Employee Benefits

Chevron has defined benefit pension plans for many employees. The company typically prefunds defined benefit plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the United States, all qualified plans are subject to the Employee Retirement Income Security Act (ERISA) minimum funding standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding requirements under laws and regulations because contributions to these pension plans may be less economic and investment returns may be less attractive than the company’s other investment alternatives.

The company also sponsors other postretirement employee benefit (OPEB) plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and the retirees share the costs. Medical coverage for Medicare-eligible retirees in the company’s

main U.S. medical plan is secondary to Medicare (including Part D) and the increase to the company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company.

The components of net periodic benefit costs for 2014 and 2013 are as follows:



	Three months ended March 31
	2014			2013
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	113		$	124
Interest cost	124			118
Expected return on plan assets	(197		)	(175		)
Amortization of prior service (credits)	(2		)	—
Amortization of actuarial losses	52			121
Settlement losses	33			57
Total United States	123			245
International
Service cost	47			48
Interest cost	84			77
Expected return on plan assets	(76		)	(68		)
Amortization of prior service costs	5			5
Amortization of actuarial losses	24			36
Total International	84			98
Net Periodic Pension Benefit Costs	$	207		$	343
Other Benefits*
Service cost	$	13		$	18
Interest cost	37			40
Amortization of prior service costs (credits)	3			(12		)
Amortization of actuarial losses	2			13
Net Periodic Other Benefit Costs	$	55		$	59

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* Includes costs for U.S. and international OPEB plans. Obligations for plans outside the United States are not significant relative to the company’s total OPEB obligation.

At the end of 2013, the company estimated it would contribute $700 million to employee pension plans during 2014 (composed of $350 million for the U.S. plans and $350 million for the international plans). Through March 31, 2014, a total of $89 million was contributed (including $50 million to the U.S. plans). Actual contribution amounts are dependent upon plan investment returns, changes in pension obligations, regulatory requirements and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.

During the first three months of 2014, the company contributed $52 million to its OPEB plans. The company anticipates contributing approximately $163 million during the remainder of 2014.