Employee Benefits

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

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. Beginning in 2017, medical coverage for Medicare-eligible retirees in the company's main U.S. medical plan is provided through a third-party private exchange. The increase to the pre-Medicare 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 2017 and 2016 are as follows:

	Three Months Ended March 31
	2017			2016
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	122		$	123
Interest cost	91			94
Expected return on plan assets	(149		)	(181		)
Amortization of prior service credits	(1		)	(2		)
Amortization of actuarial losses	85			84
Settlement losses	78			81
Total United States	226			199
International
Service cost	37			40
Interest cost	53			67
Expected return on plan assets	(58		)	(62		)
Amortization of prior service costs	3			4
Amortization of actuarial losses	9			11
Settlement losses	—			—
Total International	44			60
Net Periodic Pension Benefit Costs	$	270		$	259
Other Benefits*
Service cost	$	8		$	15
Interest cost	23			32
Amortization of prior service costs	(7		)	3
Amortization of actuarial losses	(1		)	5
Net Periodic Other Benefit Costs	$	23		$	55

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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.

Through March 31, 2017, a total of $170 million was contributed to employee pension plans (including $95 million to the U.S. plans.) Total contributions for the full year are currently estimated to be $450 million ($200 million for the U.S. plans and $250 million for the international plans.) The company anticipates it will not make contributions to the primary U.S. pension plan for the remainder of 2017. 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 2017, the company contributed $35 million to its OPEB plans. The company anticipates contributing approximately $128 million during the remainder of 2017.