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 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 a few employees covered under the prior final average pay formulas, the benefits under these plans were frozen in prior years.

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. Beginning in the second quarter of 2013, the Company utilizes a quarterly, rather than annual, measurement for the Significant Plans (as defined in Note 1 to the Consolidated Financial Statements). For All Other Plans (as defined in Note 1 to the Consolidated Financial Statements), the Company will continue to utilize an annual measurement approach.

Net (Benefit) Expense

	Pension plans																		Postretirement benefit plans
	U.S. plans									Non-U.S. plans									U.S. plans									Non-U.S. plans
In millions of dollars	2013			2012			2011			2013			2012			2011			2013			2012			2011			2013			2012			2011
Qualified plans
Benefits earned during the year	$	8		$	12		$	13		$	210		$	199		$	203		$	—		$	—		$	—		$	43		$	29		$	28
Interest cost on benefit obligation	538			565			612			384			367			382			33			44			53			146			116			118
Expected return on plan assets	(863		)	(897		)	(890		)	(396		)	(399		)	(422		)	(2		)	(4		)	(6		)	(133		)	(108		)	(117		)
Amortization of unrecognized
Net transition obligation	—			—			—			—			—			(1		)	—			—			—			—			—			—
Prior service cost (benefit)	(4		)	(1		)	(1		)	4			4			4			(1		)	(1		)	(3		)	—			—			—
Net actuarial loss	104			96			64			95			77			72			—			4			3			45			25			24
Curtailment loss	21			—			—			4			10			4			—			—			—			—			—			—
Settlement (gain) loss	—			—			—			13			35			10			—			—			—			(1		)	—			—
Special termination benefits	—			—			—			8			1			27			—			—			—			—			—			—
Net qualified (benefit) expense	$	(196	)	$	(225	)	$	(202	)	$	322		$	294		$	279		$	30		$	43		$	47		$	100		$	62		$	53
Nonqualified plans expense	$	46		$	42		$	42		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Cumulative effect of change in accounting policy(1)	$	(23	)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	3		$	—		$	—
Total net (benefit) expense	$	(173	)	$	(183	)	$	(160	)	$	322		$	294		$	279		$	30		$	43		$	47		$	103		$	62		$	53

(1) See Note 1 to the Consolidated Financial Statements for additional information on the change in accounting policy.

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 for 2013 or 2012. The following table summarizes the actual Company contributions for the years ended December 31, 2013 and 2012, as well as estimated expected Company contributions for 2014. Expected contributions are subject to change since contribution decisions are affected by various factors, such as market performance and regulatory requirements.

	Pension plans (1)												Postretirement plans (1)
	U.S. plans (2)						Non-U.S. plans						U.S. plans						Non-U.S. plans
In millions of dollars	2014		2013		2012		2014		2013		2012		2014		2013		2012		2014		2013		2012
Cash contributions paid by the Company	$	—	$	—	$	—	$	116	$	308	$	270	$	—	$	—	$	—	$	5	$	251	$	88
Benefits paid directly by the Company	54		51		54		49		49		82		62		52		54		6		5		4
Total Company contributions	$	54	$	51	$	54	$	165	$	357	$	352	$	62	$	52	$	54	$	11	$	256	$	92

(1) Payments reported for 2014 are expected amounts.

(2) The U.S. pension plans include benefits paid directly by the Company for the nonqualified pension plans.

The estimated net actuarial loss and prior service cost that will be amortized from Accumulated other comprehensive income (loss) into net expense in 2014 are approximately $181 million and $3 million, respectively, for defined benefit pension plans. For postretirement plans, the estimated 2014 net actuarial loss and prior service cost amortizations are approximately $31 million and $(12) million, respectively.

The following table summarizes the funded status and amounts recognized in the Consolidated Balance Sheet for the Company’s U.S. qualified and nonqualified pension plans, postretirement plans and plans outside the United States.

Net Amount Recognized

	Pension plans												Postretirement plans
	U.S. plans						Non-U.S. plans						U.S. plans						Non-U.S. plans
In millions of dollars	2013			2012			2013			2012			2013			2012			2013			2012
Change in projected benefit obligation
Qualified plans
Projected benefit obligation at beginning of year	$	13,268		$	12,377		$	7,399		$	6,262		$	1,072		$	1,127		$	2,002		$	1,368
Cumulative effect of change in accounting policy (1)	(368		)	—			385			—			—			—			81			—
Benefits earned during the year	8			12			210			199			—			—			43			29
Interest cost on benefit obligation	538			565			384			367			33			44			146			116
Plan amendments	—			(13		)	(28		)	17			—			—			(171		)	—
Actuarial (gain) loss	(671		)	965			(733		)	923			(253		)	(24		)	(617		)	457
Benefits paid, net of participants contributions	(661		)	(638		)	(296		)	(306		)	(85		)	(85		)	(64		)	(54		)
Expected government subsidy	—			—			—			—			13			10			—			—
Settlements	—			—			(57		)	(254		)	—			—			(2		)	—
Curtailment (gain) loss	23			—			(2		)	(8		)	—			—			(3		)	—
Special/contractual termination benefits	—			—			8			1			—			—			—			—
Foreign exchange impact and other	—			—			(76		)	198			—			—			(4		)	86
Qualified plans	$	12,137		$	13,268		$	7,194		$	7,399		$	780		$	1,072		$	1,411		$	2,002
Nonqualified plans (2)	$	692		$	769		$	—		$	—		$	—		$	—		$	—		$	—
Projected benefit obligation at year end	$	12,829		$	14,037		$	7,194		$	7,399		$	780		$	1,072		$	1,411		$	2,002

