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RETIREMENT BENEFITS
 9 Months Ended
Sep. 30, 2014
Compensation and Retirement Disclosure [Abstract]  
RETIREMENT BENEFITS
RETIREMENT BENEFITS

For additional information on Citi’s retirement benefits, see Note 8 to the Consolidated Financial Statements in the Company’s 2013 Annual Report on Form 10-K.

Pension and Postretirement Plans
The Company has several noncontributory defined benefit pension plans covering certain U.S. employees and has various defined benefit pension and termination indemnity plans covering employees outside the United States.
The U.S. qualified defined benefit plan was frozen effective January 1, 2008 for most employees. Accordingly, no additional compensation-based contributions were credited to the cash balance portion of the plan for existing plan participants after 2007. However, certain employees covered under the prior final pay plan formula continue to accrue benefits. The Company also offers postretirement health care and life insurance benefits to certain eligible U.S. retired employees, as well as to certain eligible employees outside the United States.
The Company also sponsors a number of noncontributory, nonqualified pension plans. These plans, which are unfunded, provide supplemental defined pension benefits to certain U.S. employees. With the exception of certain employees covered under the prior final pay plan formula, the benefits under these plans were frozen in prior years.
In the second quarter of 2013, the Company changed the method of accounting for its most significant pension and postretirement benefit plans (Significant Plans) such that plan obligations, plan assets and periodic plan expense are remeasured and disclosed quarterly, instead of annually. The Significant Plans captured approximately 80% of the Company’s global pension and postretirement plan obligations as of December 31, 2013. All other plans (All Other Plans) are remeasured annually with a December 31 measurement date. For additional information, see Note 1 to the Consolidated Financial Statements in the Company’s 2013 Annual Report on Form 10-K.

Net (Benefit) Expense
The following table summarizes the components of net (benefit) expense recognized in the Consolidated Statement of Income for the Company’s U.S. qualified and nonqualified pension plans, postretirement plans and plans outside the United States, for Significant Plans and All Other Plans, for the periods indicated.

 
Three Months Ended September 30,
 
Pension plans
 
Postretirement benefit plans
 
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
In millions of dollars
2014
2013
 
2014
2013
 
2014
2013
 
2014
2013
Qualified plans
 

 

 
 

 

 
 

 

 
 

 

Benefits earned during the period
$
1

$
—

 
$
43

$
51

 
$
—

$
—

 
$
4

$
6

Interest cost on benefit obligation
132

140

 
93

95

 
8

8

 
30

31

Expected return on plan assets
(220
)
(216
)
 
(98
)
(93
)
 
—

1

 
(31
)
(29
)
Amortization of unrecognized
 

 

 
 

 

 
 

 

 
 

 

Prior service (benefit) cost
(1
)
(1
)
 
—

2

 
—

(1
)
 
(3
)
—

Net actuarial loss
29

23

 
20

24

 
—

—

 
10

9

Curtailment loss (1)
11

17

 
(5
)
—

 
—

—

 
—

—

Settlement (gain) loss (1)
—

—

 
26

—

 
—

—

 
—

—

Special termination benefits (1)
—

—

 
8

1

 
—

—

 
—

—

Net qualified plans (benefit) expense
$
(48
)
$
(37
)

$
87

$
80


$
8

$
8


$
10

$
17

Nonqualified plans expense
$
10

$
10

 
$
—

$
—

 
$
—

$
—

 
$
—

$
—

Total net (benefit) expense
$
(38
)
$
(27
)
 
$
87

$
80

 
$
8

$
8

 
$
10

$
17

(1)
Losses due to curtailment, settlement and special termination benefits relate to repositioning actions in the U.S. and certain countries outside the U.S.

 
Nine Months Ended September 30,
 
Pension plans
 
Postretirement benefit plans
 
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
In millions of dollars
2014
2013
 
2014
2013
 
2014
2013
 
2014
2013
Qualified plans
 

 

 
 

 

 
 

 

 
 

 

Benefits earned during the period
$
4

$
6

 
$
136

$
158

 
$
—

$
—

 
$
11

$
31

Interest cost on benefit obligation
410

398

 
287

287

 
25

25

 
90

107

Expected return on plan assets
(656
)
(645
)
 
(291
)
(298
)
 
(1
)
(1
)
 
(92
)
(101
)
Amortization of unrecognized
 

 

 
 
 

 
 

 

 
 
 

Prior service (benefit) cost
(3
)
(3
)
 
