Retirement Benefits

The Company maintains qualified and non-qualified defined benefit pension plans for some of 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 Company's U.S. Plan was 64% equities and equity alternatives and 36% fixed income and at June 30, 2016, the actual allocation for the Company's U.S. Plan was 62% equities and equity alternatives and 38% fixed income. The target asset allocation for the Company's U.K. Plans, which comprise approximately 83% of non-U.S. Plan assets, is 48% equities and equity alternatives and 52% fixed income. At June 30, 2016, the actual allocation for the U.K. Plans was 46% equities and equity alternatives and 54% 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.

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						Post-retirement
For the Three Months Ended June 30,	Benefits						Benefits
(In millions of dollars)	2016			2015			2016			2015
Service cost	$	46		$	50		$	—		$	1
Interest cost	138			146			1			2
Expected return on plan assets	(242		)	(243		)	—			—
Amortization of prior service (credit) cost	(1		)	—			1			1
Recognized actuarial loss (gain)	42			78			—			(1		)
Net periodic benefit (credit) cost	$	(17	)	$	31		$	2		$	3
Curtailment gain	(5		)	—			—			—
Settlement loss	1			—			—			—
Total (credit) cost	$	(21	)	$	31		$	2		$	3

Combined U.S. and significant non-U.S. Plans	Pension						Post-retirement
For the Six Months Ended June 30,	Benefits						Benefits
(In millions of dollars)	2016			2015			2016			2015
Service cost	$	90		$	102		$	—		$	2
Interest cost	275			292			3			4
Expected return on plan assets	(483		)	(486		)	—			—
Amortization of prior service (credit) cost	(1		)	—			2			1
Recognized actuarial loss (gain)	84			154			(1		)	(1		)
Net periodic benefit (credit) cost	$	(35	)	$	62		$	4		$	6
Curtailment gain	(5		)	—			—			—
Settlement loss	1			—			—			—
Plan termination	—			—			—			(128		)
Total (credit) cost	$	(39	)	$	62		$	4		$	(122	)


U.S. Plans only	Pension						Post-retirement
For the Three Months Ended June 30,	Benefits						Benefits
(In millions of dollars)	2016			2015			2016			2015
Service cost	$	27		$	29		$	—		$	—
Interest cost	66			63			—			1
Expected return on plan assets	(95		)	(92		)	—			—
Amortization of prior service cost	—			—			1			1
Recognized actuarial loss (gain)	18			46			—			(1		)
Net periodic benefit cost	$	16		$	46		$	1		$	1
Plan termination	—			—			—			—
Total cost	$	16		$	46		$	1		$	1



U.S. Plans only	Pension						Post-retirement
For the Six Months Ended June 30,	Benefits						Benefits
(In millions of dollars)	2016			2015			2016			2015
Service cost	$	53		$	59		$	—		$	1
Interest cost	132			125			1			2
Expected return on plan assets	(190		)	(184		)	—			—
Amortization of prior service cost	—			—			2			1
Recognized actuarial loss (gain)	36			91			(1		)	(1		)
Net periodic benefit cost	$	31		$	91		$	2		$	3
Plan termination	—			—			—			(128		)
Total cost (credit)	$	31		$	91		$	2		$	(125	)

Effective September 1, 2015, the Company divided its U.S. qualified defined benefit plan to provide enhanced flexibility and better manage the risks. The existing plan was amended to cover only the retirees currently receiving benefits and terminated vested participants as of August 1, 2015. The Company's active participants as of that date were transferred into a newly established, legally separate qualified defined benefit plan. The benefits offered to the plans’ participants were unchanged. As a result of the plan amendment and establishment of the new plan, the Company re-measured the assets and liabilities of the two plans as required under U.S. GAAP, based on assumptions and market conditions at the amendment date. The net periodic pension expense recognized in 2016 reflects the impact of the amendment discussed above.

In March 2015, the Company amended its U.S. Post-65 retiree medical reimbursement plan (the "RRA plan"), resulting in its termination, with benefits to certain participants to be paid through December 31, 2016. As a result of the termination of the RRA plan, the Company recognized a net credit of approximately $125 million in the first quarter of 2015.



Significant non-U.S. Plans only	Pension						Post-retirement
For the Three Months Ended June 30,	Benefits						Benefits
(In millions of dollars)	2016			2015			2016		2015
Service cost	$	19		$	21		$	—	$	1
Interest cost	72			83			1		1
Expected return on plan assets	(147		)	(151		)	—		—
Amortization of prior service credit	(1		)	—			—		—
Recognized actuarial loss	24			32			—		—
Net periodic benefit (credit) cost	$	(33	)	$	(15	)	$	1	$	2
Curtailment (gain)	(5		)	—			—		—
Settlement loss	1			—			—		—
Total (credit) cost	$	(37	)	$	(15	)	$	1	$	2



Significant non-U.S. Plans only	Pension						Post-retirement
For the Six Months Ended June 30,	Benefits						Benefits
(In millions of dollars)	2016			2015			2016		2015
Service cost	$	37		$	43		$	—	$	1
Interest cost	143			167			2		2
Expected return on plan assets	(293		)	(302		)	—		—
Amortization of prior service credit	(1		)	—			—		—
Recognized actuarial loss	48			63			—		—
Net periodic benefit (credit) cost	$	(66	)	$	(29	)	$	2	$	3
Curtailment gain	(5		)	—			—		—
Settlement loss	1			—			—		—
Total (credit) cost	$	(70	)	$	(29	)	$	2	$	3

Effective August 1, 2015, the Company amended its Ireland defined benefit pension plans to close those plans to future benefit accruals and replaced those plans with a defined contribution arrangement. The Company re-measured the assets and liabilities of the plans, based on assumptions and market conditions on the amendment date. The net periodic pension costs recognized in 2016 reflect the impact of the amendment discussed above.

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				Post-retirement Benefits
June 30,	2016		2015		2016		2015
Weighted average assumptions:
Expected return on plan assets	7.07	%	7.25	%	—		—
Discount rate	4.11	%	3.79	%	4.12	%	4.08	%
Rate of compensation increase	2.44	%	2.42	%	—		—

The Company made approximately $103 million of contributions to its U.S. and non-U.S. defined benefit plans in the first six months of 2016. The Company expects to contribute approximately $114 million to its non-qualified U.S. pension and non-U.S. pension plans during the remainder of 2016.