Employee Benefits

6 Months Ended

Jun. 30, 2011

Employee Benefits

Employee Benefits

13. Employee Benefits

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

		Pension									Postretirement
(in millions)		Non-U.S. Plans			U.S. Plans			Total			Non-U.S. Plans		U.S. Plans		Total
Three Months Ended June 30, 2011
Components of net periodic benefit cost:
	Service cost	$	16		$	37		$	53		$	1	$	2	$	3
	Interest cost		8			52			60			-		3		3
	Expected return on assets		(6	)		(63	)		(69	)		-		-		-
	Amortization of prior service cost		-			1			1			-		1		1
	Amortization of net loss		3			10			13			-		-		-
Net periodic benefit cost		$	21		$	37		$	58		$	1	$	6	$	7
Amount associated with discontinued operations		$	1		$	-		$	1		$	-	$	-	$	-
Three Months Ended June 30, 2010
Components of net periodic benefit cost:
	Service cost	$	31		$	35		$	66		$	2	$	2	$	4
	Interest cost		14			54			68			1		4		5
	Expected return on assets		(7	)		(64	)		(71	)		-		-		-
	Amortization of prior service credit		(3	)		-			(3	)		-		-		-
	Amortization of net loss		12			12			24			-		-		-
	Other		2			-			2			-		-		-
Net periodic benefit cost		$	49		$	37			86		$	3	$	6	$	9
Amount associated with discontinued operations		$	32		$	3			35		$	1	$	-	$	1
Six Months Ended June 30, 2011
Components of net periodic benefit cost:
	Service cost	$	38		$	74		$	112		$	2	$	4	$	6
	Interest cost		19			104			123			1		7		8
	Expected return on assets		(13	)		(126	)		(139	)		-		-		-
	Amortization of prior service (credit) cost		(2	)		1			(1	)		-		1		1
	Amortization of net loss		9			21			30			-		-		-
Net periodic benefit cost		$	51		$	74		$	125		$	3	$	12	$	15
Amount associated with discontinued operations		$	11		$	-		$	11		$	1	$	-	$	1
Six Months Ended June 30, 2010
Components of net periodic benefit cost:
	Service cost	$	63		$	71		$	134		$	4	$	4	$	8
	Interest cost		29			108			137			2		8		10
	Expected return on assets		(14	)		(128	)		(142	)		-		-		-
	Amortization of prior service credit		(5	)		-			(5	)		-		-		-
	Amortization of net loss		23			24			47			-		-		-
	Other		1			-			1			-		-		-
Net periodic benefit cost		$	97		$	75			172		$	6	$	12	$	18
Amount associated with discontinued operations		$	63		$	7			70		$	1	$	-	$	1

Impact of AIG Star and AIG Edison Divestiture

    At December 31, 2010, AIG's projected benefit obligation and fair value of plan assets for its non-U.S. pension plans were $2.0 billion and $954 million, respectively. These amounts have been reduced by approximately $804 million and $279 million for pension plans related to AIG Star and AIG Edison, respectively, which were assumed by the purchaser on February 1, 2011.

    At December 31, 2010, AIG estimated its 2011 annual pension expense and contributions would be $282 million and $144 million, respectively. Included in those totals were $53 million of pension expense and $54 million of contributions for AIG Star and AIG Edison.

    For the six-month period ended June 30, 2011, AIG contributed $67 million to its U.S. and non-U.S. pension plans and estimates it will contribute an additional $32 million for the remainder of 2011. These estimates are subject to change because contribution decisions are affected by various factors, including AIG's liquidity, market performance and management discretion.