Substantially all of our employees are covered by one of our noncontributory pension plans. We also provide certain medical, dental, life insurance and death benefits to certain retired employees under various plans and accrue actuarially determined postretirement benefit costs. Our objective in funding these plans, in combination with the standards of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is to accumulate assets sufficient to provide benefits described in the plans to employees upon their retirement.

In 2013, we made a voluntary contribution of a preferred equity interest in AT&T Mobility II LLC, the primary holding company for our domestic wireless business, to the trust used to pay pension benefits under our qualified pension plans. The preferred equity interest had a value of $8,704 at June 30, 2016. The trust is entitled to receive cumulative cash distributions of $560 per annum, which are distributed quarterly in equal amounts and accounted for as contributions. We distributed $280 to the trust during the six months ended June 30, 2016. So long as we make the distributions, we will have no limitations on our ability to declare a dividend or repurchase shares. This preferred equity interest is a plan asset under ERISA and is recognized as such in the plan's separate financial statements. However, because the preferred equity interest is not unconditionally transferable to an unrelated party, it is not reflected in plan assets in our consolidated financial statements and instead has been eliminated in consolidation. We also agreed to make a cash contribution to the trust of $175 no later than the due date of our federal income tax return for 2015.

We recognize actuarial gains and losses on pension and postretirement plan assets in our operating results at our annual measurement date of December 31, unless earlier remeasurements are required. The following table details pension and postretirement benefit costs included in operating expenses in the accompanying consolidated statements of income. A portion of these expenses is capitalized as part of internal construction projects, providing a small reduction in the net expense recorded. Service costs and prior service credits are reported in our segment results while interest costs and expected return on plan assets are included within Corporate and Other (see Note 4).

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Pension cost:
Service cost – benefits earned during the period	$	278	$	300	$	556	$	599
Interest cost on projected benefit obligation		495		473		990		947
Expected return on assets		(780)		(826)		(1,558)		(1,652)
Amortization of prior service credit		(25)		(26)		(51)		(52)
Net pension (credit) cost	$	(32)	$	(79)	$	(63)	$	(158)

Postretirement cost:
Service cost – benefits earned during the period	$	48	$	56	$	96	$	111
Interest cost on accumulated postretirement benefit obligation		243		241		486		483
Expected return on assets		(89)		(105)		(178)		(210)
Amortization of prior service credit		(319)		(319)		(638)		(639)
Net postretirement (credit) cost	$	(117)	$	(127)	$	(234)	$	(255)

Combined net pension and postretirement (credit) cost	$	(149)	$	(206)	$	(297)	$	(413)

The decrease in the combined net pension and postretirement credit of $57 in the second quarter and $116 for the first six months of 2016 is primarily due to a lower expected return on assets resulting from a decrease in the value in the plan assets.

We also provide senior- and middle-management employees with nonqualified, unfunded supplemental retirement and savings plans. For the second quarter ended 2016 and 2015, net supplemental pension benefits costs not included in the table above were $24 and $21. For the first six months of 2016 and 2015, net supplemental pension benefit costs were $47 and $41