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Retirement Benefits
 9 Months Ended
Sep. 30, 2012
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]  
Retirement Benefits
Retirement Benefits
The Company maintains qualified and non-qualified defined benefit pension plans for its U.S. and non-U.S. eligible employees. The Company’s policy for funding its tax qualified defined benefit retirement plans is to contribute amounts at least sufficient to meet the funding requirements set forth by U.S. law and the laws of the non-U.S. jurisdictions in which the Company offers defined benefit plans.
The target asset allocation for the U.S. Plan is 58% equities and equity alternatives and 42% fixed income. At the end of the second quarter of 2012, the actual allocation for the U.S. Plan was 57% equities and equity alternatives and 43% fixed income. The target asset allocation for the U.K. Plans, which comprises approximately 80% of non-U.S. Plan assets, is 53% equities and equity alternatives and 47% fixed income. At the end of the second quarter of 2012, the actual allocation for the U.K. Plan was 52% equities and equity alternatives and 48% fixed income. The assets of the Company's defined benefit plans are diversified and are managed in accordance with applicable laws and with the goal of maximizing the plans' real return within acceptable risk parameters. The Company uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges.
The components of the net periodic benefit cost for defined benefit and other post-retirement plans are as follows:
 
Combined U.S. and significant non-U.S. Plans
Pension
 
Postretirement
For the Three Months Ended September 30,
Benefits
 
Benefits
(In millions of dollars)
2012

 
2011

 
2012

 
2011

Service cost
$
59

 
$
55

 
$
1

 
$
1

Interest cost
148

 
153

 
3

 
2

Expected return on plan assets
(225
)
 
(223
)
 
—

 
—

Amortization of prior service credit
(4
)
 
(5
)
 
(3
)
 
(3
)
Recognized actuarial loss
67

 
54

 
—

 
(3
)
Net periodic benefit cost
$
45

 
$
34

 
$
1

 
$
(3
)
 
 
 
 
 
 
 
 
Combined U.S. and significant non-U.S. Plans
Pension
 
Postretirement
For the Nine Months Ended September 30,
Benefits
 
Benefits
(In millions of dollars)
2012

 
2011

 
2012

 
2011

Service cost
$
180

 
$
169

 
$
3

 
$
4

Interest cost
445

 
458

 
9

 
9

Expected return on plan assets
(676
)
 
(668
)
 
—

 
—

Amortization of prior service credit
(14
)
 
(14
)
 
(9
)
 
(10
)
Recognized actuarial loss
201

 
162

 
—

 
(3
)
Net periodic benefit cost
$
136

 
$
107

 
$
3

 
$
—

 
 
 
 
 
 
 
 
U.S. Plans only
Pension
 
Postretirement
For the Three Months Ended September 30,
Benefits
 
Benefits
(In millions of dollars)
2012

 
2011

 
2012

 
2011

Service cost
$
23

 
$
20

 
$
1

 
$
—

Interest cost
57

 
58

 
2

 
1

Expected return on plan assets
(80
)
 
(79
)
 
—

 
—

Amortization of prior service credit
(4
)
 
(4
)
 
(3
)
 
(3
)
Recognized actuarial loss (credit)
38

 
25

 
—

 
(3
)
Net periodic benefit cost (credit)
$
34

 
$
20

 
$
—

 
$
(5
)
U.S. Plans only
Pension
 
Postretirement
For the Nine Months Ended September 30,
Benefits
 
Benefits
(In millions of dollars)
2012

 
2011

 
2012

 
2011

Service cost
$
70

 
$
62

 
$
2

 
$
2

Interest cost
172

 
173

 
6

 
6

Expected return on plan assets
(241
)
 
(236
)
 
—

 
—

Amortization of prior service credit
(12
)
 
(12
)
 
(9
)
 
(10
)
Recognized actuarial loss (credit)
114

 
75

 
(1
)
 
(3
)
Net periodic benefit cost (credit)
$
103

 
$
62

 
$
(2
)
 
$
(5
)
 
 
 
 
 
 
 
 
Significant non-U.S. Plans only
Pension
 
Postretirement
For the Three Months Ended September 30,
Benefits
 
Benefits
(In millions of dollars)
2012

 
2011

 
2012

 
2011

Service cost
$
36

 
$
35

 
$
—

 
$
1

Interest cost
91

 
95

 
1

 
1

Expected return on plan assets
(145
)
 
(144
)
 
—

 
—

Amortization of prior service cost
—

 
(1
)
 
—

 
—

Recognized actuarial loss
29

 
29

 
—

 
—

Net periodic benefit cost
$
11

 
$
14

 
$
1

 
$
2

Significant non-U.S. Plans only
Pension
 
Postretirement
For the Nine Months Ended September 30,
Benefits
 
Benefits
(In millions of dollars)
2012

 
2011

 
2012

 
2011

Service cost
$
110

 
$
107

 
$
1

 
$
2

Interest cost
273

 
285

 
3

 
3

Expected return on plan assets
(435
)
 
(432
)
 
—

 
—

Amortization of prior service cost
(2
)
 
(2
)
 
—

 
—

Recognized actuarial loss
87

 
87

 
1

 
—

Net periodic benefit cost
$
33

 
$
45

 
$
5

 
$
5


The weighted average actuarial assumptions utilized to calculate the net periodic benefit costs for the U.S. and significant non-U.S. defined benefit plans are as follows:
 
Combined U.S. and significant non-U.S. Plans
Pension
Benefits
 
Postretirement
Benefits
September 30
2012

 
2011

 
2012

 
2011

Weighted average assumptions:
 
 
 
 
 
 
 
Expected return on plan assets
8.04
%
 
8.18
%
 
—
%
 
—
%
Discount rate
4.91
%
 
5.59
%
 
5.05
%
 
5.84
%
Rate of compensation increase
3.09
%
 
4.09
%
 
—
%
 
—
%

The Company made approximately $420 million of contributions to its U.S. and non-U.S. defined benefit plans in the first nine months of 2012, including discretionary contributions of $100 million to its U.S. qualified defined benefit plan and $100 million to its U.K. plans, and expects to contribute a total of approximately $100 million to its non-qualified U.S. and non-U.S. defined benefit plans during the remainder of 2012.