(1) See Note 1 to the Consolidated Financial Statements for additional information on the change in accounting policy.

(2) These plans are unfunded.

	Pension plans												Postretirement plans
	U.S. plans						Non-U.S. plans						U.S. plans						Non-U.S. plans
In millions of dollars	2013			2012			2013			2012			2013			2012			2013			2012
Change in plan assets
Qualified plans
Plan assets at fair value at beginning of year	$	12,656		$	11,991		$	7,154		$	6,421		$	50		$	74		$	1,497		$	1,096
Cumulative effect of change in accounting policy (1)	(53		)	—			126			—			3			—			21			—
Actual return on plan assets	789			1,303			(256		)	786			(1		)	7			(223		)	277
Company contributions	—			—			357			352			52			54			256			92
Plan participants contributions	—			—			6			6			50			58			—			—
Settlements	—			—			(61		)	(254		)	—			—			—			—
Benefits paid	(661		)	(638		)	(302		)	(312		)	(122		)	(143		)	(64		)	(54		)
Foreign exchange impact and other	—			—			(106		)	155			—			—			(15		)	86
Qualified plans	$	12,731		$	12,656		$	6,918		$	7,154		$	32		$	50		$	1,472		$	1,497
Nonqualified plans (2)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Plan assets at fair value at year end	$	12,731		$	12,656		$	6,918		$	7,154		$	32		$	50		$	1,472		$	1,497

Funded status of the plans
Qualified plans (3)	$	593		$	(612	)	$	(276	)	$	(245	)	$	(748	)	$	(1,022	)	$	61		(505		)
Nonqualified plans (2)	(692		)	(769		)	—			—			—			—			—			—
Funded status of the plans at year end	$	(99	)	$	(1,381	)	$	(276	)	$	(245	)	$	(748	)	$	(1,022	)	$	61		$	(505	)

Net amount recognized
Qualified plans
Benefit asset	$	593		$	—		$	709		$	763		$	—		$	—		$	407		$	—
Benefit liability	—			(612		)	(985		)	(1,008		)	(748		)	(1,022		)	(346		)	(505		)
Qualified plans	$	593		$	(612	)	$	(276	)	$	(245	)	$	(748	)	$	(1,022	)	$	61		$	(505	)
Nonqualified plans (2)	$	(692	)	$	(769	)	$	—		$	—		$	—		$	—		$	—		$	—
Net amount recognized on the balance sheet	$	(99	)	$	(1,381	)	$	(276	)	$	(245	)	$	(748	)	$	(1,022	)	$	61		$	(505	)

Amounts recognized in Accumulated other comprehensive income (loss)
Qualified plans
Net transition asset (obligation)	$	—		$	—		$	(1	)	$	(2	)	$	—		$	—		$	(1	)	$	(1	)
Prior service benefit (cost)	7			13			(2		)	(33		)	1			1			173			5
Net actuarial gain (loss)	(3,911		)	(4,904		)	(2,007		)	(1,936		)	129			(123		)	(555		)	(802		)
Qualified plans	$	(3,904	)	$	(4,891	)	$	(2,010	)	$	(1,971	)	$	130		$	(122	)	$	(383	)	$	(798	)
Nonqualified plans (2)	$	(226	)	$	(298	)	$	—		$	—		$	—		$	—		$	—		$	—
Net amount recognized in equity—pretax	$	(4,130	)	$	(5,189	)	$	(2,010	)	$	(1,971	)	$	130		$	(122	)	$	(383	)	$	(798	)

Accumulated benefit obligation
Qualified plans	$	12,122		$	13,246		$	6,652		$	6,369		$	780		$	1,072		$	1,411		$	2,002
Nonqualified plans (2)	668			738			—			—			—			—			—			—
Accumulated benefit obligation at year end	$	12,790		$	13,984		$	6,652		$	6,369		$	780		$	1,072		$	1,411		$	2,002

(1) See Note 1 to the Consolidated Financial Statements for additional information on the change in accounting policy.

(2) These plans are unfunded.

