Benefit Plans:

Components of Net Periodic Benefit (Income) Cost

Net periodic benefit (income) cost consisted of the following:



	For the Nine Months Ended September 30,												For the Three Months Ended September 30,
	Pension						Postretirement						Pension						Postretirement
	2017			2016			2017			2016			2017			2016			2017			2016
	(in millions)
Service cost	$	57		$	55		$	12		$	12		$	19		$	18		$	3		$	4
Interest cost	216			211			57			58			72			70			17			18
Expected return on plan assets	(451		)	(416		)	—			—			(151		)	(139		)	—			—
Amortization:
Net loss	147			130			19			19			49			43			3			3
Prior service cost (credit)	3			4			(28		)	(29		)	1			2			(9		)	(10		)
Termination and curtailment	—			20			—			—			—			—			—			—
Net periodic benefit (income) cost	$	(28	)	$	4		$	60		$	60		$	(10	)	$	(6	)	$	14		$	15

Termination and curtailment costs shown in the table above relate to the productivity initiative discussed in Note 2. Asset Impairment, Exit and Implementation Costs.

In August 2017, the Board of Directors approved a voluntary, limited-time offer to approximately 8,200 former employees with vested benefits in the Altria Retirement Plan who have not commenced receiving benefit payments and who meet certain other conditions. Eligible participants can make a one-time election to receive their pension benefit as a single lump sum payment or as a monthly annuity. Eligible participants who wish to receive the lump sum payment or monthly annuity must make an election by November 3, 2017. Lump sum payments will be made in December 2017 and monthly annuity payments will begin on January 1, 2018. Payments will be made from the Altria Retirement Plan’s assets. If the lump sum acceptance rate results in settlement accounting, a one-time charge will be recorded in the fourth quarter of 2017.

Employer Contributions

Altria Group, Inc. makes contributions to the pension plans to the extent that the contributions are tax deductible and pays benefits that relate to plans for salaried employees that cannot be funded under Internal Revenue Service (“IRS”) regulations. Employer contributions of $18 million were made to Altria Group, Inc.’s pension plans during the nine months ended September 30, 2017. Altria Group, Inc. anticipates making additional employer contributions to its pension plans during the remainder of 2017 of up to $10 million, based on current tax law. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest rates.