, within the condensed consolidated statements of comprehensive income, service cost is included within salaries and benefits expense. The remainder of the components of net periodic benefit income of $77 million and $217 million for the three and nine months ended September 30, 2018, respectively, and $67 million and $192 million for the three and nine months ended September 30, 2017, respectively, are included within other income, net. These reclassifications include amounts for those plans which are immaterial for disclosure.

During the third quarter of 2018, the Company terminated its Netherlands-based defined benefit plan, resulting in a non-cash settlement gain of $16 million, which the Company recognized during the three and nine months ended September 30, 2018.

During the second quarter of 2018, as a result of past changes in U.K. legislation and the low interest rate environment, the Company determined that the amount of transfer payments from the Legacy Willis U.K. pension plan would exceed the plan’s service and interest cost for the full year 2018. This triggers settlement accounting, which requires immediate recognition of a portion of the obligations associated with the plan transfers. Consequently, the Company recognized a non-cash expense of $12 million for the three months ended September 30, 2018, and has recognized a non-cash expense of $32 million pertaining to the U.K.-based pension settlements for the nine months ended September 30, 2018.

Employer Contributions to Defined Benefit Pension Plans

The Company made $50 million of contributions to its U.S. plans for the nine months ended September 30, 2018 and anticipates making no additional contributions over the remainder of the fiscal year. The Company made contributions of $61 million to its U.K. plans for the nine months ended September 30, 2018 and anticipates making additional contributions of $23 million for the remainder of the fiscal year. The Company made contributions of $11 million to its other plans for the nine months ended September 30, 2018 and anticipates making additional contributions of $3 million for the remainder of the fiscal year.

Defined Contribution Plans

The Company made contributions to its defined contribution plans of $28 million and $117 million during the three and nine months ended September 30, 2018, respectively, and $39 million and $118 million during the three and nine months ended September 30, 2017, respectively.