(3) 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 pension and post-retirement benefit plans for the years ended December 31, 2013, 2012 and 2011:

In millions of dollars	2013			2012			2011
Balance, January 1, net of tax (1)	$	(5,270	)	$	(4,282	)	$	(4,105	)
Cumulative effect of change in accounting policy	(22		)	—			—
Actuarial assumptions changes and plan experience (2)	2,380			(2,400		)	(820		)
Net asset gain (loss) due to difference between actual and expected returns	(1,084		)	963			197
Net amortizations	271			214			183
Prior service credit (cost)	360			—			—
Foreign exchange impact and other	74			(155		)	28
Change in deferred taxes, net	(666		)	390			235
Change, net of tax	$	1,313		$	(988	)	$	(177	)
Balance, December 31, net of tax (1)	$	(3,957	)	$	(5,270	)	$	(4,282	)

(1) See Note 20 to the Consolidated Financial Statements for further discussion of net Accumulated other comprehensive income (loss) balance.

(2) Includes $58 million and $62 million of actuarial losses related to the U.S. nonqualified pension plans for 2013 and 2012, respectively.

At December 31, 2013 and 2012, for both qualified and nonqualified pension plans and for both funded and unfunded plans, the aggregate projected benefit obligation (PBO), the aggregate accumulated benefit obligation (ABO), and the aggregate fair value of plan assets are presented for pension plans with a projected benefit obligation in excess of plan assets and for pension plans with an accumulated benefit obligation in excess of plan assets as follows:

	PBO exceeds fair value of plan assets								ABO exceeds fair value plan assets
	U.S. plans (1)				Non-U.S. plans				U.S. plans (1)				Non-U.S. plans
In millions of dollars	2013		2012		2013		2012		2013		2012		2013		2012
Projected benefit obligation	$	692	$	14,037	$	2,765	$	4,792	$	692	$	14,037	$	2,408	$	2,608
Accumulated benefit obligation	668		13,984		2,375		3,876		668		13,984		2,090		2,263
Fair value of plan assets	—		12,656		1,780		3,784		—		12,656		1,468		1,677

(1) At December 31, 2013, assets for the U.S. qualified plan exceeded both the projected benefit obligation (PBO) and accumulated benefit obligation (ABO). The U.S. nonqualified plans are not funded and thus the PBO and ABO exceeded plan assets as of this date. At December 31, 2012, for both the U.S. qualified and nonqualified plans, the aggregate PBO and the aggregate ABO exceeded plan assets. In 2012, the PBO and ABO of the U.S. plans include $13,268 million and $13,246 million, respectively, relating to the qualified plan and $769 million and $738 million, respectively, relating to the nonqualified plans.

At December 31, 2013, combined accumulated benefit obligations for the U.S. and non-U.S. pension plans, excluding U.S. nonqualified plans, were less than plan assets by $0.9 billion. At December 31, 2012, combined accumulated benefit obligations for the U.S. and non-U.S. pension plans, excluding U.S. nonqualified plans, were less than plan assets by $0.2 billion.

Plan Assumptions

The Company utilizes a number of assumptions to determine plan obligations and expense. 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 Accumulated other comprehensive income (loss).

Certain assumptions used in determining pension and postretirement benefit obligations and net benefit expenses for the Company’s plans are shown in the following table:

At year end	2013	2012
Discount rate
U.S. plans (1)
Pension	4.75%	3.90%
Postretirement	4.35	3.60
Non-U.S. pension plans (2)
Range	1.60 to 29.25	1.50 to 28.00
Weighted average	5.60	5.24
Non-U.S. postretirement plans (2)
Range	3.50 to 11.90	3.50 to 10.00
Weighted average	8.65	7.46
Future compensation increase rate
U.S. plans (3)	N/A	N/A
Non-U.S. pension plans
Range	1.00 to 26.00	1.20 to 26.00
Weighted average	3.40	3.93
Expected return on assets
U.S. plans	7.00	7.00
Non-U.S. pension plans
Range	1.20 to 11.50	0.90 to 11.50
Weighted average	5.68	5.76
Non-U.S. postretirement plans
Range	8.50 to 8.90	8.50 to 9.60
Weighted average	8.50	8.50

(1) Effective April 1, 2013, Citigroup changed to a quarterly remeasurement approach for its six largest plans, including the U.S. qualified pension and postretirement plans. For the U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligation and will be used to determine the 2014 first quarter expense. The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligation and used for the 2013 first quarter expense. For the U.S. nonqualified pension plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligations and will be used to determine the expense for 2014. The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligations and the expense for the full year 2013.

(2) Effective April 1, 2013, Citigroup changed to a quarterly remeasurement approach for its four largest non-U.S. plans, including the qualified pension and postretirement plans. For the four largest non-U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligation and will be used to determine the 2014 first quarter expense. The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligation and used for the 2013 first quarter expense. For all other non-U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligations and will be used to determine the expense for 2014. The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligations and the expense for the full year 2013.

(3) Since the U.S. qualified pension plan was frozen, a compensation increase rate applies only to certain small groups of grandfathered employees accruing benefits under a final pay plan formula. Only the future compensation increases for these grandfathered employees will affect future pension expense and obligations. Compensation increase rates for these small groups of participants range from 3.00% to 4.00%.

