Employee Postretirement Benefits

12 Months Ended

Dec. 31, 2012

Employee Postretirement Benefits [Abstract]

Employee Postretirement Benefits

Employee Postretirement Benefits

Pension Plans

Substantially all regular employees in North America and the United Kingdom are covered by defined benefit pension plans (the "Principal Plans") and/or defined contribution retirement plans. Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. The funding policy for the Principal Plans is to contribute assets at least equal in amount to regulatory minimum requirements. Nonqualified U.S. plans providing pension benefits in excess of limitations imposed by the U.S. income tax code are not funded. Funding for the remaining defined benefit plans outside the U.S. is based on legal requirements, tax considerations, investment opportunities and customary business practices in these countries.

Other Postretirement Benefit Plans

Substantially all U.S. retirees and employees are covered by unfunded health care and life insurance benefit plans. Certain benefits are based on years of service and/or age at retirement. The plans are principally noncontributory for employees who were eligible to retire before 1993 and contributory for most employees who retire after 1992, except that we provide no subsidized benefits to most employees hired after 2003.

In the U.S., health care benefit costs are capped and indexed by 3 percent annually for certain employees retiring on or before April 1, 2004. The future cost for retiree health care benefits is limited to a defined fixed cost based on the years of service for certain employees retiring after April 1, 2004. The annual increase in the consolidated weighted-average health care cost trend rate is expected to be 7.1 percent in 2013 and to decline to 5.1 percent in 2018 and thereafter.

Summarized financial information about postretirement plans, excluding defined contribution retirement plans, is presented below:

	Pension Benefits						Other Benefits
	Year Ended December 31
	2012			2011			2012			2011
Change in Benefit Obligation
Benefit obligation at beginning of year	$	5,920		$	5,658		$	788		$	796
Service cost	45			57			15			14
Interest cost	279			307			36			41
Actuarial loss (gain)	854			374			37			33
Currency and other	79			(103		)	3			(22		)
Benefit payments from plans	(478		)	(359		)	—			—
Direct benefit payments	(14		)	(14		)	(55		)	(74		)
Settlements	(95		)	—			—			—
Benefit obligation at end of year	6,590			5,920			824			788
Change in Plan Assets
Fair value of plan assets at beginning of year	5,214			4,600			—			—
Actual return on plan assets	556			309			—			—
Employer contributions	110			679			—			—
Currency and other	60			(15		)	—			—
Benefit payments	(478		)	(359		)	—			—
Settlements	(87		)	—			—			—
Fair value of plan assets at end of year	5,375			5,214			—			—
Funded Status	$	(1,215	)	$	(706	)	$	(824	)	$	(788	)
Amounts Recognized in the Balance Sheet
Noncurrent asset—prepaid benefit cost	$	8		$	20		$	—		$	—
Current liability—accrued benefit cost	(12		)	(13		)	(56		)	(59		)
Noncurrent liability—accrued benefit cost	(1,211		)	(713		)	(768		)	(729		)
Net amount recognized	$	(1,215	)	$	(706	)	$	(824	)	$	(788	)

During 2012, we offered a lump-sum distribution to certain participants in our U.S. plan. Included in pension benefit payments from plans in 2012 is $116 related to participants electing the lump-sum option, which was not sufficient to trigger a settlement charge for our U.S. plan.

Information for the Principal Plans and All Other Pension Plans

	Principal Plans				All Other Pension Plans				Total
	Year Ended December 31
	2012		2011		2012		2011		2012		2011
Projected benefit obligation ("PBO")	$	6,071	$	5,421	$	519	$	499	$	6,590	$	5,920
Accumulated benefit obligation ("ABO")	6,049		5,395		420		419		6,469		5,814
Fair value of plan assets	5,063		4,840		312		374		5,375		5,214

The PBO and fair value of plan assets for the Principal Plans include $4,375 and $3,553, respectively, related to the U.S. qualified and nonqualified pension plans as of December 31, 2012. The PBO and fair value of plan assets for the Principal Plans include $4,021 and $3,478, respectively, related to the U.S. qualified and nonqualified pension plans as of December 31, 2011.

Information for Pension Plans with an ABO in Excess of Plan Assets

	December 31
	2012		2011
PBO	$	6,558	$	5,708
ABO	6,440		5,664
Fair value of plan assets	5,335		5,016

Components of Net Periodic Benefit Cost

	Pension Benefits									Other Benefits
	Year Ended December 31
	2012			2011			2010			2012			2011		2010
Service cost	$	45		$	57		$	56		$	15		$	14	$	14
Interest cost	279			307			309			36			41		44
Expected return on plan assets(a)	(329		)	(345		)	(336		)	—			—		—
Amortization of prior service cost and transition amount and other	(4		)	6			5			(1		)	1		3
Recognized net actuarial loss	111			94			99			1			—		1
Settlements	20			—			—			—			—		—
Net periodic benefit cost	$	122		$	119		$	133		$	51		$	56	$	62

^(a)  The expected return on plan assets is determined by multiplying the fair value of plan assets at the remeasurement date, typically the prior year-end (adjusted for estimated current year cash benefit payments and contributions), by the expected long-term rate of return.

