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Employee Benefits
6 Months Ended
Jun. 30, 2011
Employee Benefits [Abstract]  
Employee Benefits
 
Note 8.  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 2011 and 2010 are as follows:
 
                                 
    Three Months Ended
    Six Months Ended
 
    June 30     June 30  
    2011     2010     2011     2010  
    (Millions of dollars)  
 
Pension Benefits
                               
United States
                               
Service cost
  $ 93     $ 84     $ 187     $ 168  
Interest cost
    115       121       231       243  
Expected return on plan assets
    (153 )     (134 )     (306 )     (269 )
Amortization of prior service credits
    (2 )     (2 )     (4 )     (4 )
Amortization of actuarial losses
    78       79       155       159  
Settlement losses
    53       55       144       110  
                                 
Total United States
    184       203       407       407  
                                 
International
                               
Service cost
    43       40       88       76  
Interest cost
    80       79       162       152  
Expected return on plan assets
    (66 )     (62 )     (137 )     (120 )
Amortization of prior service costs
    6       6       12       11  
Amortization of actuarial losses
    30       26       56       50  
Curtailment losses
    9             36        
                                 
Total International
    102       89       217       169  
                                 
Net Periodic Pension Benefit Costs
  $ 286     $ 292     $ 624     $ 576  
                                 
Other Benefits*
                               
Service cost
  $ 16     $ 9     $ 30     $ 19  
Interest cost
    45       43       90       86  
Amortization of prior service credits
    (18 )     (19 )     (36 )     (37 )
Amortization of actuarial losses
    15       7       31       13  
                                 
Net Periodic Other Benefit Costs
  $ 58     $ 40     $ 115     $ 81  
                                 
 
 
Includes costs for U.S. and international OPEB plans. Obligations for plans outside the U.S. are not significant relative to the company’s total OPEB obligation.
 
At the end of 2010, the company estimated it would contribute $950 million to employee pension plans during 2011 (composed of $650 million for the U.S. plans and $300 million for the international plans). Through June 30, 2011, a total of $557 million was contributed (including $374 million to the U.S. plans). In July 2011, the company contributed $750 million to the U.S. plans. Total contributions for the full year are currently estimated to be $1.45 billion ($1.15 billion for the U.S. plans and $300 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 2011, the company contributed $99 million to its OPEB plans. The company anticipates contributing about $126 million during the remainder of 2011.