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RETIREMENT BENEFITS
 9 Months Ended
Sep. 30, 2015
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 2014 Annual Report on Form 10-K.

Pension and Postretirement Plans
The Company has several non-contributory 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 non-contributory, 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.
The plan obligations, plan assets and periodic plan expense for the Company’s most significant pension and postretirement benefit plans (Significant Plans) are remeasured and disclosed quarterly, instead of annually. The Significant Plans captured approximately 90% of the Company’s global pension and postretirement plan obligations as of September 30, 2015. All other plans (All Other Plans) are remeasured annually with a December 31 measurement date.

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 and 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
2015
2014
 
2015
2014
 
2015
2014
 
2015
2014
Qualified plans
 

 

 
 

 

 
 

 

 
 

 

Benefits earned during the period
$
1

$
1

 
$
42

$
43

 
$
—

$
—

 
$
3

$
4

Interest cost on benefit obligation
143

132

 
77

93

 
8

8

 
25

30

Expected return on plan assets
(223
)
(220
)
 
(81
)
(98
)
 
—

—

 
(25
)
(31
)
Amortization of unrecognized
 

 

 
 

 

 
 

 

 
 

 

Prior service (benefit) cost
—

(1
)
 
—

—

 
—

—

 
(3
)
(3
)
Net actuarial loss
31

29

 
17

20

 
—

—

 
10

10

Curtailment loss (1)
2

11

 
—

(5
)
 
—

—

 
—

—

Settlement loss (gain) (1)
—

—

 
—

26

 
—

—

 
—

—

Special termination benefits (1)
—

—

 
—

8

 
—

—

 
—

—

Net qualified plans (benefit) expense
$
(46
)
$
(48
)

$
55

$
87

 
$
8

$
8

 
$
10

$
10

Nonqualified plans expense
11

10

 
—

—

 
—

—

 
—

—

Total net (benefit) expense
$
(35
)
$
(38
)
 
$
55

$
87

 
$
8

$
8

 
$
10

$
10


(1)
Losses (gains) due to curtailment and settlement 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
2015
2014
 
2015
2014
 
2015
2014
 
2015
2014
Qualified plans
 

 

 
 

 

 
 

 

 
 

 

Benefits earned during the period
$
3

$
4

 
$
129

$
136

 
$
—

$
—

 
$
10

$
11

Interest cost on benefit obligation
411

410

 
237

287

 
24

25

 
82

90

Expected return on plan assets
(668
)
(656
)
 
(248
)
(291
)
 
—

(1
)
 
(81
)
(92
)
Amortization of unrecognized


 
 
 

 

 
 
 
 


 

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

2

 
—

—

 
(9
)
(9
)
Net actuarial loss
106

78

 
56

60

 
—

—

 
33

30

Curtailment loss (1)
12

11

 
—

12

 
—

—

 
—

—

Settlement loss (gain) (1)
—

—

 
—

39

 
—

—

 
—

(2
)
Special termination benefits (1)
 
—

 
 
8

 
 
—

 
 
—

Net qualified plans (benefit) expense
$
(138
)
$
(156
)
 
$
174

$
253


$
24

$
24

 
$
35

$
28

Nonqualified plans expense
33

34

 
—

—

 
—

—

 
—

—

Total net (benefit) expense
$
(105
)
$
(122
)
 
$
174

$
253

 
$
24

$
24

 
$
35

$
28


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

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, 2015
 
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
$
14,839

 
$
7,252

 
$
917

 
$
1,527

Plans measured annually
—

 
(2,070
)
 
—

 
(348
)
Projected benefit obligation at beginning of year—Significant Plans
$
14,839

 
$
5,182

 
$
917

 
$
1,179

First quarter activity
201

 
(47
)
 
3

 
(25
)
Second quarter activity
(1,057
)
 
—

 
(76
)
 
