14. Employee Benefits

Pension Plans

Effective December 31, 2009, we amended our cash balance pension plan and other defined benefit plans to freeze all benefit accruals and close the plans to new employees. We will continue to credit participants’ existing account balances for interest until they receive their plan benefits. We changed certain pension plan assumptions after freezing the plans. As part of the acquisition of First Niagara, Key also obtained two frozen defined benefit plans sponsored by First Niagara, both of which provide benefits based upon length of service and compensation levels. Effective September 30, 2016, the two First Niagara plans merged into another defined benefit plan maintained by Key to form the KeyCorp Consolidated Cash Balance Plan. Effective December 31, 2016, our original cash balance pension plan merged into the KeyCorp Consolidated Cash Balance Plan.

The components of net pension cost (benefit) for all funded and unfunded plans are as follows:



	Three months ended September 30,						Nine months ended September 30,
in millions	2017			2016			2017			2016
Interest cost on PBO	$	12		$	10		$	36		$	31
Expected return on plan assets	(17		)	(13		)	(51		)	(39		)
Amortization of losses	4			4			12			12
Net pension cost	$	(1	)	$	1		$	(3	)	$	4

Other Postretirement Benefit Plans

We sponsor a retiree healthcare plan in which all employees age 55 with 5 years of service (or employees age 50 with 15 years of service who are terminated under conditions that entitle them to a severance benefit) are eligible to participate. Participant contributions are adjusted annually. Key may provide a subsidy toward the cost of coverage for certain employees hired before 2001 with a minimum of 15 years of service at the time of termination. We use a separate VEBA trust to fund the retiree healthcare plan. Effective November 29, 2016, an unfunded retiree welfare plan previously sponsored by First Niagara merged into our current retiree healthcare plan.

The components of net postretirement benefit cost for all funded and unfunded plans are as follows:



	Three months ended September 30,						Nine months ended September 30,
in millions	2017			2016			2017			2016
Service Cost	—			$	1		—			$	1
Interest cost on APBO	$	1		—			$	1		2
Expected return on plan assets	(1		)	—			(1		)	(2		)
Amortization of unrecognized prior service credit	—			(1		)	—			(1		)
Net postretirement benefit cost	—			—			—			—