Note 4: Retirement and Post-Retirement Benefit Plans

HP's net pension and post-retirement benefit cost (credit) recognized in the Consolidated Condensed Statements of Earnings was as follows:

	Three months ended July 31
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Post- Retirement Benefit Plans
	2015			2014			2015			2014			2015			2014
	In millions
Service cost	$	—		$	—		$	82		$	78		$	1		$	1
Interest cost		141			142			155			187			7			8
Expected return on plan assets		(197	)		(203	)		(292	)		(290	)		(10	)		(9	)
Amortization and deferrals:
Actuarial loss (gain)		13			4			107			81			(2	)		(2	)
Prior service benefit		—			—			(5	)		(6	)		(5	)		(10	)

Net periodic benefit (credit) cost		(43	)		(57	)		47			50			(9	)		(12	)
Settlement loss		96			1			—			2			—			—
Special termination benefits		—			—			9			5			1			—

Net benefit cost (credit)	$	53		$	(56	)	$	56		$	57		$	(8	)	$	(12	)

	Nine months ended July 31
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Post- Retirement Benefit Plans
	2015			2014			2015			2014			2015			2014
	In millions
Service cost	$	—		$	—		$	249		$	233		$	3		$	3
Interest cost		427			426			471			555			21			24
Expected return on plan assets		(630	)		(608	)		(884	)		(858	)		(28	)		(26	)
Amortization and deferrals:
Actuarial loss (gain)		39			12			323			239			(8	)		(7	)
Prior service benefit		—			—			(15	)		(18	)		(15	)		(30	)

Net periodic benefit (credit) cost		(164	)		(170	)		144			151			(27	)		(36	)
Curtailment gain		—			—			—			(5	)		—			—
Settlement loss		96			1			3			4			—			—
Special termination benefits		—			—			22			33			1			(11	)

Net benefit (credit) cost	$	(68	)	$	(169	)	$	169		$	183		$	(26	)	$	(47	)

Employer Contributions and Funding Policy

HP's policy is to fund its pension plans so that it makes at least the minimum contribution required by local government, funding and taxing authorities.

During the second quarter of fiscal 2015, HP lowered its initial estimates related to expected contributions in fiscal 2015 by $52 million due to favorable foreign currency exchange rates and a change in the estimated local funding requirements. As a result, HP expected its fiscal 2015 contributions to be approximately $641 million to its non-U.S. pension plans, approximately $32 million to cover benefit payments to U.S. non-qualified plan participants and approximately $43 million to cover benefit claims under HP's post-retirement benefit plans.

During the nine months ended July 31, 2015, HP contributed $575 million to its non-U.S. pension plans, paid $22 million to cover benefit payments to U.S. non-qualified plan participants, and paid $29 million to cover benefit claims under HP's post-retirement benefit plans. During the remainder of fiscal 2015, HP anticipates making additional contributions of approximately $66 million to its non-U.S. pension plans and approximately $10 million to its U.S. non-qualified plan participants and expects to pay approximately $14 million to cover benefit claims under HP's post-retirement benefit plans.

In January 2015, HP offered certain terminated vested participants of the U.S. HP Pension Plan the option of receiving their pension benefit in a one-time voluntary lump sum window. Approximately 50% of the eligible participants elected to receive their benefits and as a result the pension plan trust paid $827 million in lump sum payments to these participants during the three months ended July 31, 2015. As a result of the lump sum program, HP incurred a settlement expense of $96 million and a remeasurement of the U.S. defined benefit plans was required. As a result of the remeasurement, there was a reduction in the projected benefit obligation that was partially offset by a related decline in plan assets such that the net funded status of the plan improved by $107 million as compared to October 31, 2014. The remeasurement also resulted in an additional net periodic benefit cost of $45 million for fiscal 2015. During the three months ended July 31, 2015, HP recognized $18 million of the additional net periodic benefit cost as well as the settlement expense in Defined benefit plan settlement charges in the Consolidated Condensed Statements of Earnings.

HP's pension and other post-retirement benefit costs and obligations depend on various assumptions. Differences between expected and actual returns on investments and changes in discount rates and other actuarial assumptions are reflected as unrecognized gains or losses, and such gains or losses are amortized to earnings in future periods. A deterioration in the funded status of a plan could result in a need for additional company contributions or an increase in net pension and post-retirement benefit costs in future periods. Actuarial gains or losses are determined at the measurement date and are amortized over the remaining service life for active plans or the life expectancy of plan participants for frozen plans.