During the year	2013	2012
Discount rate
U.S. plans (1)
Pension	3.90%/4.2%/4.75%/ 4.80%	4.70%
Postretirement	3.60/3.60/ 4.40/ 4.30	4.30
Non-U.S. pension plans
Range	1.50 to 28.00	1.75 to 13.25
Weighted average (2)	5.24	5.94
Non-U.S. postretirement plans
Range	3.50 to 10.00	4.25 to 10.25
Weighted average (2)	7.46	8.25
Future compensation increase rate
U.S. plans (3)	N/A	N/A
Non-U.S. pension plans
Range	1.20 to 26.00	1.60 to 13.30
Weighted average (2)	3.93	4.04
Expected return on assets
U.S. plans	7.00	7.50
Non-U.S. pension plans
Range	0.90 to 11.50	1.00 to 12.50
Weighted average (2)	5.76	6.25
Non-U.S. postretirement plans
Range	8.50 to 9.60	9.5 to 10.00
Weighted average (2)	8.50	9.50

(1) For the U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the expense in each of the respective four quarters in 2013. The 2012 rates shown above were utilized to calculate expense for 2012.

(2) For the four largest non-U.S. plans, which follow the quarterly remeasurement approach adopted effective April 1, 2013, the 2013 weighted averages shown above reflect the assumptions for the first quarter of 2013. All other non-U.S. plans were remeasured annually, the weighted averages shown above were used to calculate the expense for the full year.

Discount Rate

The discount rates for the U.S. pension and postretirement plans were selected by reference to a Citigroup-specific analysis using each plan’s specific cash flows and compared with high-quality corporate bond indices for reasonableness. Citigroup’s policy is to round to the nearest five hundredths of a percent. The discount rates for the non-U.S. pension and postretirement plans are selected by reference to high-quality corporate bond rates in countries that have developed corporate bond markets. However, where developed corporate bond markets do not exist, the discount rates are selected by reference to local government bond rates with a premium added to reflect the additional risk for corporate bonds in certain countries.

Expected Rate of Return

The Company determines its assumptions for the expected rate of return on plan assets for its U.S. pension and postretirement plans using a “building block” approach, which focuses on ranges of anticipated rates of return for each asset class. A weighted average range of nominal rates is then determined based on target allocations to each asset class. Market performance over a number of earlier years is evaluated covering a wide range of economic conditions to determine whether there are sound reasons for projecting any past trends.

The Company considers the expected rate of return to be a long-term assessment of return expectations and does not anticipate changing this assumption unless there are significant changes in investment strategy or economic conditions. This contrasts with the selection of the discount rate and certain other assumptions, which are reconsidered annually in accordance with generally accepted accounting principles.

The expected rate of return for the U.S. pension and postretirement plans was 7.00% at December 31, 2013, 7.00% at December 31, 2012, and 7.50% at December 31, 2011. The expected return on assets reflects the expected annual appreciation of the plan assets and reduces the Company’s annual pension expense. The expected return on assets is deducted from the sum of service cost, interest cost and other components of pension expense to arrive at the net pension (benefit) expense. Net pension (benefit) expense for the U.S. pension plans for 2013, 2012 and 2011 reflects deductions of $863 million, $897 million and $890 million of expected returns, respectively.

The following table shows the expected rate of return used in determining the Company’s pension expense compared to the actual rate of return on plan assets during 2013, 2012 and 2011 for the U.S. pension and postretirement plans:

	2013		2012		2011
Expected rate of return (1)	7.00	%	7.50	%	7.50	%
Actual rate of return (2)	6.00	%	11.00	%	11.00	%

(1) Effective December 31, 2012, the expected rate of return was changed from 7.50% to 7.00%.

(2) Actual rates of return are presented net of fees.

For the non-U.S. plans, pension expense for 2013 was reduced by the expected return of $396 million, compared with the actual return of $(130) million. Pension expense for 2012 and 2011 was reduced by expected returns of $399 million and $422 million, respectively. Actual returns were lower in 2013, but higher in 2012 and 2011 than the expected returns in those years.

Sensitivities of Certain Key Assumptions

The following tables summarize the effect on pension expense of a one-percentage-point change in the discount rate:

	One-percentage-point increase
In millions of dollars	2013			2012			2011
U.S. plans	$	16		$	18		$	19
Non-U.S. plans	(52		)	(48		)	(57		)

	One-percentage-point decrease
In millions of dollars	2013			2012			2011
U.S. plans	$	(57	)	$	(36	)	$	(34	)
Non-U.S. plans	79			64			70

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.

