11. Benefit Plans

Pension Plans - The Company has several non-contributory defined benefit plans for eligible employees. Benefits for certain plans are determined annually based on a specified percentage of annual earnings (based on the participant’s age or years of service) and a specified interest rate (which is established annually for all participants) applied to accrued balances. The benefits for another plan which cover salaried employees are based on formulas which include, among others, years of service and average pay. The Company’s funding policy is to make contributions in accordance with applicable governmental regulatory requirements.

Other Postretirement Benefit Plans - The Company has several postretirement benefit plans covering eligible employees and retirees. Participants generally become eligible after reaching age 55 with required years of service. Actual requirements for coverage vary by plan. Benefits for retirees who were covered by bargaining units vary by each unit and contract. Benefits for certain retirees are in the form of a Company health care account.

Benefits for retirees reaching age 65 are generally integrated with Medicare. Other retirees, based on plan provisions, must use Medicare as their primary coverage, with the Company reimbursing a portion of the unpaid amount; or are reimbursed for the Medicare Part B premium or have no Company coverage. The benefits provided by the Company are basically health and, for certain retirees, life insurance type benefits.

The Company funds certain of these benefit plans and accrues postretirement benefits during the active service of those employees who would become eligible for such benefits when they retire.

The components of net periodic benefit cost are as follows:


	Pension Benefits

	Three Months Ended				Nine Months Ended
	September 30,				September 30,

	2014		2013		2014		2013

(In millions)

Service cost	$	5	$	6	$	13	$	18
Interest cost		37		34		111		101
Expected return on plan assets		(52)		(49)		(157)		(148)
Amortization of unrecognized net loss		7		12		22		40
Regulatory asset decrease				4		1		4

Net periodic benefit cost	$	(3)	$	7	$	(10)	$	15


	Other Postretirement Benefits

	Three Months Ended				Nine months ended
	September 30,				September 30,

	2014		2013		2014		2013

(In millions)

Service cost			$	1			$	1
Interest cost	$	1		1	$	3		3
Expected return on plan assets		(1)		(1)		(3)		(3)
Amortization of unrecognized net loss				1				1
Amortization of unrecognized prior service benefit		(2)		(6)		(15)		(19)
Curtailment gain						(86)

Net periodic benefit cost	$	(2)	$	(4)	$	(101)	$	(17)

In the second quarter of 2014, CNA eliminated certain postretirement medical benefits associated with the CNA Health and Group Benefits Program. This change was a negative plan amendment and also resulted in an $86 million curtailment gain which is included in Other operating expenses in the Consolidated Condensed Statements of Income. In connection with the plan amendment, CNA remeasured the plan benefit obligation which resulted in a decrease to the discount rate used to determine the benefit obligation from 3.6% to 3.1%.