Retirement and Post-Retirement Benefit Plans

3 Months Ended

Jan. 31, 2016

Retirement and Post-Retirement Benefit Plans

Retirement and Post-Retirement Benefit Plans

Note 5: Retirement and Post-Retirement Benefit Plans

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

	Three months ended January 31
	U.S. Defined Benefit Plans						Non-U.S. Defined Benefit Plans						Post- Retirement Benefit Plans
	2016			2015			2016			2015			2016			2015
	In millions
Service cost	$	—		$	—		$	12		$	68		$	—		$	1
Interest cost		136			139			6			99			5			7
Expected return on plan assets		(183	)		(217	)		(12	)		(207	)		(8	)		(9	)
Amortization and deferrals:
Actuarial loss (gain)		14			13			6			78			(3	)		(3	)
Prior service benefit		—			—			(1	)		(5	)		(4	)		(5	)
Net periodic benefit (credit) cost		(33	)		(65	)		11			33			(10	)		(9	)
Settlement loss		1			—			—			—			—			—
Special termination benefits		—			—			—			1			—			—
Plan (credit) expense allocation(1)		—			—			—			(4	)		—			8
Total periodic benefit (credit) cost from continuing operations		(32	)		(65	)		11			30			(10	)		(1	)
Summary of total periodic benefit (credit) cost:
Continuing operations		(32	)		(65	)		11			30			(10	)		(1	)
Discontinued operations		—			4			—			27			—			(8	)
Total periodic benefit (credit) cost	$	(32	)	$	(61	)	$	11		$	57		$	(10	)	$	(9	)

(1) Plan (credit) expense allocation relates to the employees of HP covered under Hewlett Packard Enterprise defined benefit pension or post-retirement benefit plans.

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.

        For fiscal 2016, HP expects to contribute approximately $18 million to its non-U.S. pension plans, $36 million to cover benefit payments to U.S. non-qualified plan participants and $43 million to cover benefit claims under HP's post-retirement benefit plans. During the three months ended January 31, 2016, HP contributed $3 million to its non-U.S. pension plans, $8 million to cover benefit payments to U.S. non-qualified plan participants, and $8 million to cover benefit claims under HP's post-retirement benefit plans.

        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 amortized over the remaining service life for active plans or the life expectancy of plan participants for frozen plans.