EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS

9 Months Ended

Sep. 30, 2023

EMPLOYEE BENEFIT PLANS AND POSTRETIREMENT BENEFITS

The following table summarizes the components of net periodic benefit cost of CNH Industrial’s defined benefit pension plans and postretirement health and life insurance plans for the three and nine months ended September 30, 2023 and 2022 (in millions of dollars):


	Pension				Healthcare				Other
	Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Service cost	$	3	$	2	$	1	$	1	$	2	$	1
Interest cost	14		6		3		2		1		1
Expected return on assets	(12)		(11)		(2)		(1)		—		—
Amortization of:
Prior service credit	—		—		(9)		(31)		—		—
Actuarial loss (gain)	4		4		—		1		(1)		—
Net periodic benefit cost	$	9	$	1	$	(7)	$	(28)	$	2	$	2


	Pension				Healthcare				Other
	Nine Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022		2023		2022
Service cost	$	7	$	8	$	2	$	3	$	4	$	4
Interest cost	41		20		7		5		3		1
Expected return on assets	(34)		(35)		(3)		(4)		—		—
Amortization of:
Prior service credit	—		—		(27)		(94)		—		—
Actuarial loss (gain)	13		14		—		2		(1)		—
Net periodic benefit cost	$	27	$	7	$	(21)	$	(88)	$	6	$	5

On February 20, 2018, CNH Industrial announced that the United States Supreme Court ruled in its favor in Reese vs. CNH Industrial N.V. and CNH Industrial America LLC. The decision allowed CNH Industrial to terminate or modify various retiree healthcare benefits previously provided to certain UAW Union represented Company retirees. On April 16, 2018, CNH Industrial announced its determination to modify the benefits provided to the applicable retirees (“Benefit Modification”) to make them consistent with the benefits provided to current eligible CNH Industrial retirees who had been represented by the UAW. The Benefit Modification resulted in a reduction of the plan liability of $527 million. This amount was amortized from Other Comprehensive Income ("OCI") to the income statement over approximately 4.5 years, which represents the average service period to attain eligibility conditions for active participants. The amount was completely amortized as of December 31, 2022. For the three and nine months ended September 30, 2022, $30 million and $90 million of amortization (“Benefit Modification Amortization”) was recorded as a pre-tax gain in Other, net, respectively.

In 2021, CNH Industrial communicated plan changes for the U.S. retiree medical plan. The plan changes resulted in a reduction of the plan liability of $100 million. This amount will be amortized from OCI to the income statement over approximately 4 years, which represents the average service period to attain eligibility conditions for active participants. For the three and nine months ended September 30, 2023 and 2022, $6 million and $18 million of amortization was recorded as a pre-tax gain in Other, net, respectively.