Benefit Plans:

Pension coverage for employees of PMI’s subsidiaries is provided, to the extent deemed appropriate, through separate plans, many of which are governed by local statutory requirements. In addition, PMI provides health care and other benefits to substantially all U.S. retired employees and certain non-U.S. retired employees. In general, health care benefits for non-U.S. retired employees are covered through local government plans.

Pension Plans

Components of Net Periodic Benefit Cost

Net periodic pension cost consisted of the following:




	U.S. Plans						Non-U.S. Plans
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
(in millions)	2013			2012			2013			2012
Service cost	$	5		$	5		$	190		$	143
Interest cost	12			12			126			142
Expected return on plan assets	(11		)	(11		)	(257		)	(243		)
Amortization:
Net loss	8			7			151			92
Prior service cost	1			1			7			8
Net transition obligation	—			—			1			1
Net periodic pension cost	$	15		$	14		$	218		$	143



	U.S. Plans						Non-U.S. Plans
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
(in millions)	2013			2012			2013			2012
Service cost	$	1		$	1		$	63		$	47
Interest cost	4			4			42			46
Expected return on plan assets	(3		)	(3		)	(84		)	(81		)
Amortization:
Net loss	2			2			49			30
Prior service cost	—			—			2			4
Net transition obligation	—			—			—			1
Net periodic pension cost	$	4		$	4		$	72		$	47

Employer Contributions

PMI makes, and plans to make, contributions, to the extent that they are tax deductible and to meet specific funding requirements of its funded U.S. and non-U.S. plans. Employer contributions of $82 million were made to the pension plans during the nine months ended September 30, 2013. Currently, PMI anticipates making additional contributions during the remainder of 2013 of approximately $138 million to its pension plans, based on current tax and benefit laws. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest rates.