Postretirement Benefits

A. Pension and postretirement benefit costs

In February 2012, we announced the closure of the Electro-Motive Diesel facility located in London, Ontario. As a result of the closure, we recognized a $37 million other postretirement benefits curtailment gain. This excludes a $21 million loss of a third-party receivable for other postretirement benefits that was eliminated due to the closure. In addition, a $10 million special termination benefit expense was recognized related to statutory pension benefits required to be paid to certain affected employees. As a result, a net gain of $6 million related to the facility closure was recognized in Other operating (income) expenses in the Consolidated Statement of Results of Operations for the three months ended March 31, 2012.



(Millions of dollars)	U.S. Pension Benefits						Non-U.S. Pension Benefits						Other Postretirement Benefits
	March 31,						March 31,						March 31,
	2013			2012			2013			2012			2013			2012
For the three months ended:
Components of net periodic benefit cost:
Service cost	$	49		$	46		$	31		$	28		$	24		$	24
Interest cost	145			154			43			45			49			55
Expected return on plan assets	(208		)	(203		)	(59		)	(54		)	(14		)	(16		)
Amortization of:
Transition obligation (asset)	—			—			—			—			1			1
Prior service cost (credit) ¹	4			5			—			—			(18		)	(17		)
Net actuarial loss (gain) ¹	136			124			33			24			27			25
Net periodic benefit cost	126			126			48			43			69			72
Curtailments, settlements and special termination benefits ²	—			—			—			10			—			(40		)
Total cost included in operating profit	$	126		$	126		$	48		$	53		$	69		$	32

Weighted-average assumptions used to determine net cost:
Discount rate	3.7		%	4.3		%	3.7		%	4.3		%	3.7		%	4.3		%
Expected return on plan assets	7.8		%	8.0		%	6.7		%	7.1		%	7.8		%	8.0		%
Rate of compensation increase	4.5		%	4.5		%	3.9		%	3.9		%	4.4		%	4.4		%

Prior service cost (credit) and net actuarial loss (gain) for both pension and other postretirement benefits are generally amortized using the straight-line method over the average remaining service period to the full retirement eligibility date of employees expected to receive benefits from the plan. For pension and other postretirement benefit plans in which all or almost all of the plan's participants are inactive or fully eligible for benefits under the plan, respectively, prior service cost (credit) and net actuarial loss (gain) are amortized using the straight-line method over the remaining life expectancy of those participants.


²	Curtailments, settlements and special termination benefits were recognized in Other operating (income) expenses in the Consolidated Statement of Results of Operations.

We made $142 million of contributions to our pension plans during the three months ended March 31, 2013. We currently anticipate full-year 2013 contributions of approximately $480 million, all of which are required. We made $174 million of contributions to our pension plans during the three months ended March 31, 2012.

B. Defined contribution benefit costs

Total company costs related to our defined contribution plans were as follows:



	Three Months Ended March 31,
(Millions of dollars)	2013		2012
U.S. Plans	$	83	$	101
Non-U.S. Plans	14		14
	$	97	$	115