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RETIREMENT BENEFITS
 3 Months Ended
Mar. 31, 2016
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 Citi’s 2015 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 U.S.
The U.S. qualified defined benefit plan was frozen effective January 1, 2008 for most employees. Accordingly, no additional compensation-based contributions have been 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 U.S.
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 measured and disclosed quarterly, instead of annually. The Significant Plans captured approximately 90% of the Company’s global pension and postretirement plan obligations as of March 31, 2016. All other plans (All Other Plans) are measured 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 pension and postretirement plans, for Significant Plans and All Other Plans, for the periods indicated.

 
Three Months Ended March 31,
 
Pension plans
 
Postretirement benefit plans
 
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
In millions of dollars
2016
2015
 
2016
2015
 
2016
2015
 
2016
2015
Qualified plans
 

 

 
 

 

 
 

 

 
 

 

Benefits earned during the period
$
1

$
2

 
$
38

$
44

 
$
—

$
—

 
$
3

$
4

Interest cost on benefit obligation
141

137

 
73

80

 
8

8

 
24

27

Expected return on plan assets
(218
)
(222
)
 
(72
)
(84
)
 
(2
)
—

 
(21
)
(29
)
Amortization of unrecognized
 

 

 
 

 

 
 

 

 
 

 

Prior service benefit
—

(1
)
 
—

—

 
—

—

 
(3
)
(3
)
Net actuarial loss
36

37

 
19

21

 
—

—

 
8

11

Curtailment gain(1)
—

—

 
(3
)
—

 
—

—

 
—

—

Settlement loss(1)
—

—

 
1

—

 
—

—

 
—

—

Net qualified plans (benefit) expense
$
(40
)
$
(47
)

$
56

$
61

 
$
6

$
8

 
$
11

$
10

Nonqualified plans expense
10

12

 
—

—

 
—

—

 
—

—

Total net (benefit) expense
$
(30
)
$
(35
)
 
$
56

$
61

 
$
6

$
8

 
$
11

$
10


(1)
(Gains)/losses due to curtailment and settlement relate to repositioning and divestiture activities.


Funded Status and Accumulated Other Comprehensive Income (AOCI)
The following tables summarize the funded status and amounts recognized in the Consolidated Balance Sheet for the Company’s Significant Plans.

Net Amount Recognized
 
Three Months Ended March 31,
 
Pension plans
 
Postretirement benefit plans
In millions of dollars
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
 
2016
 
2016
 
2016
 
2016
Change in projected benefit obligation (PBO)
 

 
 

 
 

 
 

Projected benefit obligation at beginning of period
$
13,943

 
$
6,534

 
$
817

 
$
1,291

Plans measured annually
—

 
(1,819
)
 
—

 
(282
)
Projected benefit obligation at beginning of period—Significant Plans
$
13,943

 
$
4,715

 
$
817

 
$
1,009

Benefits earned during the period
2

 
22

 
—

 
2

Interest cost on benefit obligation
148

 
60

 
8

 
20

Plan amendments
—

 
(30
)
 
—

 
—

Actuarial loss
632

 
196

 
30

 
17

Benefits paid, net of participants’ contributions
(208
)
 
(55
)
 
(16
)
 
(11
)
Foreign exchange impact and other
—

 
6

 
—

 
2

Projected benefit obligation at period end—Significant Plans
$
14,517

 
$
4,914


$
839

 
$
1,039

 
Three Months Ended March 31,
 
Pension plans
 
Postretirement benefit plans
In millions of dollars
U.S. plans
 
Non-U.S. plans
 
U.S. plans
 
Non-U.S. plans
 
2016
 
2016
 
2016
 
2016
Change in plan assets
 

 
 

 
 

 
 

Plan assets at fair value at beginning of period
$
12,137

 
$
6,104

 
$
166

 
$
1,133

Plans measured annually
—

 
(1,175
)
 
—

 
(8
)
Plan assets at fair value at beginning of period—Significant Plans
$
12,137

 
$
4,929

 
$
166

 
$
1,125

Actual return on plan assets
120

 
294

 
2

 
48

Company contributions
15

 
12

 
14

 
—

Plan participants’ contributions
—

 
1

 
—

 
—

Benefits paid, net of government subsidy
(207
)
 
(55
)
 
(16
)
 
(11
)
Foreign exchange impact and other
—

 
(19
)
 
—

 
2

Plan assets at fair value at period end—Significant Plans
$
12,065

 
$
5,162

 
$
166

 
$
1,164

 
 
 
 
 
 
 
 
Funded status of the plans at period end—Significant Plans(1)(2)
$
(2,452
)
 
$
248

 
$
(673
)
 
$
125

 
 
 
 
 
 
 
 
Net amount recognized
 

 
 

 
 

 
 

Benefit asset
$
—

 
$
758

 
$
—

 
$
125

Benefit liability
(2,452
)
 
(510
)
 
(673
)
 
—

Net amount recognized on the balance sheet—Significant Plans
$
(2,452
)
 
$
248

 
$
(673
)
 
$
125

 
 
 
 
 
 
 
 
Amounts recognized in Accumulated other comprehensive income (loss)
 
 

 
 

 
 

Prior service benefit
—

 
43

 
—

 
109

Net actuarial loss
(7,065
)
 
(1,089
)
 
(27
)
 
(478
)
Net amount recognized in equity (pretax)—Significant Plans
$
(7,065
)
 
$
(1,046
)
 
$
(27
)
 
$
(369
)
 
 
 
 
 
 
 
 
Accumulated benefit obligation at period end—Significant Plans
$
14,506

 
$
4,618

 
$
839

 
$
1,039


(1)
The U.S. pension plans include $733 million relating to the U.S. nonqualified plans of the Company that are not funded.
(2)
The U.S. qualified pension plan is fully funded under specified Employee Retirement Income Security Act of 1974, as amended (ERISA), funding rules as of January 1, 2016 and no minimum required funding is expected for 2016.

