Pension and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2011

Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Benefits

10.   Pension and Other Postretirement Benefits

The components of pension expense for the defined benefit pension plan reflected in our consolidated statement of income (loss) are shown in the table below and reflect the portion of the pension expense of the combined HSBC North America Pension Plan (either the HSBC North America Pension Plan” or the “Plan”) which has been allocated to HSBC Finance Corporation:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
				(in millions)
Service cost – benefits earned during the period	$	1		$	4		$	4		$	11
Interest cost on projected benefit obligation		8			10			25			29
Expected return on assets		(10	)		(9	)		(29	)		(27	)
Recognized losses		4			6			12			17
Amortization of prior service cost		-			(1	)		-			(1	)
Pension expense	$	3		$	10		$	12		$	29

Pension expense declined during the first nine months of 2011 primarily due to lower service cost as a result of a decrease in the number of active participants in the Plan and the impact of the decision to cease future benefit accruals for legacy participants under the final average pay formula components of the Plan effective January 1, 2011.

Components of the net periodic benefit cost for our postretirement medical plan benefits other than pensions are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
	(in millions)
Service cost – benefits earned during the period	$	-	$	-	$	-	$	1
Interest cost		1		2		3		4
Net periodic postretirement benefit cost	$	1	$	2	$	3	$	5