PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of net periodic benefit costs (credits) are:



	PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2013			SEPTEMBER 2012			SEPTEMBER 2013			SEPTEMBER 2012
Service cost	$	16		$	13		$	48		$	39
Interest cost	61			65			183			196
Expected return on plan assets	(109		)	(106		)	(329		)	(316		)
Amortization of actuarial loss	55			44			166			131
Amortization of prior service cost	2			2			5			6
Total net periodic benefit cost	$	25		$	18		$	73		$	56



	OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	SEPTEMBER 2013			SEPTEMBER 2012			SEPTEMBER 2013			SEPTEMBER 2012
Service cost	$	—		$	—		$	1		$	1
Interest cost	3			4			9			11
Amortization of actuarial loss	4			3			11			10
Amortization of prior service credit	(5		)	(6		)	(17		)	(121		)
Other	—			—			2			4
Total net periodic benefit cost (credit)	$	2		$	1		$	6		$	(95	)

During fourth quarter 2011, we ratified amendments to our postretirement medical and life insurance benefit plans for U.S. salaried employees that reduced or eliminated certain benefits that were available to both past and present employees. The company recognized a gain of $103 million in year-to-date 2012 due to these benefit changes. This gain is included in other operating income and reflected in the amortization of prior service credit in the table above. As of the end of second quarter 2012, the gain for the fourth quarter amendments had been fully recognized.

FAIR VALUE OF PENSION PLAN ASSETS

We estimate the fair value of pension plan assets based upon the information available during the year-end reporting process. In some cases, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We revise the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in audited financial statements received after we have filed our Annual Report on Form 10-K. During second quarter 2013, we recorded an increase in the fair value of the pension assets of $56 million and an increase to the projected benefit obligation of $55 million, as a result of changes in the census data. The net effect was a $1 million increase in the funded status as of December 31, 2012.

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

We expect to make approximately $79 million of required contributions to our Canadian registered and nonregistered pension plans in 2013. The decrease in the expectation was the result of the company electing to apply for Alberta Funding Relief effective December 31, 2012, for the plans registered in that province.

We also expect that in 2013 we will:


•	make benefit payments of $19 million on behalf of our U.S. nonqualified pension plans and


•	make benefit payments of $37 million on behalf of our U.S. and Canadian other postretirement plans.

We do not anticipate making a contribution to our U.S. qualified pension plan for 2013.