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 was 58% equities and equity alternatives and 42% fixed income and at September 30, 2014, 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 82% of non-U.S. Plan assets, is 50% equities and equity alternatives and 50% fixed income. As of September 30, 2014, the actual allocation for the U.K. Plans was 45% equities and equity alternatives and 55% 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 generally uses threshold-based portfolio re-balancing to ensure the actual portfolio remains consistent with target asset allocation ranges. Effective as of October 17, 2014, the target asset allocation for the U.S. Plan was changed to 62% equities and equity alternatives and 38% fixed income.

After completion of a consultation period with affected colleagues, in January 2014, the Company amended its U.K. defined benefit pension plans to close those plans to future benefit accruals effective August 1, 2014 and replaced those plans, along with its existing defined contribution plans, with a new, comprehensive defined contribution arrangement. This change resulted in a curtailment of the U.K. defined benefit plans, and as required under GAAP, the Company re-measured the defined benefit plans’ assets and liabilities at the amendment date, based on assumptions and market conditions at that date. As a result of the re-measurement, the projected benefit obligation ("PBO") increased by approximately $147 million and the funded status decreased by approximately $137 million. The change in the PBO and in the funded status relates primarily to a decrease in the discount rate at the re-measurement date. The net periodic benefit costs recognized in 2014 are the weighted average resulting from the December 31, 2013 measurement and the January 2014 re-measurement. The Company recognized a curtailment gain of $65 million in the first quarter of 2014, primarily resulting from the recognition of the remaining unamortized prior service credit related to a plan amendment made in December 2012. This gain was mostly offset by the cost of a transition benefit for certain employees most impacted by the amendment, which is not part of net periodic pension cost.

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)	2014			2013			2014			2013
Service cost	$	49		$	63		$	2		$	2
Interest cost	163			144			3			2
Expected return on plan assets	(251		)	(227		)	—			—
Amortization of prior service credit	(2		)	(5		)	—			—
Recognized actuarial loss	55			79			(1		)	—
Net periodic benefit cost	$	14		$	54		$	4		$	4

Combined U.S. and significant non-U.S. Plans	Pension						Postretirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014			2013
Service cost	$	172		$	188		$	4		$	4
Interest cost	485			433			9			8
Expected return on plan assets	(749		)	(680		)	—			—
Amortization of prior service credit	(8		)	(16		)	—			—
Recognized actuarial loss	159			237			(1		)	1
Net periodic benefit cost	$	59		$	162		$	12		$	13
Curtailment (credit)	(65		)	—			—			—
Total cost (credit)	$	(6	)	$	162		$	12		$	13

U.S. Plans only	Pension						Postretirement
For the Three Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014			2013
Service cost	$	23		$	26		$	1		$	1
Interest cost	65			57			2			1
Expected return on plan assets	(87		)	(81		)	—			—
Amortization of prior service credit	(1		)	(4		)	—			—
Recognized actuarial loss	31			52			(1		)	—
Net periodic benefit cost	$	31		$	50		$	2		$	2



U.S. Plans only	Pension						Postretirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014			2013
Service cost	$	68		$	78		$	2		$	2
Interest cost	190			171			6			5
Expected return on plan assets	(260		)	(243		)	—			—
Amortization of prior service credit	(5		)	(12		)	—			—
Recognized actuarial loss (gain)	84			156			(2		)	—
Net periodic benefit cost	$	77		$	150		$	6		$	7




Significant non-U.S. Plans only	Pension						Postretirement
For the Three Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014		2013
Service cost	$	26		$	37		$	1	$	1
Interest cost	98			87			1		1
Expected return on plan assets	(164		)	(146		)	—		—
Amortization of prior service credit	(1		)	(1		)	—		—
Recognized actuarial loss	24			27			—		—
Net periodic benefit cost	$	(17	)	$	4		$	2	$	2



Significant non-U.S. Plans only	Pension						Postretirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions of dollars)	2014			2013			2014		2013
Service cost	$	104		$	110		$	2	$	2
Interest cost	295			262			3		3
Expected return on plan assets	(489		)	(437		)	—		—
Amortization of prior service cost	(3		)	(4		)	—		—
Recognized actuarial loss	75			81			1		1
Net periodic benefit cost	$	(18	)	$	12		$	6	$	6
Curtailment (credit)	(65		)	—			—		—
Total cost (credit)	$	(83	)	$	12		$	6	$	6

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,	2014		2013		2014		2013
Weighted average assumptions:
Expected return on plan assets	7.53	%	7.66	%	—	%	—	%
Discount rate	4.74	%	4.38	%	5.03	%	4.32	%
Rate of compensation increase	2.64	%	2.43	%	—	%	—	%

The Company made approximately $140 million of contributions to its U.S. and non-U.S. defined benefit plans in the first nine months of 2014. The Company expects to contribute approximately $43 million to its non-qualified U.S. pension and non-U.S. pension plans during the remainder of 2014.