Note G – Employee and Retiree Benefit Plans

The Company has defined benefit pension plans that are principally noncontributory and cover most full-time employees. All pension plans are funded except for the U.S. and Canadian nonqualified supplemental plans and the U.S. directors’ plan. All U.S. tax qualified plans meet the funding requirements of federal laws and regulations. Contributions to foreign plans are based on local laws and tax regulations. The Company also sponsors health care and life insurance benefit plans, which are not funded, that cover most active and retired U.S. employees. Additionally, most U.S. retired employees are covered by a life insurance benefit plan. The health care benefits are contributory; the life insurance benefits are noncontributory.

Effective with the spin-off of Murphy’s former U.S. retail marketing operation, Murphy USA Inc. (MUSA) on August 30, 2013, significant modifications were made to the U.S. defined benefit pension plan. Certain Murphy employees’ benefits under the U.S. plan were frozen at that time. No further benefit service will accrue for the affected employees; however, the plan will recognize future eligible earnings after the spin-off date. In addition, all previously unvested benefits became fully vested at the spin-off date. For those affected active employees of the Company, additional U.S. retirement plan benefits will accrue in future periods under a cash balance formula. Employees hired after August 30, 2013 will only accrue plan benefits under the cash balance formula. Upon the spin-off of MUSA, Murphy retained all vested pension defined benefit and other postretirement benefit obligations

Note G – Employee and Retiree Benefit Plans (Contd.)

associated with current and former employees of this separated business. No additional benefit will accrue for any employees of MUSA under the Company’s retirement plan after the spin-off date.

The table that follows provides the components of net periodic benefit expense for the three-month and

nine-month periods ended September 30, 2014 and 2013.



	Three Months Ended September 30,
	Pension Benefits				Other Postretirement Benefits
(Thousands of dollars)		2014		2013	2014		2013
Service cost	$	6,208		7,252		672		1,232
Interest cost		8,239		8,450		1,278		1,352
Expected return on plan assets		(8,506)		(8,257)		–		–
Amortization of prior service cost		227		262		(20)		(35)
Amortization of transitional asset		208		125		1		2
Recognized actuarial loss		1,735		4,591		59		391
Special termination benefits		–		849		–		–
Curtailments		–		1,366		–		(443)
Net periodic benefit expense	$	8,111		14,638		1,990		2,499

	Nine Months Ended September 30,
	Pension Benefits				Other Postretirement Benefits
(Thousands of dollars)	2014		2013		2014		2013
Service cost	$	19,048		21,949		2,016		3,629
Interest cost		24,707		22,581		3,833		3,865
Expected return on plan assets		(25,514)		(21,526)		–		–
Amortization of prior service cost		680		841		(61)		(121)
Amortization of transitional asset		628		366		4		6
Recognized actuarial loss		5,201		12,882		177		1,321
Special termination benefits		–		849		–		–
Curtailments		–		1,366		–		(443)
Net periodic benefit expense	$	24,750		39,308		5,969		8,257

During the nine-month period ended September 30, 2014, the Company made contributions of $42.2 million to its defined benefit pension and postretirement benefit plans. Remaining funding in 2014 for the Company’s defined benefit pension and postretirement plans is anticipated to be $9.7 million.