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 nine months ended September 30:	2019		2018		2019		2018
Service cost	$	—	$	—	$	279	$	309
Interest cost (1)		1,411		1,289		616		630
Expected return on plan assets (1)		(1,949)		(2,026)		(1,186)		(1,017)
Amortization of prior service costs/(credits) (1)		12		12		(20)		(62)
Recognized actuarial losses (1)		419		1,144		939		1,057
Curtailments and settlements (1)		—		—		7		7
Multi-employer plans		—		—		26		29
Other costs/(credits) (1)		—		—		22		16
Total net periodic pension (income)/cost of defined benefit plans	$	(107)	$	419	$	683	$	969
Cost of defined contribution plans		440		457		321		306
Total defined benefit and contribution pension plans cost recognized in the Consolidated Statement of Earnings	$	333	$	876	$	1,004	$	1,276

(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 $242 million and $725 million for the three and nine months ended September 30, 2019, respectively, compared to the corresponding periods in the prior year, primarily driven by the change in the 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 $300 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 nine months of 2019 were $159 million, of which $95 million was in cash and $65 million in U.S. Treasury securities. Total contributions to the non-U.S. plans in the first nine months of 2018 were $275 million, of which $117 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 September 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 nine months ended September 30:	2019		2018		2019		2018
Service cost	$	8	$	10	$	4	$	4
Interest cost (1)		109		99		37		34
Expected return on plan assets (1)		—		—		(4)		(4)
Amortization of prior service costs/(credits) (1)		(2)		(6)		0		0
Recognized actuarial losses (1)		0		7		8		4
Curtailments and settlements (1)		—		—		0		0
Total nonpension postretirement plans cost recognized in Consolidated Statement of Earnings	$	115	$	111	$	45	$	38

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

The company contributed $357 million in U.S. Treasury securities to the U.S. nonpension postretirement benefit and active employee medical trusts during the nine months ended September 30, 2019, and $275 million in U.S. Treasury securities during the nine months ended September 30, 2018. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.