Pension and Other Postretirement Benefits

Defined Benefit Pension Plans Effective January 1, 2005, our previously separate qualified defined benefit pension plan was combined with that of HSBC Finance into a single HSBC North America qualified defined benefit pension plan (either the “HSBC North America Pension Plan” or the “Plan”) which facilitates the development of a unified employee benefit policy and unified employee benefit plan administration for HSBC companies operating in the U.S. The following table reflects the portion of pension expense and its related components of the HSBC North America Pension Plan which has been allocated to us and is recorded in our consolidated statement of income (loss).



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
							(in millions)
Service cost – benefits earned during the period	$	1		$	4		$	3		$	11
Interest cost on projected benefit obligation	18			17			52			52
Expected return on assets	(19		)	(23		)	(60		)	(66		)
Amortization of prior service cost (benefit)	—			(1		)	—			(4		)
Recognized losses	10			13			36			34
Curtailment benefit recognized	—			(29		)	—			(31		)
Pension expense	$	10		$	(19	)	$	31		$	(4	)

Pension expense in 2012 reflects the recognition of a curtailment benefit associated with the decision in the third quarter of 2012 to cease all future contributions under the Cash Balance formula and freeze the Plan effective January 1, 2013.

Postretirement Plans Other Than Pensions Our employees also participate in plans which provide medical, dental and life insurance benefits to retirees and eligible dependents. These plans cover substantially all employees who meet certain age and vested service requirements. We have instituted dollar limits on payments under the plans to control the cost of future medical benefits. The following table reflects the components of the net periodic postretirement benefit cost:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
					(in millions)
Service cost – benefits earned during the period	$	—	$	1	$	—	$	1
Interest cost	$	1	$	—	$	2	$	2
Amortization of transition obligation	—		1		—		2
Net periodic postretirement benefit cost	$	1	$	2	$	2	$	5