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. For the company’s main U.S. medical plan, the increase to the

pre-Medicare 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 2018 and 2017 are as follows:



	Three Months Ended June 30						Six Months Ended June 30
	2018			2017			2018			2017
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	120		$	122		$	240		$	244
Interest cost	93			92			185			183
Expected return on plan assets	(159		)	(149		)	(318		)	(298		)
Amortization of prior service credits	—			(1		)	1			(2		)
Amortization of actuarial losses	76			85			152			170
Settlement losses	66			78			132			156
Total United States	196			227			392			453
International
Service cost	33			39			73			76
Interest cost	60			57			106			110
Expected return on plan assets	(65		)	(59		)	(131		)	(117		)
Amortization of prior service costs	4			3			6			6
Amortization of actuarial losses	6			13			17			22
Settlement losses	—			—			—			—
Total International	38			53			71			97
Net Periodic Pension Benefit Costs	$	234		$	280		$	463		$	550
Other Benefits*
Service cost	$	8		$	8		$	21		$	16
Interest cost	27			25			48			48
Amortization of prior service costs	(7		)	(7		)	(14		)	(14		)
Amortization of actuarial losses	3			(2		)	7			(3		)
Net Periodic Other Benefit Costs	$	31		$	24		$	62		$	47

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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.

Through June 30, 2018, a total of $531 million was contributed to employee pension plans (including $448 million to the U.S. plans). Total contributions for the full year are currently estimated to be $1.05 billion ($800 million for the U.S. plans and $250 million for the international 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 six months of 2018, the company contributed $85 million to its OPEB plans. The company anticipates contributing approximately $89 million during the remainder of 2018.