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 September 30, 2016, the actual allocation for the Company's U.S. Plan was 63% equities and equity alternatives and 37% fixed income. The target asset allocation for the Company's U.K. Plans, which comprise approximately 83% of non-U.S. Plan assets at December 31, 2015, was 48% equities and equity alternatives and 52% fixed income. At September 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 September 30,	Benefits						Benefits
(In millions)	2016			2015			2016			2015
Service cost	$	43		$	48		$	1		$	—
Interest cost	132			147			—			1
Expected return on plan assets	(232		)	(246		)	—			—
Amortization of prior service cost	1			—			1			—
Recognized actuarial loss	43			66			—			—
Net periodic benefit (credit) cost	$	(13	)	$	15		$	2		$	1
Curtailment loss	—			4			—			—
Settlement loss	—			2			—			—
Total (credit) cost	$	(13	)	$	21		$	2		$	1

Combined U.S. and significant non-U.S. Plans	Pension						Post-retirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions)	2016			2015			2016			2015
Service cost	$	133		$	150		$	1		$	2
Interest cost	407			439			3			5
Expected return on plan assets	(715		)	(732		)	—			—
Amortization of prior service cost	—			—			3			1
Recognized actuarial loss (gain)	127			220			(1		)	(1		)
Net periodic benefit (credit) cost	$	(48	)	$	77		$	6		$	7
Curtailment (gain) loss	(5		)	4			—			—
Settlement loss	1			2			—			—
Plan termination	—			—			—			(128		)
Total (credit) cost	$	(52	)	$	83		$	6		$	(121	)

U.S. Plans only	Pension						Post-retirement
For the Three Months Ended September 30,	Benefits						Benefits
(In millions)	2016			2015			2016			2015
Service cost	$	26		$	29		$	—		$	—
Interest cost	66			63			—			—
Expected return on plan assets	(95		)	(93		)	—			—
Amortization of prior service cost	—			—			1			—
Recognized actuarial loss	19			35			—			—
Net periodic benefit cost	$	16		$	34		$	1		$	—



U.S. Plans only	Pension						Post-retirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions)	2016			2015			2016			2015
Service cost	$	79		$	88		$	—		$	1
Interest cost	198			188			1			2
Expected return on plan assets	(285		)	(277		)	—			—
Amortization of prior service cost	—			—			3			1
Recognized actuarial loss (gain)	55			126			(1		)	(1		)
Net periodic benefit cost	$	47		$	125		$	3		$	3
Plan termination	—			—			—			(128		)
Total cost (credit)	$	47		$	125		$	3		$	(125	)

In October 2016, the Company modified its U.S. defined benefit pension plans to discontinue further benefit accruals for participants after December 31, 2016. At the same time, the Company amended its U.S. defined contribution retirement plans for most of its U.S. employees to add an automatic Company contribution equal to 4% of eligible base pay beginning on January 1, 2017. This new Company contribution, together with the Company’s current matching contribution, provides eligible U.S. employees with the opportunity to receive a total contribution of up to 7% of eligible base pay. As required under GAAP, the defined benefit plans that are significantly impacted by the modification will be re-measured using market data and assumptions as of the modification date. The impact of this remeasurement on the Company’s overall pension expense in the fourth quarter of 2016 is not expected to be significant.

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 2015 reflects the impact of the remeasurement 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 September 30,	Benefits						Benefits
(In millions)	2016			2015			2016		2015
Service cost	$	17		$	19		$	1	$	—
Interest cost	66			84			—		1
Expected return on plan assets	(137		)	(153		)	—		—
Amortization of prior service cost	1			—			—		—
Recognized actuarial loss	24			31			—		—
Net periodic benefit (credit) cost	$	(29	)	$	(19	)	$	1	$	1
Curtailment loss	—			4			—		—
Settlement loss	—			2			—		—
Total (credit) cost	$	(29	)	$	(13	)	$	1	$	1



Significant non-U.S. Plans only	Pension						Post-retirement
For the Nine Months Ended September 30,	Benefits						Benefits
(In millions)	2016			2015			2016		2015
Service cost	$	54		$	62		$	1	$	1
Interest cost	209			251			2		3
Expected return on plan assets	(430		)	(455		)	—		—
Recognized actuarial loss	72			94			—		—
Net periodic benefit (credit) cost	$	(95	)	$	(48	)	$	3	$	4
Curtailment (gain) loss	(5		)	4			—		—
Settlement loss	1			2			—		—
Total (credit) cost	$	(99	)	$	(42	)	$	3	$	4

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 2015 reflect the impact of the remeasurement 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
September 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 $159 million of contributions to its U.S. and non-U.S. defined benefit plans in the first nine months of 2016. The Company expects to contribute approximately $58 million to its non-qualified U.S. pension and non-U.S. pension plans during the remainder of 2016.