Benefit Plans

Prior to the Separation from Pfizer, employees who met certain eligibility requirements participated in various defined benefit pension plans and postretirement plans administered and sponsored by Pfizer. Effective December 31, 2012, our employees ceased to participate in the Pfizer U.S. qualified defined benefit and U.S. retiree medical plans, and liabilities associated with our employees under these plans were retained by Pfizer. Pfizer is continuing to credit certain employees' service with Zoetis generally through December 31, 2017 (or termination of employment from Zoetis, if earlier) for certain early retirement benefits with respect to Pfizer's U.S. defined benefit pension and retiree medical plans. Pension and postretirement benefit expense associated with the extended service for certain employees in the U.S. plans totaled approximately $1 million in each three month period ended June 28, 2015, and June 29, 2014, respectively, and approximately $3 million in each six month period ended June 28, 2015, and June 29, 2014, respectively.

As part of the Separation (see Note 2. The Separation and Transactions and Agreements with Pfizer), certain separation adjustments were made to transfer the assets and liabilities of certain international defined benefit pension plans from Pfizer to Zoetis. During the first quarter of 2014, our pension plan in Japan was transferred to us from Pfizer. The net pension obligation (approximately $2 million) and the related accumulated other comprehensive loss (approximately $2 million, net of tax) associated with this plan were recorded. During the remainder of 2014, our pension plans in Australia, Belgium and Switzerland were transferred to us. Prior to the Separation and transfer, these benefit plans were accounted for as multi-employer plans. There were no transfers during the first six months of 2015. As of June 28, 2015, there existed a net liability of $1 million for the expected transfer of the Philippines pension plan which is expected to occur in 2015.

The following table provides the net periodic benefit cost associated with dedicated pension plans (including those transferred to us):



	Three Months Ended					Six Months Ended
	June 28,			June 29,		June 28,			June 29,
(MILLIONS OF DOLLARS)	2015			2014		2015			2014
Service cost	$	2		$	1	$	4		$	2
Interest cost	1			—		2			1
Expected return on plan assets	(1		)	—		(1		)	—
Amortization of net actuarial loss	1			—		1			—
Settlement loss^(a)	—			—		—			4
Net periodic benefit cost	$	3		$	1	$	6		$	7


^(a)	Includes the first quarter 2014 settlement charge of approximately $4 million ($3 million, net of tax) associated with the 2012 sale of our Netherlands manufacturing facility.

Total company contributions to the dedicated international pension plans were $1 million and $3 million for the three and six months ended June 28, 2015, respectively, and $0 million and $2 million for the three and six months ended June 29, 2014, respectively. We expect to contribute a total of approximately $7 million to these plans in 2015.

Pension expense associated with international benefit plans accounted for as multi-employer plans was approximately $2 million and $3 million for the three months and six months ended June 29, 2014, respectively. Contributions to these plans were approximately $1 million and $2 million for the three and six months ended June 29, 2014, respectively. There were no plans accounted for as multi-employer plans in 2015.