The following tables summarize the effect on pension expense of a one-percentage-point change in the expected rates of return:

	One-percentage-point increase
In millions of dollars	2013			2012			2011
U.S. plans	$	(123	)	$	(120	)	$	(118	)
Non-U.S. plans	(68		)	(64		)	(62		)

	One-percentage-point decrease
In millions of dollars	2013		2012		2011
U.S. plans	$	123	$	120	$	118
Non-U.S. plans	68		64		62

Health Care Cost-Trend Rate

Assumed health care cost-trend rates were as follows:

	2013		2012
Health care cost increase rate for U.S. plans
Following year	8.00	%	8.50	%
Ultimate rate to which cost increase is assumed to decline	5.00		5.00
Year in which the ultimate rate is reached	2020		2020

A one-percentage-point change in assumed health care cost-trend rates would have the following effects on postretirement expense:

	One- percentage- point increase				One- percentage- point decrease
In millions of dollars	2013		2012		2013			2012
Effect on benefits earned and interest cost for U.S. postretirement plans	$	1	$	2	$	(1	)	$	(1	)
Effect on accumulated postretirement benefit obligation for U.S. postretirement plans	24		44		(19		)	(39		)

Plan Assets

Citigroup’s pension and postretirement plans’ asset allocations for the U.S. plans at December 31, 2013 and 2012, and the target allocations for 2014 by asset category based on asset fair values, are as follows:

	Target asset allocation	U.S. pension assets at December 31,				U.S. postretirement assets at December 31,
Asset category (1)	2014	2013		2012		2013		2012
Equity securities (2)	0 - 30%	19	%	17	%	19	%	17	%
Debt securities	25 - 73	42		45		42		45
Real estate	0 - 7	5		5		5		5
Private equity	0 - 15	11		11		11		11
Other investments	12 - 29	23		22		23		22
Total		100	%	100	%	100	%	100	%

(1) Asset allocations for the U.S. plans are set by investment strategy, not by investment product. For example, private equities with an underlying investment in real estate are classified in the real estate asset category, not private equity.

(2) Equity securities in the U.S. pension and postretirement plans do not include any Citigroup common stock at the end of 2013 and 2012.

Third-party investment managers and advisors provide their services to Citigroup’s U.S. pension and postretirement plans. Assets are rebalanced as Citi’s Pension Plan Investment Committee deems appropriate. Citigroup’s investment strategy, with respect to its assets, is to maintain a globally diversified investment portfolio across several asset classes that, when combined with Citigroup’s contributions to the plans, will maintain the plans’ ability to meet all required benefit obligations.

Citigroup’s pension and postretirement plans’ weighted-average asset allocations for the non-U.S. plans and the actual ranges at the end of 2013 and 2012, and the weighted-average target allocations for 2014 by asset category based on asset fair values are as follows:

	Non-U.S. pension plans
	Weighted-average target asset allocation		Actual range at December 31,		Weighted-average at December 31,
Asset category (1)	2014		2013	2012	2013		2012
Equity securities	19	%	0 - 69%	0 - 63%	20	%	16	%
Debt securities	74		0 - 99	0 - 100	72		72
Real estate	1		0 - 19	0 - 41	1		1
Other investments	6		0 - 100	0 - 100	7		11
Total	100	%			100	%	100	%

	Non-U.S. postretirement plans
	Weighted-average target asset allocation		Actual range at December 31,		Weighted-average at December 31,
Asset category (1)	2014		2013	2012	2013		2012
Equity securities	42	%	0 - 41%	0 - 28%	41	%	28	%
Debt securities	52		51 - 100	46 - 100	51		46
Other investments	6		0 - 8	0 - 26	8		26
Total	100	%			100	%	100	%

(1) Similar to the U.S. plans, asset allocations for certain non-U.S. plans are set by investment strategy, not by investment product.

Fair Value Disclosure

For information on fair value measurements, including descriptions of Level 1, 2 and 3 of the fair value hierarchy and the valuation methodology utilized by the Company, see Note 1 and Note 25 to the Consolidated Financial Statements.

Certain investments may transfer between the fair value hierarchy classifications during the year due to changes in valuation methodology and pricing sources. There were no significant transfers of investments between Level 1 and Level 2 during the years ended December 31, 2013 and 2012.

Plan assets by detailed asset categories and the fair value hierarchy are as follows:

	U.S. pension and postretirement benefit plans (1)
In millions of dollars	Fair value measurement at December 31, 2013
Asset categories	Level 1			Level 2			Level 3		Total
Equity securities
U.S. equity	$	864		$	—		$	—	$	864
Non-U.S. equity	441			—			—		441
Mutual funds	203			—			—		203
Commingled funds	—			895			—		895
Debt securities
U.S. Treasuries	1,112			—			—		1,112
U.S. agency	—			91			—		91
U.S. corporate bonds	—			1,385			—		1,385
Non-U.S. government debt	—			344			—		344
Non-U.S. corporate bonds	—			403			—		403
State and municipal debt	—			137			—		137
Hedge funds	—			2,014			1,180		3,194
Asset-backed securities	—			61			—		61
Mortgage-backed securities	—			64			—		64
Annuity contracts	—			—			91		91
Private equity	—			—			2,106		2,106
Derivatives	8			601			—		609
Other investments	—			100			157		257
Total investments at fair value	$	2,628		$	6,095		$	3,534	$	12,257
Cash and short-term investments	$	107		$	957		$	—	$	1,064
Other investment receivables	—			49			52		101
Total assets	$	2,735		$	7,101		$	3,586	$	13,422
Other investment liabilities	$	(9	)	$	(650	)	$	—	$	(659	)
Total net assets	$	2,726		$	6,451		$	3,586	$	12,763

