PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

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



	PENSION
	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2016			MARCH 2015
Service cost	$	13		$	15
Interest cost	68			65
Expected return on plan assets	(123		)	(118		)
Amortization of actuarial loss	38			44
Amortization of prior service cost	1			1
Accelerated pension costs included in Plum Creek merger-related costs (Note 15)	5			—
Total net periodic benefit cost (credit)	$	2		$	7



	OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 2016			MARCH 2015
Interest cost	$	2		$	3
Amortization of actuarial loss	2			2
Amortization of prior service credit	(2		)	(2		)
Total net periodic benefit cost	$	2		$	3

ASSUMED PLANS FROM MERGER WITH PLUM CREEK

Upon our merger with Plum Creek, we assumed one qualified pension plan and two non-qualified pension plans. All active participants in these plans became fully vested and the plans were frozen as of February 19, 2016. The cumulative funded status of the assumed plans as of February 19, 2016 was a net liability of $62 million.

The expected return on assets for the qualified plan assumed is 7 percent. Assets of $47 million related to the non-qualified plans are held in a grantor trust and are subject to the claims of creditors in the event of bankruptcy. As a result, these are not considered plan assets and have not been netted against the non-qualified pension liability. These assets are included in "Other assets" in our Consolidated Balance Sheet.

During the first quarter, we recognized $5 million of pension benefit costs from change in control provisions for certain Plum Creek executives. These enhanced pension benefits were triggered by changes in control and retention decisions made after the completion of the merger (see Note 15: Charges for Integration and Restructuring, Closures and Impairments).

FAIR VALUE OF PENSION PLAN ASSETS AND OBLIGATION

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015, the value reported for our pension plan assets at the end of 2015 was estimated. Additional information regarding the year-end values generally becomes available to us during the first half of the following year. We expect to complete the valuation of our pension plan assets during second quarter 2016. The final adjustments could affect net pension periodic benefit cost.

Consistent with accounting for the merger as the acquirer in a business combination (see Note 3: Merger with Plum Creek), pension assets and benefit obligations were remeasured to reflect their fair value as of the date of the acquisition. This included updating asset values, updating discount rates to reflect market conditions as of the date of the merger, and freezing benefit accruals. The fair value of these items as of February 19, 2016 were as follows:


•	$137 million qualified pension plan assets


•	$149 million qualified pension plan projected benefit obligation


•	$50 million non-qualified pension plan projected benefit obligation

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

In 2016 we expect to:


•	be required to contribute approximately $16 million for our Canadian registered plan;


•	be required to contribute or make benefit payments for our Canadian nonregistered plans of $3 million;


•	make benefit payments of $52 million for our U.S. nonqualified pension plans, including $33 million of benefit payments for plans assumed from Plum Creek to be paid out of assets held in grantor trusts; and


•	make benefit payments of $22 million for our U.S. and Canadian other postretirement plans.

We do not anticipate making a contribution to our U.S. qualified pension plans for 2016.