Compensation and Benefit Plans

Pension Plans

Edison International made contributions of $113 million during the nine months ended September 30, 2015, which includes contributions of $96 million by SCE. Edison International expects to make contributions of $14 million during the remainder of 2015, which includes $2 million from SCE. Annual contributions made by SCE to most of SCE's pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms, pending the outcome of the 2015 GRC decision. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense.

Pension expense components for continuing operations are:



	Three months ended September 30,						Nine months ended September 30,
(in millions)	2015			2014			2015			2014
Edison International:
Service cost	$	35		$	30		$	105		$	89
Interest cost	41			48			124			141
Expected return on plan assets	(57		)	(61		)	(171		)	(178		)
Settlement costs¹	—			35			—			35
Amortization of prior service cost	1			1			3			4
Amortization of net loss²	9			1			27			3
Expense under accounting standards	$	29		$	54		$	88		$	94
Regulatory adjustment	(1		)	(2		)	(4		)	59
Total expense recognized	$	28		$	52		$	84		$	153
SCE:
Service cost	$	35		$	29		$	104		$	87
Interest cost	38			44			113			132
Expected return on plan assets	(53		)	(56		)	(160		)	(168		)
Settlement costs¹	—			33			—			33
Amortization of prior service cost	1			1			4			3
Amortization of net loss²	7			—			22			1
Expense under accounting standards	$	28		$	51		$	83		$	88
Regulatory adjustment	(2		)	(2		)	(4		)	59
Total expense recognized	$	26		$	49		$	79		$	147


¹	For the three and nine months ended September 30, 2014, this relates to lump-sum amounts made to employees who retired from the SCE Retirement Plan (primarily due to workforce reductions). Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International was $2 million for both the three and nine months ended September 30, 2014.

Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $4 million and $2 million, respectively, for the three months ended September 30, 2015, and $11 million and $6 million, respectively, for the nine months ended September 30, 2015. The amount reclassified for Edison International and SCE was $2 million and $1 million, respectively, for the three months ended September 30, 2014 and $5 million and $3 million, respectively, for the nine months ended September 30, 2014.

Postretirement Benefits Other Than Pensions

Edison International made contributions of $45 million during the nine months ended September 30, 2015 and expects to make contributions of $14 million during the remainder of 2015, substantially all of which are expected to be made by SCE. Annual contributions made to SCE plans are anticipated to be recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to the total annual expense for these plans, pending the outcome of the 2015 GRC decision. Benefits under these plans, with some exceptions, are generally unvested and subject to change. Under the terms of the Edison International Health and Welfare Plan ("PBOP Plan") each participating employer (Edison International or its participating subsidiaries) is responsible for the costs and expenses of all PBOP benefits with respect to its employees and former employees. A participating employer may terminate the PBOP benefits with respect to its employees and former employees, as may SCE (as Plan sponsor), and, accordingly, the participants' PBOP benefits are not vested benefits.

PBOP expense components for continuing operations are:



	Three months ended September 30,						Nine months ended September 30,
(in millions)	2015			2014			2015			2014
Edison International:
Service cost	$	12		$	10		$	36		$	32
Interest cost	29			28			86			82
Expected return on plan assets	(28		)	(28		)	(85		)	(84		)
Amortization of prior service cost	(3		)	(9		)	(9		)	(27		)
Amortization of net loss	5			—			17			—
Total expense	$	15		$	1		$	45		$	3
SCE:
Service cost	$	12		$	10		$	36		$	32
Interest cost	28			27			84			81
Expected return on plan assets	(28		)	(28		)	(84		)	(84		)
Amortization of prior service cost	(3		)	(9		)	(9		)	(27		)
Amortization of net loss	6			—			17			—
Total expense	$	15		$	—		$	44		$	2

Workforce Reductions

SCE continues to focus on productivity improvements to mitigate rate pressure from its capital program, optimize its cost structure and improve operational efficiency, which is expected to result in further workforce reductions through 2016. During the nine months ended September 30, 2015, SCE increased the estimated impact for approved workforce reductions.

The following table provides a summary of changes in the accrued severance liability associated with these reductions:



(in millions)
Balance at January 1, 2015	$	35
Additions	17
Payments	(31		)
Balance at September 30, 2015	$	21

The liability presented in the table above is reflected in "Other current liabilities" on the consolidated balance sheets. The severance costs are included in "Operation and maintenance" on the consolidated income statements.