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 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 2015 and 2014 are as follows:



	Three Months Ended September 30						Nine Months Ended September 30
	2015			2014			2015			2014
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	135		$	113		$	404		$	338
Interest cost	125			124			376			371
Expected return on plan assets	(195		)	(197		)	(587		)	(591		)
Amortization of prior service credits	(3		)	(3		)	(7		)	(7		)
Amortization of actuarial losses	89			52			267			157
Settlement losses	87			48			195			114
Total United States	238			137			648			382
International
Service cost	46			46			140			143
Interest cost	68			84			209			257
Expected return on plan assets	(66		)	(75		)	(196		)	(227		)
Amortization of prior service costs	5			6			16			16
Amortization of actuarial losses	19			23			60			74
Total International	72			84			229			263
Net Periodic Pension Benefit Costs	$	310		$	221		$	877		$	645
Other Benefits*
Service cost	$	18		$	13		$	54		$	38
Interest cost	37			37			112			112
Amortization of prior service costs	3			3			10			10
Amortization of actuarial losses	9			2			26			5
Net Periodic Other Benefit Costs	$	67		$	55		$	202		$	165

__________________________

* 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 2014, the company estimated it would contribute $600 million to employee pension plans during 2015 (composed of $350 million for the U.S. plans and $250 million for the international plans). Through September 30, 2015, a total of $719 million was contributed (including $600 million to the U.S. plans). Total contributions for the full year are currently estimated to be $850 million ($600 million for the U.S. plans and $250 million for the international 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 nine months of 2015, the company contributed $148 million to its OPEB plans. The company anticipates contributing approximately $50 million during the remainder of 2015.