Pensions, Other Post-employment Benefits and Employee Benefit Plans

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Pensions,Other Post-employment Benefits and Employee Benefit Plans

Pension, Other Post-employment Benefits and Employee Benefit Plans.

Federal-Mogul, ARI and Viskase each sponsor several defined benefit pension plans (the ''Pension Benefits'') (and, in the case of Viskase, its pension plans include defined contribution plans). Additionally, Federal-Mogul, ARI and Viskase each sponsors health care and life insurance benefits (''Other Post-Employment Benefits'') for certain employees and retirees around the world. The Pension Benefits are funded based on the funding requirements of federal and international laws and regulations, as applicable, in advance of benefit payments and the Other Benefits as benefits are provided to participating employees. As prescribed by applicable U.S. GAAP, Federal-Mogul, ARI and Viskase each uses, as applicable, appropriate actuarial methods and assumptions in accounting for its defined benefit pension plans, non-pension post-employment benefits, and disability, early retirement and other post-employment benefits. The measurement date for all defined benefit plans is December 31 of each year.

Components of net periodic benefit cost (gain) for the three and nine months ended September 30, 2012 and 2011 are as follows:

	Pension Benefits						Other Post-Employment Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2012			2011			2012			2011
	(in millions)
Service cost	$	7		$	7		$	—		$	—
Interest cost	19			22			3			5
Expected return on plan assets	(15		)	(17		)	—			—
Amortization of actuarial losses	10			7			1			—
Amortization of prior service credit	—			—			(3		)	(4		)
Curtailment gain	—			—			(51		)	—
	$	21		$	19		$	(50	)	$	1

	Pension Benefits						Other Post-Employment Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
	(in millions)
Service cost	$	21		$	21		$	—		$	—
Interest cost	60			64			11			15
Expected return on plan assets	(47		)	(51		)	—			—
Amortization of actuarial losses	29			20			1			—
Amortization of prior service credit	—			—			(11		)	(12		)
Settlement gain	(1		)	—			—			—
Curtailment gain	—			—			(51		)	—
	$	62		$	54		$	(50	)	$	3

In July 2012, as a result of contract negotiations with a union at one of Federal-Mogul's U.S. manufacturing locations, the retiree medical benefits were modified for the location's active participants. Since this plan change reduced benefits attributable to employee service already rendered, it was treated as a negative plan amendment, which created a $13 million prior service credit in AOCI. The corresponding reduction in the average remaining future service period to the full eligibility date also triggered the recognition of a $51 million curtailment gain which was recognized in the consolidated statements of operations during the quarter ended September 30, 2012. It should be noted that the calculation of the curtailment gain excluded the newly created prior service credit.