Pension, Savings and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

PENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS

ENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS

We provide employees with defined benefit pension or defined contribution savings plans.

Defined benefit pension cost follows:

	U.S.						U.S.
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2016			2015			2016			2015
Service cost — benefits earned during the period	$	1		$	1		$	2		$	2
Interest cost on projected benefit obligation	40			60			82			121
Expected return on plan assets	(63		)	(75		)	(127		)	(150		)
Amortization of net losses	27			26			54			54
Net periodic pension cost	$	5		$	12		$	11		$	27

	Non-U.S.						Non-U.S.
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2016			2015			2016			2015
Service cost — benefits earned during the period	$	8		$	13		$	15		$	22
Interest cost on projected benefit obligation	21			28			41			57
Expected return on plan assets	(24		)	(27		)	(46		)	(53		)
Amortization of net losses	7			10			14			19
Net periodic pension cost	12			24			24			45
Net curtailments/settlements/termination benefits	13			1			13			1
Total defined benefit pension cost	$	25		$	25		$	37		$	46

Effective January 1, 2016, we changed the method of estimating the service and interest components of net periodic cost for pension and other postretirement benefits for plans that utilize a yield curve approach. We elected to utilize a full yield curve approach in the measurement of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows, as opposed to using a single weighted average discount rate. We believe this approach provides a more precise measurement of service and interest costs by aligning the timing of projected benefit cash flows to the corresponding spot rates on the yield curve. This change is expected to reduce our 2016 annual net periodic pension cost by approximately $50 million to $75 million compared to the previous method and does not affect the measurement of our plan benefit obligations. We have accounted for this change as a change in accounting estimate.

During the second quarter of 2016, annuities were purchased from existing plan assets to settle $41 million in obligations of one of our U.K. pension plans which resulted in a settlement charge of $14 million.

We expect to contribute approximately $50 million to $75 million to our funded non-U.S. pension plans in 2016. For the three and six months ended June 30, 2016, we contributed $14 million and $31 million, respectively, to our non-U.S. plans.

The expense recognized for our contributions to defined contribution savings plans for the three months ended June 30, 2016 and 2015 was $29 million and $31 million, respectively, and $63 million and $64 million, respectively, for the six months ended June 30, 2016 and 2015.

We also provide certain U.S. employees and employees at certain non-U.S. subsidiaries with health care benefits or life insurance benefits upon retirement. Other postretirement benefits credit for the three months ended June 30, 2016 and 2015 was $(7) million and $(6) million, respectively, and $(13) million and $(10) million for the six months ended June 30, 2016 and 2015, respectively.