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. For the company’s main U.S. medical plan, 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 2018 and 2017 are as follows:



	Three Months Ended September 30						Nine Months Ended September 30
	2018			2017			2018			2017
	(Millions of dollars)
Pension Benefits
United States
Service cost	$	120		$	122		$	360		$	366
Interest cost	93			91			278			274
Expected return on plan assets	(159		)	(149		)	(477		)	(447		)
Amortization of prior service costs (credits)	—			(1		)	1			(3		)
Amortization of actuarial losses (gains)	76			85			228			255
Settlement losses	128			169			260			325
Total United States	258			317			650			770
International
Service cost	36			38			109			114
Interest cost	49			54			155			164
Expected return on plan assets	(62		)	(61		)	(193		)	(178		)
Amortization of prior service costs (credits)	2			3			8			9
Amortization of actuarial losses (gains)	6			11			23			33
Curtailment losses	3			—			3			—
Total International	34			45			105			142
Net Periodic Pension Benefit Costs	$	292		$	362		$	755		$	912
Other Benefits*
Service cost	$	10		$	8		$	31		$	24
Interest cost	24			23			72			71
Amortization of prior service costs (credits)	(7		)	(7		)	(21		)	(21		)
Amortization of actuarial losses (gains)	4			(1		)	11			(4		)
Net Periodic Other Benefit Costs	$	31		$	23		$	93		$	70

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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 September 30, 2018, a total of $941 million was contributed to employee pension plans (including $788 million to the U.S. plans). Total contributions for the full year are currently estimated to be $1.05 billion ($800 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 2018, the company contributed $125 million to its OPEB plans. The company anticipates contributing approximately $50 million during fourth quarter 2018.