Weighted-Average Assumptions Used to Determine Net Cost for Years Ended December 31

	Pension Benefits						Other Benefits
	2012		2011		2010		2012		2011		2010
Discount rate	4.87	%	5.51	%	5.85	%	4.70	%	5.44	%	5.79	%
Expected long-term return on plan assets	6.49	%	7.14	%	7.96	%	—		—		—
Rate of compensation increase	2.91	%	4.05	%	4.09	%	—		—		—

Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31

	Pension Benefits				Other Benefits
	2012		2011		2012		2011
Discount rate	4.04	%	4.87	%	3.97	%	4.70	%
Rate of compensation increase	2.73	%	2.91	%	—		—

Expected Long-Term Rate of Return and Investment Strategies for the Principal Plans

Strategic asset allocation decisions are made considering several risk factors, including plan participants' retirement benefit security, the estimated payments of the associated liabilities, the plan funded status, and Kimberly-Clark's financial condition. The resulting strategic asset allocation is a diversified blend of equity and fixed income investments. Equity investments are typically diversified across geographies and market capitalization. Fixed income investments are diversified across multiple sectors including government issues and corporate debt instruments with a portfolio duration that is consistent with the estimated payment of the associated liability. Actual asset allocation is regularly reviewed and periodically rebalanced to the strategic allocation when considered appropriate.

The expected long-term rate of return is evaluated on an annual basis. In setting this assumption, we consider a number of factors including projected future returns by asset class relative to the current asset allocation. The weighted-average expected long-term rate of return on pension fund assets used to calculate pension expense for the Principal Plans was 6.68 percent in 2012 compared with 7.35 percent in 2011 and will be 6.43 percent in 2013.

Plan Assets

Pension plan asset allocations for our Principal Plans are as follows:

Asset Category	Target Allocation 2013		Percentage of Plan Assets at December 31
			2012		2011
Equity securities	40	%	40	%	42	%
Fixed income securities	60		60		58
Total	100	%	100	%	100	%

Set forth below are the pension plan assets of the Principal Plans measured at fair value, by level in the fair-value hierarchy:

	Fair Value Measurements at December 31, 2012
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)
Cash and Cash Equivalents
Held directly	$	23	$	23	$	—
Held through mutual and pooled funds	143		—		143
Fixed Income
Held directly:
U.S. government and municipals	132		31		101
U.S. corporate debt	1,112		—		1,112
U.S. securitized fixed income	3		—		3
Held through mutual and pooled funds:
U.S. government and municipals	490		—		490
U.S. corporate debt	199		—		199
International bonds	920		—		920
Multi-sector	2		2		—
Equity
Held directly:
International equity	143		143		—
Held through mutual and pooled funds:
U.S. equity	678		3		675
Non-U.S. equity	925		1		924
Global equity	293		—		293
Total Plan Assets	$	5,063	$	203	$	4,860

	Fair Value Measurements at December 31, 2011
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)
Cash and Cash Equivalents
Held directly	$	24	$	24	$	—
Held through mutual and pooled funds	180		50		130
Fixed Income
Held directly:
U.S. government and municipals	187		93		94
U.S. corporate debt	993		—		993
U.S. securitized fixed income	13		—		13
Held through mutual and pooled funds:
U.S. government and municipals	472		—		472
U.S. corporate debt	185		—		185
International bonds	765		—		765
Multi-sector	2		2		—
Equity
Held directly:
International equity	189		189		—
Held through mutual and pooled funds:
U.S. equity	680		3		677
Non-U.S. equity	869		1		868
Global equity	252		—		252
U.S. equity collars	29		—		29
Total Plan Assets	$	4,840	$	362	$	4,478

During 2012 and 2011, the plan assets did not include a significant amount of Kimberly-Clark common stock.

Inputs and valuation techniques used to measure the fair value of plan assets vary according to the type of security being valued. Substantially all of the equity securities held directly by the plans are actively traded and fair values are determined based on quoted market prices. Fair values of U.S. Treasury securities are determined based on trading activity in the marketplace.

Fair values of U.S. corporate debt, U.S. securitized fixed income and international bonds are typically determined by reference to the values of similar securities traded in the marketplace and current interest rate levels. Multiple pricing services are typically employed to assist in determining these valuations.

Fair values of equity securities and fixed income securities held through units of pooled funds are based on net asset value (NAV) of the units of the pooled fund determined by the fund manager. Pooled funds are similar in nature to retail mutual funds, but are typically more efficient for institutional investors than retail mutual funds. As pooled funds are typically only accessible by institutional investors, the NAV may not be readily observable by non-institutional investors.

Equity securities held directly by the pension trusts and those held through units in pooled funds are monitored as to issuer and industry. Except for U.S. Treasuries, concentrations of fixed income securities are similarly monitored for concentrations by issuer and industry. As of December 31, 2012, there were no significant concentrations of equity or debt securities in any single issuer or industry.

As of December 31, 2012 and 2011, assets in the Principal Plans with a level 3 fair value determination (significant unobservable inputs) were less than $1. In addition, during 2012 and 2011, there were no significant transfers of assets in the Principal Plans among level 1, 2 or 3 fair value determinations.

Cash Flows

We expect to contribute between $100 to $300 to our defined benefit pension plans in 2013.

Estimated Future Benefit Payments

Over the next ten years, we expect that the following gross benefit payments will occur:

	Pension Benefits		Other Benefits
2013	$	352	$	58
2014	354		57
2015	357		56
2016	357		57
2017	365		58
2018-2022	1,915		300

Health Care Cost Trends

Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans. A one-percentage-point change in assumed health care trend rates would have the following effects on 2012 data:

	One-Percentage-Point
	Increase		Decrease
Effect on total of service and interest cost components	$	1	$	(1	)
Effect on postretirement benefit obligation	16		(16		)

Defined Contribution Pension Plans

Effective January 1, 2010, we adopted a new 401(k) profit sharing plan, and amended our supplemental plan, to provide for a matching contribution of a U.S. employee's contributions and accruals, subject to predetermined limits, as well as a discretionary profit sharing contribution, in which contributions will be based on our profit performance. We also have defined contribution pension plans for certain employees outside the U.S.

Costs charged to expense for our defined contribution pension plans were as follows:

	2012		2011		2010
U.S.	$	82	$	77	$	75
Outside the U.S.	26		36		23
Total	$	108	$	113	$	98