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Employee Benefit Plans
 75 Months Ended
Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans

E. Employee Benefit Plans

Net periodic defined benefit pension and other postretirement benefit costs include the following:

 

     Three Months Ended December 31  
     2014     2013     2014      2013  
     Pension Benefits     Postretirement Benefits  
     U.S.     Foreign     U.S.     Foreign     U.S.     Foreign      U.S.     Foreign  
     (Dollars in millions)  

Service cost

    $ —        $ 2     $ 1     $ 2     $ —        $ —         $ —        $ —     

Interest cost

      2       3       2       4       —          —           1       —     

Expected return on plan assets

      (3 )      (4 )      (3 )      (5 )      —          —           —          —     

Amortization of prior service credit

      —          —          —          —          (1 )      —           (1 )      —     

Amortization of actuarial loss

      —          1       —          1       —          —           —          —     

Settlement costs

      —          18       —          —          —          —           —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net periodic benefit cost (credit)

    $ (1 )    $ 20     $ —        $ 2     $ (1 )    $ —         $ —        $ —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Settlement of employee benefit plan

Effective October 1, 2014, the Company transferred the defined benefit obligations and pension plan assets in one of its foreign defined benefit plans to a multi-employer plan. This decision effectively moves the administrative, asset custodial, asset investment, actuarial, communication and benefit payment obligations to the multi-employer fund administrator. Cabot is required to make contributions to the multi-employer plan which is over 80% funded. Contributed assets by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. As a result of the transfer, a pre-tax charge of $18 million has been recorded in the period ended December 31, 2014 as reflected in Settlement costs in the table above. The pre-tax charge consists of $27 million released from AOCI and $2 million of employer contributions at the time of the settlement, partially offset by an $11 million release of the pension liability. The settlement charge has been recorded primarily in Cost of sales in the Consolidated Statements of Income.