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 tables provide the pre-tax cost for all retirement-related plans.

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

(1)	These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.


(Dollars in millions)	U.S. Plans				Non-U.S. Plans
For the six months ended June 30:	2019		2018		2019		2018
Service cost	$	—	$	—	$	185	$	205
Interest cost⁽¹⁾		941		859		413		426
Expected return on plan assets⁽¹⁾		(1,300)		(1,351)		(795)		(687)
Amortization of prior service costs/(credits)⁽¹⁾		8		8		(13)		(42)
Recognized actuarial losses⁽¹⁾		279		763		626		712
Curtailments and settlements⁽¹⁾		—		—		4		6
Multi-employer plans		—		—		17		20
Other costs/(credits)⁽¹⁾		—		—		11		11
Total net periodic pension (income)/cost of defined benefit plans	$	(71)	$	279	$	449	$	651
Cost of defined contribution plans		289		305		212		211
Total defined benefit and contribution pension plans cost recognized in the Consolidated Statement of Earnings	$	218	$	584	$	661	$	863

(1)	These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

As of 2019, substantially all the plan participants in the U.S. Qualified IBM Personal Pension Plan (PPP) are considered inactive. As required by U.S. GAAP, this resulted in a change in the amortization period of unrecognized actuarial losses to the average remaining life expectancy of inactive plan participants, which was 18 years as of December 31, 2018. Recognized actuarial losses decreased by approximately $240 million and $480 million for the three and six months ended June 30, 2019, respectively, compared to the corresponding periods in the prior year, primarily driven by the change in amortization period. There was no impact to funded status, retiree benefit payments or funding requirements of the U.S. Qualified PPP as a result of this change.

In 2019, the company expects to contribute approximately $400 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 Belgium. This amount generally represents the legally mandated minimum contribution. Total net contributions to the non-U.S. plans in the first six months of 2019 were $128 million, of which $63 million was in cash and $65 million in U.S. Treasury securities. Total contributions to the non-U.S. plans in the first six months of 2018 were $237 million, of which $80 million was in cash and $157 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 tables provide the components of the cost 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 June 30:	2019		2018		2019		2018
Service cost	$	3	$	3	$	1	$	1
Interest cost⁽¹⁾		36		33		12		11
Expected return on plan assets⁽¹⁾		—		—		(1)		(1)
Amortization of prior service costs/(credits)⁽¹⁾		(1)		(2)		0		0
Recognized actuarial losses⁽¹⁾		0		2		3		1
Curtailments and settlements⁽¹⁾		—		—		—		0
Total nonpension postretirement plans cost recognized in Consolidated Statement of Earnings	$	38	$	37	$	15	$	12

(1)	These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.


(Dollars in millions)	U.S. Plan				Non-U.S. Plans
For the six months ended June 30:	2019		2018		2019		2018
Service cost	$	5	$	6	$	3	$	3
Interest cost⁽¹⁾		73		66		25		24
Expected return on plan assets⁽¹⁾		—		—		(3)		(3)
Amortization of prior service costs/(credits)⁽¹⁾		(1)		(4)		0		0
Recognized actuarial losses⁽¹⁾		0		5		5		3
Curtailments and settlements⁽¹⁾		—		—		0		0
Total nonpension postretirement plans cost recognized in Consolidated Statement of Earnings	$	77	$	74	$	30	$	26

(1)	These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

The company contributed $292 million in U.S. Treasury securities to the U.S. nonpension postretirement benefit and active employee medical trusts during the six months ended June 30, 2019, and $215 million in U.S. Treasury securities during the six months ended June 30, 2018. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.