(74
)
Projected benefit obligation at June 30, 2015—Significant Plans
$
13,983

 
$
5,135

 
$
844

 
$
1,080

Benefits earned during the period
1

 
23

 
—

 
2

Interest cost on benefit obligation
151

 
63

 
8

 
21

Actuarial loss/(gain)
135

 
(105
)
 
2

 
(6
)
Benefits paid, net of participants’ contributions
(205
)
 
(63
)
 
(12
)
 
(12
)
Curtailment loss(1)
2

 
—

 
—

 
—

Foreign exchange impact and other
—

 
(325
)
 
—

 
(77
)
Projected benefit obligation at period end—Significant Plans
$
14,067

 
$
4,728


$
842

 
$
1,008


(1)
Losses due to curtailment relate to repositioning actions in the U.S.

 
Nine Months Ended September 30, 2015
 
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
$
13,071

 
$
7,057

 
$
10

 
$
1,384

Plans measured annually
—

 
(1,406
)
 
—

 
(9
)
Plan assets at fair value at beginning of year—Significant Plans
$
13,071

 
$
5,651

 
$
10

 
$
1,375

First quarter activity
129

 
(154
)
 
$
(4
)
 
(54
)
Second quarter activity
(256
)
 
(23
)
 
$
(3
)
 
(43
)
Plan assets at fair value at June 30, 2015—Significant Plans
$
12,944

 
$
5,474

 
$
3

 
$
1,278

Actual return on plan assets
(356
)
 
15

 
—

 
(22
)
Company contributions
13

 
11

 
184

 
—

Plan participants’ contributions
—

 
1

 
—

 
—

Benefits paid
(205
)
 
(64
)
 
(13
)
 
(12
)
Foreign exchange impact and other
—

 
(346
)
 
—

 
(92
)
Plan assets at fair value at period end—Significant Plans
$
12,396

 
$
5,091

 
$
174

 
$
1,152

 
 
 
 
 
 
 
 
Funded status of the plans
 
 
 
 
 
 
 
Qualified plans
$
(948
)
 
$
363

 
$
(668
)
 
$
144

Nonqualified plans
(723
)
 
—

 
—

 
—

Funded status of the plans at period end—Significant Plans
$
(1,671
)
 
$
363

 
$
(668
)
 
$
144

 
 
 
 
 
 
 
 
Net amount recognized
 

 
 

 
 

 
 

Benefit asset
$
—

 
$
363

 
$
—

 
$
144

Benefit liability
(1,671
)
 
—

 
(668
)
 
—

Net amount recognized on the balance sheet—Significant Plans
$
(1,671
)
 
$
363

 
$
(668
)
 
$
144

 
 
 
 
 
 
 
 
Amounts recognized in Accumulated other comprehensive income (loss)
 
 

 
 

 
 

Prior service benefit (cost)
$
—

 
$
12

 
$
—

 
$
116

Net actuarial gain (loss)
(6,189
)
 
(1,048
)
 
(6
)
 
(485
)
Net amount recognized in equity (pretax) - Significant Plans
$
(6,189
)
 
$
(1,036
)
 
$
(6
)
 
$
(369
)
 
 
 
 
 
 
 
 
Accumulated benefit obligation at period end - Significant Plans
$
14,057

 
$
4,420

 
$
842

 
$
1,008


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, 2015
 
September 30, 2015
Beginning of period balance, net of tax (1) (2)
$
(4,671
)
 
$
(5,159
)
Actuarial assumptions changes and plan experience
(26
)
 
851

Net asset gain (loss) due to difference between actual and expected returns
(681
)
 
(1,051
)
Net amortizations
54

 
179

Prior service credit
—

 
(6
)
Foreign exchange impact and other
108

 
171

Change in deferred taxes, net
185

 
(16
)
Change, net of tax
$
(360
)
 
$
128

End of period balance, net of tax (1) (2)
$
(5,031
)
 
$
(5,031
)
(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 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
Sept. 30, 2015
Jun. 30, 2015
Sept. 30, 2014
U.S. plans
 
 
 