(1) The investments of the U.S. pension and postretirement benefit plans are commingled in one trust. At December 31, 2013, the allocable interests of the U.S. pension and postretirement benefit plans were 99.7% and 0.3%, respectively.

	U.S. pension and postretirement benefit plans (1)
In millions of dollars	Fair value measurement at December 31, 2012
Asset categories	Level 1			Level 2			Level 3		Total
Equity securities
U.S. equity	$	677		$	—		$	—	$	677
Non-U.S. equity	412			5			—		417
Mutual funds	177			—			—		177
Commingled funds	—			1,132			—		1,132
Debt securities
U.S. Treasuries	1,431			—			—		1,431
U.S. agency	—			112			—		112
U.S. corporate bonds	—			1,397			—		1,397
Non-U.S. government debt	—			387			—		387
Non-U.S. corporate bonds	—			350			—		350
State and municipal debt	—			142			—		142
Hedge funds	—			1,132			1,524		2,656
Asset-backed securities	—			55			—		55
Mortgage-backed securities	—			52			—		52
Annuity contracts	—			—			130		130
Private equity	—			—			2,419		2,419
Derivatives	3			627			—		630
Other investments	—			—			142		142
Total investments at fair value	$	2,700		$	5,391		$	4,215	$	12,306
Cash and short-term investments	$	131		$	906		$	—	$	1,037
Other investment receivables	—			6			24		30
Total assets	$	2,831		$	6,303		$	4,239	$	13,373
Other investment liabilities	$	(10	)	$	(657	)	$	—	$	(667	)
Total net assets	$	2,821		$	5,646		$	4,239	$	12,706

(1) The investments of the U.S. pension and postretirement benefit plans are commingled in one trust. At December 31, 2012, the allocable interests of the U.S. pension and postretirement benefit plans were 99.6% and 0.4%, respectively.

	Non-U.S. pension and postretirement benefit plans
In millions of dollars	Fair value measurement at December 31, 2013
Asset categories	Level 1		Level 2			Level 3		Total
Equity securities
U.S. equity	$	6	$	13		$	—	$	19
Non-U.S. equity	117		292			49		458
Mutual funds	242		3,593			—		3,835
Commingled funds	7		22			—		29
Debt securities
U.S. corporate bonds	—		392			—		392
Non-U.S. government debt	2,559		232			—		2,791
Non-U.S. corporate bonds	110		780			5		895
Hedge funds	—		—			11		11
Mortgage-backed securities	3		1			—		4
Annuity contracts	—		1			32		33
Derivatives	42		—			—		42
Other investments	7		12			202		221
Total investments at fair value	$	3,093	$	5,338		$	299	$	8,730
Cash and short-term investments	$	92	$	4		$	—	$	96
Total assets	$	3,185	$	5,342		$	299	$	8,826
Other investment liabilities	$	—	$	(436	)	$	—	$	(436	)
Total net assets	$	3,185	$	4,906		$	299	$	8,390

	Non-U.S. pension and postretirement benefit plans
In millions of dollars	Fair value measurement at December 31, 2012
Asset categories	Level 1		Level 2		Level 3		Total
Equity securities
U.S. equity	$	12	$	12	$	—	$	24
Non-U.S. equity	88		77		48		213
Mutual funds	31		4,583		—		4,614
Commingled funds	—		26		—		26
Debt securities
U.S. Treasuries	—		1		—		1
U.S. corporate bonds	—		488		—		488
Non-U.S. government debt	1,806		144		4		1,954
Non-U.S. corporate bonds	162		804		4		970
Hedge funds	—		—		16		16
Mortgage-backed securities	—		1		—		1
Annuity contracts	—		5		6		11
Derivatives	—		40		—		40
Other investments	3		9		219		231
Total investments at fair value	$	2,102	$	6,190	$	297	$	8,589
Cash and short-term investments	$	55	$	4	$	3	$	62
Total assets	$	2,157	$	6,194	$	300	$	8,651

Level 3 Roll Forward

The reconciliations of the beginning and ending balances during the period for Level 3 assets are as follows:

