PENSION AND OTHER POSTRETIREMENT BENEFITS

6 Months Ended

May 03, 2020

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

(8)  Pension and Other Postretirement Benefits

The Company has several defined benefit pension plans and postretirement benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries.

The worldwide components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	May 3		April 28		May 3		April 28
	2020		2019		2020		2019
Service cost	$	77	$	66	$	161	$	132
Interest cost		87		111		174		222
Expected return on plan assets		(204)		(200)		(409)		(400)
Amortization of actuarial loss		62		36		124		71
Amortization of prior service cost		3		3		6		6
Settlements		3				6
Net cost	$	28	$	16	$	62	$	31

The worldwide components of net periodic OPEB cost consisted of the following in millions of dollars:

	Three Months Ended				Six Months Ended
	May 3		April 28		May 3		April 28
	2020		2019		2020		2019
Service cost	$	12	$	10	$	24	$	20
Interest cost		35		53		72		107
Expected return on plan assets		(12)		(9)		(24)		(18)
Amortization of actuarial loss		7		3		14		8
Amortization of prior service credit		(1)		(18)		(2)		(36)
Curtailments						21
Net cost	$	41	$	39	$	105	$	81

The components of net periodic pension and OPEB costs excluding the service cost component are included in the line item “Other operating expenses” in the statement of consolidated income.

In the first quarter of 2020, the Company remeasured the U.S. OPEB health care plans. The wage plan was remeasured due to the U.S. enactment of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) that repealed the health insurance provider fee effective in 2021. The salary plans were remeasured due to the U.S. voluntary employee-separation program (see Note 20), which resulted in a $21 million curtailment loss. The combined effect of the remeasurements was to reduce the benefit obligation by $245 million.

During the first six months of 2020, the Company contributed approximately $42 million to its pension plans and $66 million to its OPEB plans. The Company presently anticipates contributing an additional $50 million to its pension plans and $69 million to its OPEB plans during the remainder of fiscal year 2020. These contributions primarily include direct benefit payments from Company funds.