Qualified pension
4.45%
3.85%
4.25%
Nonqualified pension
4.30
3.70
4.75
Postretirement
4.20
3.65
3.95
Non-U.S. plans
 
 
 
Pension
1.00-12.00
0.70 - 12.25
4.30 - 8.00
Weighted average
5.41
5.14
5.95
Postretirement
8.50
8.00
8.40

(1) The Company uses a quarterly remeasurement approach for its Significant Plans. The rates for the three months ended September 30, 2015 and June 30, 2015 shown above were utilized to calculate the 2015 third and second quarter expense, respectively. The rates for the three months ended September 30, 2014 shown above were utilized to calculate the 2014 third quarter expense.

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, 2015
June 30,
2015
Mar. 31, 2015
U.S. plans
 
 
Qualified pension
4.35%
4.45%
3.85%
Nonqualified pension
4.25
4.30
3.70
Postretirement
4.10
4.20
3.65
Non-U.S. plans
 
 
 
Pension
0.75 - 13.30
1.00 - 12.00
0.70 - 12.25
Weighted average
5.30
5.41
5.14
Postretirement
8.55
8.50
8.00

  
(1) For the Significant Plans, the September 30, 2015 rates shown above are
utilized to calculate the September 30, 2015 benefit obligation and will be
utilized to calculate the 2015 fourth quarter expense. The June 30, 2015 rates were utilized to calculate the third quarter 2015 expense. The March 31, 2015 rates were utilized to calculate the second quarter 2015 expense.

Sensitivities of Certain Key Assumptions
The following table summarizes the estimated effect on the Company’s Significant Plans quarterly expense of a one-percentage-point change in the discount rate:
 
Three Months Ended September 30, 2015
In millions of dollars
One-percentage-point increase
One-percentage-point decrease
Pension
 
 
   U.S. plans
$5
$(10)
   Non-U.S. plans
(5)
9
 
 
 
Postretirement
 
 
   U.S. plans
$1
$(1)
   Non-U.S. plans
(2)
2
 
 
 

Since the U.S. plans were 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, expense for the U.S. plans is driven more by interest costs than service costs and an increase in the discount rate would increase expense, while a decrease in the discount rate would decrease 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 plans, there were no required minimum cash contributions during the third quarter of 2015. The company made a discretionary contribution of $174 million to the U.S. postretirement plan during the third quarter of 2015. This contribution will be used to pay future retiree medical claims.
The following table summarizes the actual Company contributions for the nine months ended September 30, 2015 and 2014, as well as estimated expected Company contributions for the remainder of 2015 and the contributions made in the fourth quarter of 2014. 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 plans 
 
U.S. plans (1)
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
In millions of dollars
2015
2014
 
2015
2014
 
2015
2014
 
2015
2014
Company contributions(2) for the nine months ended September 30
$
33

$
139

 
$
85

$
164

 
$
217

$
34

 
$
7

$
2

Company contributions expected for the remainder of the year
$
12

$
12

 
$
47

$
43

 
$
15

$
17

 
$
3

$
10


(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.

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 2015 and 2014, 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 expense associated with this plan amounted to approximately $94 million and $93 million for the three months ended September 30, 2015 and 2014, respectively, and $295 million and $298 million for the nine months ended September 30, 2015 and 2014, 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
2015
 
2014
 
2015
 
2014
Service-related expense
 

 
 

 
 

 
 

Benefits earned during the period
$
—

 
$
—

 
$
—

 
$
—

Interest cost on benefit obligation
1

 
2

 
3

 
4

Amortization of unrecognized
 
 
 
 
 
 
 
    Prior service benefit
(8
)
 
(8
)
 
(23
)
 
(23
)
    Net actuarial loss
3

 
3

 
9

 
10

Total service-related benefit
$
(4
)
 
$
(3
)
 
$
(11
)
 
$
(9
)
Non-service-related (benefit) expense
$
9

 
$
4

 
$
15

 
$
21

Total net expense
$
5

 
$
1

 
$
4

 
$
12