Employee Retirement Benefits

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Retirement Benefits

Employee Retirement Benefits

Effective December 31, 2014, the Company amended the Hertz Corporation Account Balance Defined Benefit Pension Plan to permanently discontinue future benefit accruals and participation under the plan for non-union employees. While compensation credits are no longer provided under the plan, interest credits continue to be credited on existing participant account balances under the plan until benefits are distributed, and service continues to be recognized for vesting and retirement eligibility requirements.

Employee Matters Agreement

As described in Note 3, "Discontinued Operations," Hertz Global and Herc Holdings entered into the “Employee Matters Agreement” to allocate liabilities and responsibilities relating to employment matters, employee compensation, benefit plans and programs and other related matters in connection with the Spin-Off of the equipment rental business. The Employee Matters Agreement governs Hertz Global's and Herc Holdings’ obligations with respect to such matters for current and former employees of the vehicle rental business and the equipment rental business. The Employee Matters Agreement specifies the method by which the pension plans are split in connection with the Spin-Off. Pension liabilities and an associated asset allocation related to employees of the equipment rental business will be transferred to a new plan. Amounts presented herein relate to pension expense associated with current and former employees of the vehicle rental business.

On June 30, 2016, in connection with the Spin-Off and transfer of assets and liabilities from combined U.S. pension and other post-retirement benefit plans to newly created Herc Holdings plans, the Company remeasured pension and other post-retirement liabilities and assets for several of its U.S. plans.  The remeasurement resulted in an increase to the Company's continuing operations net pension liability of $23 million compared to the net pension liability as of December 31, 2015.  The significant weighted-average assumptions used at the June 30, 2016 measurement date were as follows.

Discount rate	3.5%
Expected rate of return on plan assets	7.2%
Average salary increase	4.3%

The following table sets forth the net periodic pension expense:

	Pension Benefits
	U.S.						Non-U.S.
	Three Months Ended September 30,
(In millions)	2016			2015			2016			2015
Components of Net Periodic Benefit Cost:
Service cost	$	1		$	1		$	—		$	—
Interest cost	5			5			2			3
Expected return on plan assets	(7		)	(9		)	(3		)	(3		)
Net amortizations	2			—			—			—
Settlement loss	—			1			—			2
Net periodic pension expense (benefit)	$	1		$	(2	)	$	(1	)	$	2

	Pension Benefits
	U.S.						Non-U.S.
	Nine Months Ended September 30,
(In millions)	2016			2015			2016			2015
Components of Net Periodic Benefit Cost:
Service cost	$	2		$	3		$	1		$	1
Interest cost	16			16			6			7
Expected return on plan assets	(21		)	(25		)	(9		)	(11		)
Net amortizations	6			2			—			1
Settlement loss	1			3			—			2
Net periodic pension expense (benefit)	$	4		$	(1	)	$	(2	)	$	—