In millions of dollars	U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2012		Realized gains (losses)		Unrealized gains (losses)			Purchases, sales, and issuances			Transfers in and/or out of Level 3			Ending Level 3 fair value at Dec. 31, 2013
Hedge funds	$	1,524	$	45	$	69		$	19		$	(477	)	$	1,180
Annuity contracts	130		—		(9		)	(33		)	3			91
Private equity	2,419		264		(10		)	(564		)	(3		)	2,106
Other investments	142		—		7			8			—			157
Total investments	$	4,215	$	309	$	57		$	(570	)	$	(477	)	$	3,534
Other investment receivables	24		—		—			28			—			52
Total assets	$	4,239	$	309	$	57		$	(542	)	$	(477	)	$	3,586

In millions of dollars	U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2011		Realized gains (losses)			Unrealized gains (losses)		Purchases, sales, and issuances			Transfers in and/or out of Level 3			Ending Level 3 fair value at Dec. 31, 2012
Equity securities
U.S. equity	$	51	$	—		$	—	$	—		$	(51	)	$	—
Non-U.S. equity	19		—			8		—			(27		)	—
Debt securities
U.S. corporate bonds	5		—			1		—			(6		)	—
Non-U.S. government debt	—		(1		)	—		1			—			—
Hedge funds	870		(28		)	149		199			334			1,524
Annuity contracts	155		—			6		(31		)	—			130
Private equity	2,474		267			98		(484		)	64			2,419
Other investments	121		—			14		12			(5		)	142
Total investments	$	3,695	$	238		$	276	$	(303	)	$	309		$	4,215
Other investment receivables	221		—			—		—			(197		)	24
Total assets	$	3,916	$	238		$	276	$	(303	)	$	112		$	4,239

In millions of dollars	Non-U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2012		Realized gains (losses)		Unrealized gains (losses)			Purchases, sales, and issuances			Transfers in and/or out of Level 3			Ending Level 3 fair value at Dec. 31, 2013
Equity securities
Non-U.S. equity	$	48	$	—	$	5		$	—		$	(4	)	$	49
Debt securities
Non-U.S. government bonds	4		—		—			—			(4		)	—
Non-U.S. corporate bonds	4		—		(1		)	2			—			5
Hedge funds	16		—		1			(6		)	—			11
Annuity contracts	6		—		3			(1		)	24			32
Other investments	219		—		—			3			(20		)	202
Total investments	$	297	$	—	$	8		$	(2	)	$	(4	)	$	299
Cash and short-term investments	3		—		—			—			(3		)	—
Total assets	$	300	$	—	$	8		$	(2	)	$	(7	)	$	299

In millions of dollars	Non-U.S. pension and postretirement benefit plans
Asset categories	Beginning Level 3 fair value at Dec. 31, 2011		Realized gains (losses)			Unrealized gains (losses)		Purchases, sales, and issuances			Transfers in and/or out of Level 3			Ending Level 3 fair value at Dec. 31, 2012
Equity securities
Non-U.S. equity	$	5	$	—		$	—	$	43		$	—		$	48
Mutual funds	32		—			—		(10		)	(22		)	—
Debt securities
Non-U.S. government bonds	5		—			—		—			(1		)	4
Non-U.S. corporate bonds	3		(3		)	—		2			2			4
Hedge funds	12		—			—		—			4			16
Annuity contracts	—		—			—		1			5			6
Other investments	240		7			14		(23		)	(19		)	219
Total investments	$	297	$	4		$	14	$	13		$	(31	)	$	297
Cash and short-term investments	—		—			—		—			3			3
Total assets	$	297	$	4		$	14	$	13		$	(28	)	$	300

Investment Strategy

The Company’s global pension and postretirement funds’ investment strategies are to invest in a prudent manner for the exclusive purpose of providing benefits to participants. The investment strategies are targeted to produce a total return that, when combined with the Company’s contributions to the funds, will maintain the funds’ ability to meet all required benefit obligations. Risk is controlled through diversification of asset types and investments in domestic and international equities, fixed-income securities and cash and short-term investments. The target asset allocation in most locations outside the U.S. is primarily in equity and debt securities. These allocations may vary by geographic region and country depending on the nature of applicable obligations and various other regional considerations. The wide variation in the actual range of plan asset allocations for the funded non-U.S. plans is a result of differing local statutory requirements and economic conditions. For example, in certain countries local law requires that all pension plan assets must be invested in fixed-income investments, government funds, or local-country securities.

Significant Concentrations of Risk in Plan Assets

The assets of the Company’s pension plans are diversified to limit the impact of any individual investment. The U.S. qualified pension plan is diversified across multiple asset classes, with publicly traded fixed income, hedge funds, publicly traded equity, and private equity representing the most significant asset allocations. Investments in these four asset classes are further diversified across funds, managers, strategies, vintages, sectors and geographies, depending on the specific characteristics of each asset class. The pension assets for the Company’s largest non-U.S. plans are primarily invested in publicly traded fixed income and publicly traded equity securities.

