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 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 employee benefit (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 2014 and 2013 are as follows:



	Three Months Ended September 30						Nine Months Ended September 30
	2014			2013			2014			2013
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	113		$	124		$	338		$	371
Interest cost	124			117			371			353
Expected return on plan assets	(197		)	(175		)	(591		)	(525		)
Amortization of prior service (credits) costs	(3		)	—			(7		)	1
Amortization of actuarial losses	52			121			157			364
Settlement losses	48			57			114			171
Total United States	137			244			382			735
International
Service cost	46			48			143			145
Interest cost	84			77			257			236
Expected return on plan assets	(75		)	(68		)	(227		)	(204		)
Amortization of prior service costs	6			6			16			16
Amortization of actuarial losses	23			35			74			110
Total International	84			98			263			303
Net Periodic Pension Benefit Costs	$	221		$	342		$	645		$	1,038
Other Benefits*
Service cost	$	13		$	13		$	38		$	49
Interest cost	37			32			112			112
Amortization of prior service costs (credits)	3			(12		)	10			(37		)
Amortization of actuarial losses	2			13			5			40
Net Periodic Other Benefit Costs	$	55		$	46		$	165		$	164

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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.

At the end of 2013, the company estimated it would contribute $700 million to employee pension plans during 2014 (composed of $350 million for the U.S. plans and $350 million for the international plans). Through September 30, 2014, a total of $227 million was contributed (including $84 million to the U.S. plans). Total contributions for the full year are currently estimated to be $400 million ($100 million for the U.S. plans and $300 million for the international plans). The company anticipates it will not make contributions to the primary U.S. pension plan for the remainder of 2014. 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 nine months of 2014, the company contributed $152 million to its OPEB plans. The company anticipates contributing approximately $63 million during the remainder of 2014.