PENSION AND OTHER RETIREMENT BENEFITS

9 Months Ended

Sep. 30, 2012

PENSION AND OTHER RETIREMENT BENEFITS

NOTE 12. PENSION AND OTHER RETIREMENT BENEFITS

Moody’s maintains funded and unfunded noncontributory Defined Benefit Pension Plans. The U.S. DBPPs provide defined benefits using a cash balance formula based on years of service and career average salary for its employees or final average pay for selected executives. The Company also provides certain healthcare and life insurance benefits for retired U.S. employees. The retirement healthcare plans are contributory with participants’ contributions adjusted annually; the life insurance plans are noncontributory. Moody’s funded and unfunded U.S. pension plans, the U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the Retirement Plans.

Effective January 1, 2008, the Company no longer offers DBPPs to U.S. employees hired or rehired on or after January 1, 2008. New U.S. employees will instead receive a retirement contribution of similar benefit value under the Company’s Profit Participation Plan. Current participants of the Company’s DBPPs continue to accrue benefits based on existing plan formulas.

The components of net periodic benefit expense related to the Retirement Plans are as follows:

	Three Months Ended September 30,
	Pension Plans						Other Retirement Plans
	2012			2011			2012		2011
Components of net periodic expense
Service cost	$	4.7		$	3.7		$	0.4	$	0.3
Interest cost		3.3			3.3			0.1		0.2
Expected return on plan assets		(3.1	)		(3.0	)		—		—
Amortization of net actuarial loss from earlier periods		2.2			1.2			—		—
Amortization of net prior service costs from earlier periods		0.2			0.2			0.1		0.1
Settlement loss		—			1.6			—		—
Net periodic expense	$	7.3		$	7.0		$	0.6	$	0.6
	Nine Months Ended September 30,
	Pension Plans						Other Retirement Plans
	2012			2011			2012		2011
Components of net periodic expense
Service cost	$	14.2		$	11.3		$	1.1	$	0.9
Interest cost		9.8			9.9			0.5		0.6
Expected return on plan assets		(9.3	)		(9.0	)		—		—
Amortization of net actuarial loss from earlier periods		6.8			3.7			—		—
Amortization of net prior service costs from earlier periods		0.5			0.5			0.2		0.2
Settlement loss		—			1.6			—		—
Net periodic expense	$	22.0		$	18.0		$	1.8	$	1.7

The Company contributed $17.8 million to its U.S. funded pension plan and made payments of $1.9 million related to its unfunded U.S. DBPPs and $0.4 million to its U.S. other retirement plans, respectively during the nine months ended September 30, 2012. The Company presently anticipates making additional payments of $1.4 million related to its unfunded U.S. DBPPs and $0.2 million to its U.S. other retirement plans during the remainder of 2012.