The following table shows the change in AOCI related to Company’s benefit plans (Significant Plans and All Other Plans) for the periods indicated.
In millions of dollars
Three Months Ended
March 31, 2016
 
Year Ended December 31, 2015
 
 
 
 
Beginning of period balance, net of tax(1)(2)
$
(5,116
)
 
$
(5,159
)
Actuarial assumptions changes and plan experience
(875
)
 
898

Net asset gain (loss) due to difference between actual and expected returns
163

 
(1,457
)
Net amortizations
56

 
236

Prior service (cost) credit
30

 
(6
)
Curtailment/settlement gain(3)
1

 
57

Foreign exchange impact and other
(102
)
 
291

Change in deferred taxes, net
262

 
24

Change, net of tax
$
(465
)
 
$
43

End of period balance, net of tax(1)(2)
$
(5,581
)
 
$
(5,116
)
(1)
See Note 18 to the Consolidated Financial Statements for further discussion of net AOCI balance.
(2)
Includes net-of-tax amounts for certain profit sharing plans outside the U.S.
(3)
Gains due to curtailment and settlement relate to repositioning and divestiture activities.

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 PBO, funded status and (benefit) expense. Changes in the plans’ funded status resulting from changes in the PBO and fair value of plan assets will have a corresponding impact on AOCI.
For the Company’s Significant Plans, the discount rates at the respective period ended in the tables below are utilized to measure the period-end PBO and the net periodic (benefit) expense for the subsequent period. As a result of the quarterly measurement process, the net periodic (benefit) expense for the Significant Plans is calculated at each respective quarter-end based on the preceding quarter-end rates. The discount rates for the non-U.S. pension and postretirement plans relate to the Significant Plans only.
The discount rates utilized during the period in determining the pension and postretirement net (benefit) expense for the Significant Plans are as follows:

Net benefit (expense) assumed discount rates during the period
Three months ended
Mar. 31, 2016
Dec. 31, 2015
U.S. plans
 
 
Qualified pension
4.40%
4.35%
Nonqualified pension
4.35
4.25
Postretirement
4.20
4.10
Non-U.S. plans
 
 
Pension
0.75 to 13.20
0.75 to 13.30
Weighted average
5.37
5.30
Postretirement
8.60
8.55


The discount rates utilized at period-end in determining the pension and postretirement benefit obligations for the Significant Plans are as follows:
Plan obligations assumed discount rates at period ended
Mar. 31, 2016
Dec. 31, 2015
U.S. plans
 
 
Qualified pension
3.95%
4.40%
Nonqualified pension
3.90
4.35
Postretirement
3.75
4.20
Non-U.S. plans
 
 
Pension
0.35 - 12.30
0.75 to 13.20
Weighted average
5.14
5.37
Postretirement
8.45
8.60


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 March 31, 2016
In millions of dollars
One-percentage-point increase
One-percentage-point decrease
Pension
 
 
   U.S. plans
$5
$(10)
   Non-U.S. plans
(5)
8
 
 
 
Postretirement
 
 
   U.S. plans
$1
$(1)
   Non-U.S. plans
(2)
3

    
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 first quarter of 2016.
The following table summarizes the actual Company contributions for the three months ended March 31, 2016 and 2015, as well as estimated expected Company contributions for the remainder of 2016 and the contributions made in the second, third and fourth quarters of 2015. 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
2016
2015
 
2016
2015
 
2016
2015
 
2016
2015
Company contributions(2) for the three months ended March 31
$
15

$
11

 
$
32

$
26

 
$
14

$
20

 
$
2

$
7

Company contributions made or expected to be made expected during the remainder of the year
$
40

$
41

 
$
103

$
108

 
$
—

$
215

 
$
7

$
2


(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 Citi Retirement Savings Plan (formerly known as the Citigroup 401(k) Plan) sponsored by the Company in the U.S.
Under the Citi Retirement Savings Plan, eligible U.S. employees receive matching contributions of up to 6% of their eligible compensation for 2016 and 2015, 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.
The following table summarizes the actual Company contributions for the three months ended March 31, 2016 and 2015, respectively.
 
Three Months Ended March 31,
In millions of dollars
2016
2015
   U.S. plans
$96
$101
   Non-U.S. plans
68
74


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 March 31,
In millions of dollars
2016
 
2015
Service-related expense
 

 
 

Interest cost on benefit obligation
1

 
1

Amortization of unrecognized
 
 
 
    Prior service benefit
(8
)
 
(7
)
    Net actuarial loss
1

 
3

Total service-related benefit
$
(6
)
 
$
(3
)
Non-service-related expense
$
8

 
$
9

Total net expense
$
2

 
$
6