Retirement and Benefit Plans

9 Months Ended

Sep. 30, 2011

Retirement and Benefit Plans

16. Retirement and Benefit Plans

Net periodic pension cost is a component of employee benefits expense in the Condensed Consolidated Statements of Income. The plan assumptions are evaluated annually and are updated as necessary. The discount rate assumption reflects the yield on a portfolio of high quality fixed-income instruments that have a similar duration to the plan's liabilities. The expected long-term rate of return assumption reflects the average return expected on the assets invested to provide for the plan's liabilities. In determining the expected long-term rate of return, the Bancorp evaluated actuarial and economic inputs, including long-term inflation rate assumptions and broad equity and bond indices long-term return projections, as well as actual long-term historical plan performance.

The Bancorp did not make any cash contributions to its pension plans during the nine months ended September 30, 2011and 2010. Based on the current actuarial assumptions, the Bancorp is not required to make any cash contributions to its pension plans during the remainder of 2011. The following table summarizes the components of net periodic pension cost:

		For the three months		For the nine months
		ended September 30,		ended September 30,
($ in millions)		2011	2010	2011	2010
Service cost	$	-	-	-	-
Interest cost		3	3	9	9
Expected return on assets		(4)	(4)	(12)	(10)
Amortization of actuarial loss		3	3	8	9
Amortization of net prior service cost		-	-	-	-
Settlement		-	-	-	-
Net periodic pension cost	$	2	2	5	8