2

4

 
—

(1
)
 
(9
)
—

Net actuarial loss
78

82

 
60

70

 
—

—

 
30

31

Curtailment loss (1)
11

17

 
12

—

 
—

—

 
—

—

Settlement (gain) loss (1)
—

—

 
39

—

 
—

—

 
(2
)
—

Special termination benefits (1)
—

—

 
8

1

 
—

—

 
—

—

Net qualified plans (benefit) expense
$
(156
)
$
(145
)
 
$
253

$
222

 
$
24

$
23

 
$
28

$
68

Nonqualified plans expense
$
34

$
34

 
$
—

$
—

 
$
—

$
—

 
$
—

$
—

Total net (benefit) expense
$
(122
)
$
(111
)
 
$
253

$
222

 
$
24

$
23

 
$
28

$
68

Cumulative effect of change in
—

(23
)
 
—

—

 
—

—

 
—

3

accounting policy(2)
 
 
 
 
 
 
 
 
 
 
 
Total adjusted net (benefit) expense
$
(122
)
$
(134
)
 
$
253

$
222

 
$
24

$
23

 
$
28

$
71

(1)
Losses due to curtailment, settlement and special termination benefits relate to repositioning actions in the U.S. and certain countries outside the U.S.
(2)
See Note 1 to the Consolidated Financial Statements in the Company’s 2013 Annual Report on Form 10-K for additional information on the change in accounting policy.

Funded Status and Accumulated Other Comprehensive Income
The following table summarizes the funded status and amounts recognized in the Consolidated Balance Sheet for the Company’s Significant Plans.

Net Amount Recognized
 
Nine months ended September 30, 2014
 
Pension plans
 
Postretirement benefit plans
In millions of dollars
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
Change in projected benefit obligation
 

 
 

 
 

 
 

Projected benefit obligation at beginning of year
$
12,829

 
$
7,194

 
$
780

 
$
1,411

Plans measured annually
(692
)
 
(3,473
)
 
—

 
(357
)
Projected benefit obligation at beginning of year - Significant Plans
$
12,137

 
$
3,721

 
$
780

 
$
1,054

First quarter activity
215

 
69

 
1

 
56

Second quarter activity
350

 
191

 
62

 
106

Projected benefit obligation at June 30, 2014 - Significant Plans
$
12,702

 
$
3,981

 
$
843

 
$
1,216

Benefits earned during the period
1

 
10

 
—

 
3

Interest cost on benefit obligation
132

 
56

 
8

 
24

Actuarial (gain) loss
—

 
13

 
1

 
(43
)
Benefits paid, net of participants’ contributions
(177
)
 
(44
)
 
(21
)
 
(14
)
Curtailment (gain) loss
12

 
—

 
—

 
—

Foreign exchange impact and other
—

 
(178
)
 
—

 
(41
)
Projected benefit obligation at September 30, 2014 - Significant Plans
$
12,670

 
$
3,838

 
$
831

 
$
1,145


 
Nine Months Ended September 30, 2014
 
Pension plans
 
Postretirement benefit plans
In millions of dollars
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
Change in plan assets
 

 
 

 
 

 
 

Plan assets at fair value at beginning of year
$
12,731

 
$
6,918

 
$
32

 
$
1,472

Plans measured annually
—

 
(2,589
)
 
—

 
(11
)
Plan assets at fair value at beginning of year - Significant Plans
$
12,731

 
$
4,329

 
$
32

 
$
1,461

First quarter activity
96

 
69

 
(4
)
 
(10
)
Second quarter activity
192

 
241

 
(4
)
 
89

Plan assets at fair value at June 30, 2014 - Significant Plans
$
13,019

 
$
4,639

 
$
24

 
$
1,540

Actual return on plan assets
66

 
174

 
—

 
(14
)
Company contributions
100

 
13

 
14

 
—

Benefits paid
(177
)
 
(44
)
 
(21
)
 
(182
)
Foreign exchange impact and other
—

 
(212
)
 
—

 
115

Plan assets at fair value at September 30, 2014 - Significant Plans
$
13,008

 
$
4,570

 
$
17

 
$
1,459

Funded status of the plans at September 30, 2014 (1) - Significant Plans
$
338

 
$
732

 
$
(814
)
 
$
314

Net amount recognized
 

 
 

 
 

 
 

Benefit asset
$
338

 
$
732

 
$
—

 
$
314

Benefit liability
—

 
—

 
(814
)
 
