Employee Benefits

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

Employee Benefits

Chevron has defined benefit pension plans for many employees. The company typically prefunds defined benefit plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the United States, all qualified plans are subject to the Employee Retirement Income Security Act (ERISA) minimum funding standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding requirements under laws and regulations because contributions to these pension plans may be less economic and investment returns may be less attractive than the company’s other investment alternatives.

The company also sponsors other postretirement (OPEB) plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and the retirees share the costs. Medical coverage for Medicare-eligible retirees in the company’s main U.S. medical plan is secondary to Medicare (including Part D) and the increase to the company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company.

The components of net periodic benefit costs for 2013 and 2012 are as follows:

	Three Months Ended March 31
	2013			2012
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	124		$	113
Interest cost	118			109
Expected return on plan assets	(175		)	(159		)
Amortization of prior service credits	—			(2		)
Amortization of actuarial losses	121			118
Settlement losses	57			74
Total United States	245			253
International
Service cost	48			44
Interest cost	77			79
Expected return on plan assets	(68		)	(66		)
Amortization of prior service costs	5			5
Amortization of actuarial losses	36			33
Total International	98			95
Net Periodic Pension Benefit Costs	$	343		$	348
Other Benefits*
Service cost	$	18		$	15
Interest cost	40			39
Amortization of prior service credits	(12		)	(18		)
Amortization of actuarial losses	13			15
Settlement gains	—			(26		)
Net Periodic Other Benefit Costs	$	59		$	25

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* Includes costs for U.S. and international OPEB plans. Obligations for plans outside the United States are not significant relative to the company’s total OPEB obligation.

The company has estimated it would contribute $1.0 billion to employee pension plans during 2013 (composed of $650 million for the U.S. plans and $350 million for the international plans). Through March 31, 2013, a total of $238 million was contributed (including $196 million to the U.S. plans). Actual contribution amounts are dependent upon plan investment returns, changes in pension obligations, regulatory requirements and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.

During the first three months of 2013, the company contributed $51 million to its OPEB plans. The company anticipates contributing approximately $177 million during the remainder of 2013.