Employee Benefits

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

Employee Benefits

We have a number of defined benefit pension plans and defined contribution plans covering substantially all employees. Our primary pension plan is a noncontributory plan under which benefits are based on employee career employment compensation. In December 2011, our Board of Directors approved a plan amendment that froze our U.S. Employee Retirement Plan (“U.S. ERP”) effective on April 1, 2012. Our U.S. ERP is a defined benefit plan. Under the amendment, no new employees will be permitted to enter the U.S. ERP and no additional benefits for current participants for future services will be accrued. This amendment decreased our pension benefit liabilities by $129 million as of December 31, 2011, and resulted in an after-tax decrease in accumulated other comprehensive loss of $82 million. We also recorded an immaterial amount of pension plan curtailment expense in 2011 as a result of the plan amendment.

We also have unfunded non-U.S. benefit plans and supplemental benefit plans. The supplemental benefit plans provide senior management with supplemental retirement, disability and death benefits. Certain supplemental retirement benefits are based on final monthly earnings. In addition, we sponsor voluntary 401(k) plans under which we may match employee contributions up to certain levels of compensation as well as profit-sharing plans under which we contribute a percentage of eligible employees’ compensation to the employees’ accounts.

We also provide certain medical, dental and life insurance benefits for retired employees and eligible dependents. The medical and dental plans are contributory, while the life insurance plan is noncontributory. We currently do not prefund any of these plans.

The components of net periodic benefit cost for our retirement plans and post-retirement plans for the periods ended September 30 are as follows:

(in millions)	Three Months						Nine Months
	2012			2011			2012			2011
Retirement Plans
Service cost	$	3		$	16		$	21		$	50
Interest cost	24			25			70			75
Expected return on plan assets	(31		)	(32		)	(93		)	(96		)
Amortization of actuarial loss	8			8			24			23
Net periodic benefit cost	$	4		$	17		$	22		$	52
Post-Retirement Plans
Service cost	$	1		$	1		$	2		$	2
Interest cost	1			2			4			5
Amortization of prior service credit	—			(1		)	(1		)	(1		)
Net periodic benefit cost	$	2		$	2		$	5		$	6

For the three and nine months ended September 30, 2012, our United Kingdom retirement plan accounted for $1 million and $3 million, respectively, of the net periodic benefit cost attributable to the funded plans. For the three and nine months ended September 30, 2011, our United Kingdom retirement plan accounted for $1 million and $2 million, respectively, of the net periodic benefit cost attributable to the funded plans.

As discussed in our Annual Report, we changed certain discount rate assumptions on our retirement and post-retirement plans and our expected return on assets assumption for our retirement plans, which became effective on January 1, 2012. The effect of the assumption changes on retirement and post-retirement expense for the three and nine months ended September 30, 2012 did not have a material impact to our financial position, results of operations or cash flows.

In the first nine months of 2012, we contributed $36 million to our retirement plans and expect to make additional required contributions of approximately $8 million to our retirement plans during the remainder of the year. We may elect to make additional non-required contributions depending on investment performance and the pension plan status in the fourth quarter of 2012.