EMPLOYEE BENEFITS

9 Months Ended

Sep. 30, 2015

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

12. EMPLOYEE BENEFITS

We sponsor various defined benefit pension plans, post-retirement medical and life insurance plans for eligible employees and retirees in the US and certain non-US countries. For the nine-month period ended September 30,2015, we contributed $600 million to our U.S. and non-U.S. pension plans ($541 million was contributed to the U.S. AIG Retirement Plan), and we estimate that we will contribute an additional $14 million for the remainder of 2015. These estimates are subject to change because contribution decisions are affected by various factors including our liquidity, market performance and management discretion.

On August 27, 2015, we amended the AIG Retirement Plan, the Non-Qualified Retirement Income Plan and the Supplemental Executive Retirement Plan (the Plans), to freeze benefit accruals effective January 1, 2016. Consequently, the Plans will be closed to new participants and current participants will no longer earn additional benefits after December 31, 2015. However, interest credits will continue to accrue on the existing cash balance accounts and participants will also continue to earn service credits for purposes of vesting and early retirement eligibility and subsidies as they continue to work for AIG.

As a result of this decision to freeze the Plans, AIG re-measured the plan assets and obligations as of September 1, 2015 and recognized a pre-tax curtailment gain of $179 million and a net increase of $324 million in accumulated other comprehensive income in the third quarter of 2015.

The following table presents the components of net periodic benefit cost with respect to pensions and other postretirement benefits:

	Pension						Postretirement
		U.S.		Non-U.S.				U.S.		Non-U.S.
(in millions)		Plans		Plans		Total		Plans		Plans		Total
Three Months Ended September 30, 2015
Components of net periodic benefit cost:
Service cost	$	41	$	10	$	51	$	1	$	-	$	1
Interest cost		54		6		60		2		1		3
Expected return on assets		(74)		(5)		(79)		-		-		-
Amortization of prior service credit		(6)		(1)		(7)		(3)		-		(3)
Amortization of net loss		21		2		23		-		-		-
Curtailment gain		(179)		-		(179)		-		-		-
Net periodic benefit (income) cost	$	(143)	$	12	$	(131)	$	-	$	1	$	1
Three Months Ended September 30, 2014
Components of net periodic benefit cost:
Service cost	$	42	$	11	$	53	$	1	$	-	$	1
Interest cost		57		7		64		2		1		3
Expected return on assets		(73)		(6)		(79)		-		-		-
Amortization of prior service credit		(8)		(1)		(9)		(3)		-		(3)
Amortization of net loss		9		2		11		-		-		-
Net periodic benefit cost	$	27	$	13	$	40	$	-	$	1	$	1
Nine Months Ended September 30, 2015
Components of net periodic benefit cost:
Service cost	$	144	$	31	$	175	$	4	$	2	$	6
Interest cost		164		18		182		6		2		8
Expected return on assets		(218)		(17)		(235)		-		-		-
Amortization of prior service credit		(22)		(2)		(24)		(8)		-		(8)
Amortization of net loss		86		7		93		-		-		-
Curtailment gain		(179)		(1)		(180)		-		-		-
Net periodic benefit (income) cost	$	(25)	$	36	$	11	$	2	$	4	$	6
Nine Months Ended September 30, 2014
Components of net periodic benefit cost:
Service cost	$	130	$	32	$	162	$	3	$	1	$	4
Interest cost		171		22		193		7		2		9
Expected return on assets		(215)		(17)		(232)		-		-		-
Amortization of prior service credit		(25)		(2)		(27)		(8)		-		(8)
Amortization of net loss		31		6		37		-		-		-
Net periodic benefit cost	$	92	$	41	$	133	$	2	$	3	$	5