Pension and Postretirement Plans

3 Months Ended

Mar. 31, 2012

Pension and Postretirement Plans

Pension and Postretirement Plans

11.Pension and Postretirement Plans

As part of the merger with Nalco, the company assumed sponsorship of the Nalco qualified and non-qualified pension and other postretirement benefit plans.

The company has non-contributory qualified defined benefit pension plans covering most of its U.S. employees. The company also has U.S. non-contributory non-qualified defined benefit plans, which provide for benefits to employees in excess of limits permitted under its U.S. pension plans. Various international subsidiaries also have defined benefit pension plans. The company provides postretirement health care benefits to certain U.S. employees.

The components of net periodic pension and postretirement health care benefit costs for the first quarter ended March 31 are as follows:

													U.S.
							International						Postretirement
	U.S. Pension						Pension						Health Care
(millions)	2012			2011			2012			2011			2012			2011
Service cost	$	12.6		$	11.7		$	7.3		$	5.6		$	1.3		$	0.5
Interest cost on benefit obligation	22.3			15.3			11.9			6.8			3.2			2.1
Expected return on plan assets	(31.8		)	(24.7		)	(10.5		)	(5.5		)	(0.3		)	(0.4		)
Recognition of net actuarial loss	11.3			8.0			1.0			1.4			0.1			0.1
Amortization of prior service cost (benefit)	(1.0		)	(1.1		)	(0.1		)	—			—			—
	$	13.4		$	9.2		$	9.6		$	8.3		$	4.3		$	2.3

Based on the plan asset values as of December 31, 2011, the company is required to make contributions of $38 million to its Nalco U.S. pension plan during 2012, of which $8 million was funded in the first quarter of 2012, with the remaining $30 million expected to be contributed during the remainder of 2012. In April 2012, subsequent to the end of the first quarter, the company made a $150 million voluntary contribution to its U.S. pension plans. In the first quarter of 2011, the company made a $100 million voluntary contribution to the U.S. pension plan.

During the first quarter of 2012, the company made payments of $3 million to its U.S. non-contributory non-qualified defined benefit plans, and estimates that it will make payments of approximately $8 million more to such plans during the remainder of 2012.

The company contributed $11 million to its international pension benefit plans during the first quarter of 2012. The company currently estimates that it will contribute approximately $34 million more to the international pension benefit plans during the remainder of 2012.

During the first quarter of 2012, the company contributed $4 million to its U.S. postretirement health care benefit plans, and estimates that it will contribute approximately $11 million more to such plans during the remainder of 2012.