Employee Benefit Plans

9 Months Ended

Sep. 30, 2011

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company sponsors defined benefit pension plans principally for salaried, management personnel.  The plans provide eligible employees with retirement benefits based predominantly on years of service and compensation rates near retirement.  For employees hired after December 31, 2002, benefits are determined based on a cash balance formula, which provides benefits by utilizing interest and pays credits based upon age, service and compensation.  In addition to these plans, the Company sponsors a self-insured post-retirement medical plan and a life insurance plan that provide benefits to full-time, salaried, management employees, hired prior to January 1, 2003, upon their retirement if certain eligibility requirements are met.  Prior to 2011, the post-retirement medical plan was partially funded by all participating retirees, with retiree contributions adjusted annually.  Beginning in 2011, Medicare-eligible retirees will be covered by a health reimbursement arrangement, which is an employer-funded account that can be used for reimbursement of eligible medical expenses. Non-Medicare eligible retirees will continue to be covered by the existing self-insured program.  The life insurance plan is non-contributory.

NOTE 6. Employee Benefit Plans, continued

The Company engages independent actuaries to compute the amounts of liabilities and expenses relating to these plans subject to the assumptions that the Company selects.  These amounts are reviewed by management.  The following table describes the components of expense / (income) related to net benefit expense:

	Pension Benefits
(Dollars in millions)	Third Quarters						Nine Months
	2011			2010			2011			2010
Service Cost	$	10		$	10		$	30		$	31
Interest Cost	30			30			90			91
Expected Return on Plan Assets	(39		)	(42		)	(118		)	(124		)
Amortization of Net Loss	18			15			54			44
Total Expense	$	19		$	13		$	56		$	42
	Other Post-retirement Benefits
(Dollars in millions)	Third Quarters						Nine Months
	2011			2010			2011			2010
Service Cost	$	1		$	2		$	3		$	4
Interest Cost	4			5			10			14
Amortization of Net Loss	2			1			5			5
Amortization of Prior Service Cost	—			—			(1		)	—
Total Expense	$	7		$	8		$	17		$	23

Qualified pension plan obligations are funded in accordance with prescribed regulatory requirements and with an objective of meeting minimum funding requirements necessary to avoid restrictions on flexibility of plan operation and benefit payments.  At this time, the Company anticipates that no contributions to its qualified pension plans will be required in 2011.  For further details, see Note 8, Employee Benefit Plans, in CSX's most recent annual report on Form 10-K.