PENSION AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Jan. 30, 2022

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

(7)  Pension and Other Postretirement Benefits

The Company has several defined benefit pension plans and postretirement benefit (OPEB) plans, primarily health care and life insurance plans, covering its U.S. employees and employees in certain foreign countries.

The components of net periodic pension cost consisted of the following in millions of dollars:

	Three Months Ended
	January 30		January 31
	2022		2021
Service cost	$	85	$	85
Interest cost		77		69
Expected return on plan assets		(182)		(200)
Amortization of actuarial loss		39		63
Amortization of prior service cost		7		3
Settlements		1		13
Net cost	$	27	$	33

The components of net periodic OPEB cost consisted of the following in millions of dollars:

	Three Months Ended
	January 30		January 31
	2022		2021
Service cost	$	12	$	12
Interest cost		26		26
Expected return on plan assets		(28)		(19)
Amortization of actuarial loss		1		7
Amortization of prior service credit		(1)		(1)
Net cost	$	10	$	25

The components of net periodic pension and OPEB costs excluding the service cost component are included in the line item “Other operating expenses” in the statement of consolidated income. Overall pension and OPEB net costs decreased from the prior year due to reduced amortization of actuarial losses, partially offset by the impacts of the U.S. hourly pension plan remeasurement.

On November 17, 2021, employees represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) approved a new collective bargaining agreement. In the first quarter of 2022, the Company remeasured the U.S. hourly pension plan due to the new collective bargaining agreement, which decreased the plan’s funded status by approximately $495 million and will increase pension expense in 2022 by nearly $80 million. For the first quarter of 2022, the remeasurement increased pension expense by $14 million, with $6 million negatively impacting operating profit.

During the first three months of 2022, the Company contributed $18 million to its pension plans and $1,051 million to its OPEB plans. The OPEB contributions include a voluntary contribution of $1,000 million to a U.S. plan made on November 30, 2021. The Company presently anticipates contributing an additional $70 million to its pension plans and $86 million to its OPEB plans during the remainder of fiscal year 2022. These pension and OPEB contributions primarily include direct benefit payments from Company funds.