RETIREMENT BENEFITS

3 Months Ended

Mar. 31, 2012

RETIREMENT BENEFITS

RETIREMENT BENEFITS

8.    RETIREMENT BENEFITS

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 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.

Net (Benefit) Expense

	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	2012			2011			2012			2011			2012			2011			2012			2011
Qualified Plans
Benefits earned during the year	$	3		$	4		$	50		$	42		$	—		$	—		$	7		$	6
Interest cost on benefit obligation		141			155			90			85			11			15			28			26
Expected return on plan assets		(224	)		(222	)		(98	)		(94	)		(1	)		(2	)		(25	)		(25	)
Amortization of unrecognized
Prior service cost (benefit)		—			—			1			1			—			(1	)		—			—
Net actuarial loss		24			17			19			14			2			3			6			5
Curtailment (gain) loss		—			—			—			3			—			—			—			—
Net qualified plans (benefit) expense	$	(56	)	$	(46	)	$	62		$	51		$	12		$	15		$	16		$	12
Nonqualified plans expense	$	10		$	10		$	—		$	—		$	—		$	—		$	—		$	—
Total net (benefit) expense	$	(46	)	$	(36	)	$	62		$	51		$	12		$	15		$	16		$	12

Contributions

        The Company's funding policy 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.

        For the U.S. pension plans, there are no expected or required cash contributions for 2012. For the U.S. non-qualified pension plans, the Company contributed $11 million in benefits paid directly during the period ended March 31, 2012 and expects to contribute an additional $35 million in benefits paid during the remainder of 2012.

        For the non-U.S. pension plans, the Company contributed $47 million in cash and benefits paid directly during the three months ended March 31, 2012 and expects to contribute an additional $204 million during the remainder of 2012.

        For the U.S. postretirement benefit plans, the Company expects to contribute approximately $55 million in benefits paid directly in 2012.

        For the non-U.S. postretirement plans, the Company contributed $2 million in cash and benefits paid directly during the three months ended March 31, 2012 and expects to contribute $93 million during the remainder of 2012.

        These estimates are subject to change, since contribution decisions are affected by various factors, such as market performance and regulatory requirements. In addition, management has the ability to change funding policy.

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. For the periods ended March 31, 2012 and 2011, the plans' net expense recognized in the Consolidated Statement of Income was $20 million and $18 million, respectively. For the period ended March 31, 2012, the prior service cost and net actuarial loss were approximately $2 million and $3 million, respectively, and for the period ended March 31, 2011, were approximately $2 million and $2 million, respectively.