—

Net amount recognized on the balance sheet - Significant Plans
$
338

 
$
732

 
$
(814
)
 
$
314

Amounts recognized in Accumulated other comprehensive income (loss)
 

 
 

 
 

 
 

Prior service benefit (cost)
$
4

 
$
27

 
$
—

 
$
158

Net actuarial gain (loss)
(4,419
)
 
(986
)
 
51

 
(499
)
Net amount recognized in equity (pretax) - Significant Plans
$
(4,415
)
 
$
(959
)
 
$
51

 
$
(341
)
Accumulated benefit obligation at September 30, 2014 - Significant Plans
$
12,661

 
$
3,735

 
N/A

 
N/A

(1)
The U.S. qualified pension plan is fully funded under specified Employee Retirement Income Security Act (ERISA) funding rules as of January 1, 2014 and no minimum required funding is expected for 2014.
The following table shows the change in Accumulated other comprehensive income (loss) related to Citi’s pension and postretirement benefit plans (for Significant Plans and All Other Plans) for the periods indicated.
 
Three Months Ended
Nine Months Ended
In millions of dollars
September 30, 2014
September 30, 2014
Beginning of period balance, net of tax (1) (2)
$
(4,166
)
$
(3,989
)
Actuarial assumptions changes and plan experience
23

(988
)
Net asset gain (loss) due to difference between actual and expected returns
(103
)
328

Net amortizations
52

151

Curtailment/ settlement loss (3)
30

58

Foreign exchange impact and other
105

264

Change in deferred taxes, net
(36
)
81

Change, net of tax
$
71

$
(106
)
End of period balance, net of tax (1) (2)
$
(4,095
)
$
(4,095
)
(1)    See Note 18 to the Consolidated Financial Statements for further discussion of net Accumulated other comprehensive income (loss) balance.
(2)    Includes net-of-tax amounts for certain profit sharing plans outside the United States.
(3)
Curtailment and settlement losses relate to repositioning actions in the U.S. and certain countries outside the U.S.

Plan Assumptions
The Company utilizes a number of assumptions to determine plan obligations and expenses. Changes in one or a combination of these assumptions will have an impact on the Company’s pension and postretirement projected benefit obligations, funded status and (benefit) expense. Changes in the plans’ funded status resulting from changes in the projected benefit obligation and fair value of plan assets will have a corresponding impact on Accumulated other comprehensive income (loss).
The discount rates used during the period in determining the pension and postretirement net (benefit) expense for the Significant Plans are shown in the following table:
Net benefit (expense) assumed discount rates during the period(1)
Three Months Ended
Year Ended
Sept. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2013
U.S. plans
 
 
 
 
Pension
4.25%
4.55%
4.75%
4.80%
Postretirement
3.95
4.15
4.35
4.30
Non-U.S. plans
 
 
 
 
Pension
4.30 - 8.00
4.40 - 8.50
4.50 - 8.80
4.50 - 8.90
Weighted average
5.95
6.21
6.41
6.49
Postretirement
8.40
8.90
9.40
8.90

(1) As disclosed above, effective April 1, 2013, the Company changed to a quarterly remeasurement approach for its Significant Plans. The 2013 rates shown above were utilized to calculate the fourth quarter expense in 2013. The 2014 rates shown above for the three months ended March 31, 2014, June 30, 2014 and September 30, 2014 were utilized to calculate the first, second and third quarter expense for 2014, respectively.

The discount rates used at period end in determining the pension and postretirement benefit obligations for the Significant Plans are shown in the following table:
Plan obligations assumed discount rates at period ended (1)
 
 
 
 
Sept. 30, 2014
Jun. 30, 2014
Mar. 30, 2014
Dec. 31, 2013
U.S. plans
 
 
 
Pension
4.25%
4.25%
4.55%
4.75%
Postretirement
4.00
3.95
4.15
4.35
Non-U.S. plans
 
 
 
 
Pension
4.10 - 8.30
4.30 - 8.00
4.40 - 8.50
4.50 - 8.80
Weighted average
5.94
5.95
6.21
6.41
Postretirement
8.70
8.40
8.90
9.40

(1)
For the Significant Plans, the September 30, 2014 rates shown above are utilized to calculate the September 30, 2014 benefit obligation and will be utilized to calculate the 2014 fourth quarter expense. The rates shown above for the year ended 2013 were utilized to calculate the first quarter 2014 expense. The March 31 and June 30, 2014 rates were utilized to calculate the 2014 second and third quarter expense, respectively.

