RETIREMENT BENEFITS

BMS sponsors defined benefit pension plans, defined contribution plans and termination indemnity plans for regular full-time employees. The principal defined benefit pension plan is the Bristol-Myers Squibb Retirement Income Plan (the Plan), covering most U.S. employees and representing approximately 66% of the consolidated pension plan assets and 60% of the obligations. Future benefits related to service for this plan were eliminated in 2009. BMS contributes at least the minimum amount required by the ERISA. Plan benefits are based primarily on the participant’s years of credited service and final average compensation. As of March 31, 2019, Plan assets consist primarily of fixed-income securities.

In December 2018, BMS announced plans to fully terminate the Plan. Pension obligations related to the Plan of $3.7 billion will be distributed through a combination of lump sum payments to eligible Plan participants who elect such payments and through the purchase of a group annuity contract from Athene Annuity and Life Company (Athene), a wholly-owned insurance subsidiary of Athene Holding Ltd. The benefit obligation for the Plan as of March 31, 2019 was therefore determined on a plan termination basis for which it is assumed that a portion of eligible active and deferred vested participants will elect lump sum payments. The remaining obligation expected to be transferred to Athene includes an annuity purchase price premium. The Plan has sufficient assets to satisfy all transaction obligations. The transaction is expected to close in the third quarter of 2019 at which time the Company expects to record a total non-cash pre-tax pension settlement charge of approximately $1.5 billion to $2.0 billion.

The net periodic benefit cost/(credit) of defined benefit pension plans includes:



	Three Months Ended March 31,
Dollars in Millions	2019			2018
Service cost – benefits earned during the year	$	7		$	7
Interest cost on projected benefit obligation	44			46
Expected return on plan assets	(64		)	(109		)
Amortization of prior service credits	(1		)	(1		)
Amortization of net actuarial loss	18			21
Curtailments and settlements	49			31
Net periodic pension benefit cost/(credit)	$	53		$	(5	)

Pension settlement charges were recognized after determining that the annual lump sum payments will likely exceed the annual interest and service costs for the primary and certain other U.S. and international pension plans. The charges included the acceleration of a portion of unrecognized actuarial losses. Non-current pension liabilities were $423 million at March 31, 2019 and $427 million at December 31, 2018. Defined contribution plan expense in the U.S. was approximately $40 million for the three months ended March 31, 2019 and 2018. Comprehensive medical and group life benefits are provided for substantially all U.S. retirees electing to participate in comprehensive medical and group life plans and to a lesser extent certain benefits for non-U.S. employees. The net periodic benefit credits were not material in both periods.