8. Retirement-Related Benefits: The company offers defined benefit pension plans, defined contribution pension plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. The following table provides the pre-tax cost for all retirement-related plans.

					Yr. to Yr.
(Dollars in millions)					Percent
For the three months ended March 31:	2017		2016		Change
Retirement-related plans — cost
Defined benefit and contribution pension plans — cost	$	664	$	439	51.3	%
Nonpension postretirement plans — cost	61		60		2.3

Total	$	725	$	499	45.4	%

The following table provides the components of the cost/(income) for the company’s pension plans.

Cost/(Income) of Pension Plans

(Dollars in millions)	U.S. Plans						Non-U.S. Plans
For the three months ended March 31:	2017			2016			2017			2016
Service cost	$	—		$	—		$	101		$	104
Interest cost	479			513			201			262
Expected return on plan assets	(754		)	(922		)	(317		)	(470		)
Amortization of prior service costs/(credits)	4			3			(24		)	(25		)
Recognized actuarial losses	337			333			361			347
Curtailments and settlements	—			—			(1		)	5
Multi-employer plans/other costs	—			—			14			18

Total net periodic pension (income)/cost of defined benefit plans	67			(74		)	335			241
Cost of defined contribution plans	162			165			101			106

Total defined benefit and contribution plans cost recognized in the Consolidated Statement of Earnings	$	228		$	91		$	436		$	348

In March 2017, the company initiated a change to the investment strategy of its U.S. defined benefit plan. The 2017 target asset allocation was modified by reducing equity securities from 20 percent to 12 percent, increasing debt securities from 70 percent to 79 percent and other investments largely remained unchanged at 10 percent of total plan assets. This change is designed to reduce the risk associated with the potential negative impact that equity markets might have on the funded status of the U.S. defined benefit plan. The change is expected to reduce the 2018 expected long-term rate of return on assets from 5.75 percent to approximately 5.25 percent. See note S, “Retirement-Related Benefits,” on page 144 in the company’s 2016 Annual Report for additional information regarding the company’s investment strategy.

In 2017, the company expects to contribute approximately $500 million to its non-U.S. defined benefit and multi-employer plans, the largest of which will be contributed to the defined benefit pension plans in Japan, Spain and the UK. This amount generally represents the legally mandated minimum contribution. Total contributions to the non-U.S. plans in the first three months of 2017 were $182 million, of which $40 million was in cash and $142 million in U.S. Treasury securities. Total net contributions to the non-U.S. plans in the first three months of 2016 were $107 million, of which $65 million was in cash and $42 million in U.S. Treasury securities. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.

The following table provides the components of the cost/(income) for the company’s nonpension postretirement plans.

Cost of Nonpension Postretirement Plans

(Dollars in millions)	U.S. Plan						Non-U.S. Plans
For the three months ended March 31:	2017			2016			2017			2016
Service cost	$	4		$	5		$	1		$	1
Interest cost	38			41			14			10
Expected return on plan assets	—			—			(2		)	(1		)
Amortization of prior service costs/(credits)	(2		)	(2		)	0			(1		)
Recognized actuarial losses	5			5			2			2
Curtailments and settlements	—			—			0			—

Total nonpension postretirement plan cost recognized in Consolidated Statement of Earnings	$	46		$	49		$	16		$	11

The company contributed $135 million to the U.S. nonpension postretirement benefit plan in U.S. Treasury securities during the three months ended March 31, 2017, and $100 million in U.S. Treasury securities during the three months ended March 31, 2016. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.