Sensitivities of Certain Key Assumptions
The following table summarizes the estimated effect on the Company’s Significant Plans quarterly pension expense of a one-percentage-point change in the discount rate:
 
Three Months Ended September 30, 2014
In millions of dollars
One-percentage-point increase
One-percentage-point decrease
U.S. plans
$7
$(11)
Non-U.S. plans
(3)
4


Since the U.S. qualified pension plan was frozen, the majority of the prospective service cost has been eliminated and the gain/loss amortization period was changed to the life expectancy for inactive participants. As a result, pension expense for the U.S. qualified pension plan is driven more by interest costs than service costs and an increase in the discount rate would increase pension expense, while a decrease in the discount rate would decrease pension expense.

Contributions
The Company’s funding practice for U.S. and non-U.S. pension plans is generally to fund to minimum funding requirements in accordance with applicable local laws and regulations. The Company may increase its contributions above the minimum required contribution, if appropriate. In addition, management has the ability to change its funding practices. For the U.S. pension plan, there were no required minimum cash contributions during the third quarter of 2014; however, the Company made a $100 million discretionary contribution to the plan in the third quarter.
The following table summarizes the actual Company contributions for the nine months ended September 30, 2014 and 2013, as well as estimated expected Company contributions for the remainder of the year. Expected contributions are subject to change since contribution decisions are affected by various factors, such as market performance and regulatory requirements.

Summary of Company Contributions
 
Pension plans
 
Postretirement benefit plans
 
U.S. plans (1)
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
In millions of dollars
2014
 
  2013 (3)
 
2014
 
  2013 (3)
 
2014
 
  2013 (3)
 
2014
 
  2013 (3)
Company contributions(2) for the nine months ended September 30
$
139

 
$
32

 
$
164

 
$
282

 
$
34

 
$
49

 
$
2

 
$
244

Company contributions expected for the remainder of the year
$
12

 
$
11

 
$
43

 
$
57

 
$
17

 
$
16

 
$
10

 
$
1


(1)
The U.S. pension plans include benefits paid directly by the Company for the nonqualified pension plans.     
(2)
Company contributions are composed of cash contributions made to the plans and benefits paid directly to participants by the Company.
(3)
For the year ended December 31, 2013, actual Company contributions amounted to $51 million and $357 million for the U.S. pension and Non-U.S. pension plans, respectively. For the year ended December 31, 2013, actual Company contributions amounted to $52 million and $256 million for the U.S. postretirement and Non-U.S. postretirement plans, respectively.

Defined Contribution Plans
The Company sponsors defined contribution plans in the U.S. and in certain non-U.S. locations, all of which are administered in accordance with local laws. The most significant defined contribution plan is the Citigroup 401(k) Plan sponsored by the Company in the U.S.
Under the Citigroup 401(k) Plan, eligible U.S. employees receive matching contributions of up to 6% of their eligible compensation for 2014 and 2013, subject to statutory limits. Additionally, for eligible employees whose eligible compensation is $100,000 or less, a fixed contribution of up to 2% of eligible compensation is provided. All Company
contributions are invested according to participants’ individual
elections. The pretax expense associated with this plan amounted to approximately $93 million and $96 million in the three months ended September 30, 2014 and 2013, respectively, and $298 million and $298 million in the nine months ended September 30, 2014 and 2013, respectively.

Postemployment Plans
The Company sponsors U.S. postemployment plans that provide income continuation and health and welfare benefits to certain eligible U.S. employees on long-term disability.
The following table summarizes the components of net expense recognized in the Consolidated Statement of Income for the Company’s U.S. postemployment plans.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
In millions of dollars
2014
 
2013
 
2014
 
2013
Service related expense
 
 
 
 
 
 
 
Benefits earned during the period
$
—

 
$
6

 
$
—

 
$
19

Interest cost on benefit obligation
2

 
3

 
4

 
9

Amortization of unrecognized
 
 
 
 
 
 
 
Prior service cost
(8
)
 
1

 
(23
)
 
5

Net actuarial loss
3

 
4

 
10

 
10

Total service related (benefit) expense
$
(3
)
 
$
14

 
$
(9
)
 
$
43

Non-service related expense
$
4

 
$
7

 
$
21

 
$
20

Total net expense
$
1

 
$
21

 
$
12

 
$
63