Pension and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2012

Pension and Other Post Retirement Benefits [Abstract]

Pension and Other Post Retirement Benefits

15.    Pensions and Other Postretirement Benefits

The components of pension expense for the defined benefit pension plan reflected in our consolidated statement of income are shown in the table below and reflect the portion of the pension expense of the combined HSBC North America Pension Plan (either the “HSBC North America Pension Plan” or the “Plan”) which has been allocated to HSBC USA Inc.:

	Three Months Ended June  30,						Six Months Ended June  30,
	2012			2011			2012			2011
	(in millions)
Service cost – benefits earned during the period	$	4		$	4		$	7		$	8
Interest cost on projected benefit obligation		18			19			35			37
Expected return on assets		(23	)		(21	)		(44	)		(41	)
Recognized losses		8			8			19			18
Amortization of prior service cost		(2	)		(1	)		(3	)		(2	)
Net periodic pension cost	$	5		$	9		$	14		$	20

Pension expense declined in 2012 due to higher expected returns on plan assets driven by higher asset levels, including additional contributions to the Plan during 2012 and 2011, as well as lower service cost and interest cost as a result of a decrease in the number of active participants in the Plan.

Components of the net periodic benefit cost for our postretirement benefits other than pensions are as follows:

	Three Months Ended June  30,				Six Months Ended June  30,
	2012		2011		2012		2011
	(in millions)
Interest cost	$	1	$	1	$	2	$	2
Amortization of transition obligation		-		-		1		1
Net periodic postretirement benefit cost	$	1	$	1	$	3	$	3