NOTE 7 – POSTRETIREMENT BENEFIT PLANS

Our pretax net periodic benefit cost related to our qualified defined benefit pension plans and retiree medical and life insurance plans, which are reflected in net earnings from continuing operations, consisted of the following (in millions):


	Quarters Ended				Nine Months Ended
	September 25, 2016		September 27, 2015		September 25, 2016		September 27, 2015
Qualified defined benefit pension plans
Service cost	$	208	$	207	$	615	$	623
Interest cost		465		448		1,396		1,343
Expected return on plan assets		(667)		(683)		(2,000)		(2,050)
Recognized net actuarial losses		340		399		1,019		1,199
Amortization of prior service (credits) costs		(90)		(91)		(272)		(274)
Total net periodic benefit cost	$	256	$	280	$	758	$	841
Retiree medical and life insurance plans
Service cost	$	6	$	6	$	18	$	16
Interest cost		30		28		89		83
Expected return on plan assets		(34)		(37)		(103)		(111)
Recognized net actuarial losses		8		10		25		32
Amortization of prior service costs		5		1		16		3
Total net periodic benefit cost	$	15	$	8	$	45	$	23

The recognized net actuarial losses and the amortization of net prior service (credits) costs in the table above, as well as similar amounts related to our other postretirement benefit plans ($11 million and $32 million during the quarter and nine months ended September 25, 2016 and $16 million and $44 million for the quarter and nine months ended September 27, 2015), include amounts that were reclassified from accumulated other comprehensive loss (AOCL) and recorded as a component of net periodic benefit cost for the periods presented. These costs totaled $175 million (net of $96 million of tax expense) and $521 million (net of $285 million of tax expense) for the quarter and nine months ended September 25, 2016 and $212 million (net of $117 million of tax expense) and $637 million (net of $349 million of tax expense) for the quarter and nine months ended September 27, 2015, which were recorded on our statements of comprehensive income as an increase to other comprehensive income.

As a result of the divestiture and classification of the IS&GS business segment as discontinued operations, we reclassified certain pension costs that were historically allocated to and included in the operations of the IS&GS business segment. For further details on changes in the pension costs refer to “Note 3 – Acquisitions and Divestitures”.

The funding of our qualified defined benefit pension plans is determined in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Pension Protection Act of 2006 (PPA), and in a manner consistent with CAS and Internal Revenue Code rules. There were no contributions to our legacy qualified defined benefit pension plans during the quarters and nine months ended September 25, 2016 and September 27, 2015, other than insignificant contributions to the pension plan we established related to the Sikorsky acquisition. We do not plan to make contributions to our legacy pension plans in 2016 or 2017, other than insignificant contributions to the Sikorsky pension plan, because none are required using current assumptions, including anticipated investment returns on plan assets.