Oversight and Risk Management Practices

The framework for the Company’s pensions oversight process includes monitoring of retirement plans by plan fiduciaries and/or management at the global, regional or country level, as appropriate. Independent risk management contributes to the risk oversight and monitoring for the Company’s U.S. qualified pension plan and largest non-U.S. pension plans. Although the specific components of the oversight process are tailored to the requirements of each region, country and plan, the following elements are common to the Company’s monitoring and risk management process:

· periodic asset/liability management studies and strategic asset allocation reviews;

· periodic monitoring of funding levels and funding ratios;

· periodic monitoring of compliance with asset allocation guidelines;

· periodic monitoring of asset class and/or investment manager performance against benchmarks; and

· periodic risk capital analysis and stress testing.

Estimated Future Benefit Payments

The Company expects to pay the following estimated benefit payments in future years:

	Pension plans				Postretirement benefit plans
In millions of dollars	U.S. plans		Non-U.S. plans		U.S. plans		Non-U.S. plans
2014	$	804	$	382	$	79	$	64
2015	828		359		76		69
2016	830		390		73		74
2017	842		411		70		80
2018	853		437		67		87
2019—2023	4,473		2,699		286		580

Prescription Drugs

In December 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 (Act of 2003) was enacted. The Act of 2003 established a prescription drug benefit under Medicare known as “Medicare Part D,” and a federal subsidy to sponsors of U.S. retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The benefits provided to certain participants are at least actuarially equivalent to Medicare Part D and, accordingly, the Company is entitled to a subsidy.

The expected subsidy reduced the accumulated postretirement benefit obligation (APBO) by approximately $4 million and $93 million as of December 31, 2013 and 2012, respectively, and the postretirement expense by approximately $3 million and $9 million for 2013 and 2012, respectively. The reduction in the expected subsidy was due to the Company’s adoption of the Employee Group Waiver Plan, as described below.

The following table shows the estimated future benefit payments without the effect of the subsidy and the amounts of the expected subsidy in future years:

	Expected U.S. postretirement benefit payments
In millions of dollars	Before Medicare Part D subsidy		Medicare Part D subsidy		After Medicare Part D subsidy
2014	$	79	$	—	$	79
2015	76		—		76
2016	73		—		73
2017	70		—		70
2018	67		—		67
2019—2023	288		2		286

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the Act of 2010) were signed into law in the U.S. in March 2010. One provision that impacted Citigroup was the elimination of the tax deductibility for benefits paid that are related to the Medicare Part D subsidy, starting in 2013. Citigroup was required to recognize the full accounting impact in 2010, the period in which the Act of 2010 was signed. As a result, there was a $45 million reduction in deferred tax assets with a corresponding charge to earnings from continuing operations.

Certain provisions of the Act of 2010 improved the Medicare Part D option known as the Employer Group Waiver Plan (EGWP) with respect to the Medicare Part D subsidy. The EGWP provides prescription drug benefits that are more cost effective for Medicare-eligible participants and large employers. Effective April 1, 2013, the Company began sponsoring and implementing an EGWP for eligible retirees. The expected Company subsidy received under EGWP during 2013 was $10.5 million.

The other provisions of the Act of 2010 are not expected to have a significant impact on Citigroup’s pension and postretirement plans.

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.

As of December 31, 2013 and 2012, the plans’ funded status recognized in the Company’s Consolidated Balance Sheet was $(252) million and $(501) million, respectively. The amounts recognized in Accumulated other comprehensive income (loss) as of December 31, 2013 and 2012 were $46 million and $(185) million, respectively. During 2013, the Company made changes to its postemployment plans that limit the period for which future disabled employees are eligible for continued company subsidized medical benefits. These changes resulted in the decreases in the Company’s obligations, as shown above.

The following table summarizes the components of net expense recognized in the Consolidated Statement of Income for the Company’s U.S. postemployment plans.

	Net expense
In millions of dollars	2013			2012		2011
Service related expense
Service cost	$	20		$	22	$	16
Interest cost	10			13		12
Prior service cost (benefit)	(3		)	7		7
Net actuarial loss	17			13		9
Total service related expense	$	44		$	55	$	44
Non-service related expense (benefit)	$	(14	)	$	24	$	23
Total net expense	$	30		$	79	$	67

The following table summarizes certain assumptions used in determining the postemployment benefit obligations and net benefit expenses for the Company’s U.S. postemployment plans.

	2013		2012
Discount rate	4.05	%	3.10	%
Health care cost increase rate
Following year	8.00	%	8.50	%
Ultimate rate to which cost increase is assumed to decline	5.00		5.00
Year in which the ultimate rate is reached	2020		2020

Early Retiree Reinsurance Program

The Company participates in the Early Retiree Reinsurance Program (ERRP), which provides federal government reimbursement to eligible employers to cover a portion of the health benefit costs associated with early retirees. Of the $8 million the Company received in reimbursements, approximately $3 million and $5 million were used to reduce the health benefit costs for certain eligible employees for the years ended December 31, 2013 and 2012, 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 received matching contributions of up to 6% of their eligible compensation for 2013 and 2012, 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 $394 million, $384 million and $374 million in 2013, 2012 and 2011, respectively.