Expense related to defined benefit and retiree health care benefit plans was as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | U.S. Defined Benefit | | U.S. Retiree Health Care | | Non-U.S. Defined Benefit |
| | 2013 | | 2012 | | 2011 | | 2013 | | 2012 | | 2011 | | 2013 | | 2012 | | 2011 |
Service cost | | $ | 26 |
| | $ | 24 |
| | $ | 22 |
| | $ | 5 |
| | $ | 5 |
| | $ | 4 |
| | $ | 41 |
| | $ | 45 |
| | $ | 41 |
|
Interest cost | | 45 |
| | 44 |
| | 46 |
| | 20 |
| | 25 |
| | 25 |
| | 61 |
| | 75 |
| | 69 |
|
Expected return on plan assets | | (48 | ) | | (50 | ) | | (45 | ) | | (24 | ) | | (23 | ) | | (21 | ) | | (67 | ) | | (78 | ) | | (83 | ) |
Amortization of prior service cost (credit) | | 1 |
| | 1 |
| | 1 |
| | 4 |
| | 3 |
| | 2 |
| | (3 | ) | | (4 | ) | | (4 | ) |
Recognized net actuarial loss | | 21 |
| | 16 |
| | 23 |
| | 11 |
| | 13 |
| | 13 |
| | 31 |
| | 41 |
| | 40 |
|
Net periodic benefit costs | | 45 |
| | 35 |
| | 47 |
| | 16 |
| | 23 |
| | 23 |
| | 63 |
| | 79 |
| | 63 |
|
| | | | | | | | | | | | | | | | | | |
Settlement losses (a) (b) | | 41 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4 |
| | 193 |
| | — |
|
Curtailment losses (gains) | | — |
| | — |
| | — |
| | — |
| | (1 | ) | | 5 |
| | (7 | ) | | — |
| | 2 |
|
Special termination benefit losses (gains) (b) | | — |
| | (1 | ) | | 4 |
| | — |
| | — |
| | — |
| | — |
| | (337 | ) | | — |
|
Total, including other postretirement losses (gains) | | $ | 86 |
| | $ | 34 |
| | $ | 51 |
| | $ | 16 |
| | $ | 22 |
| | $ | 28 |
| | $ | 60 |
| | $ | (65 | ) | | $ | 65 |
|
(a) Includes non-restructuring- and restructuring-related settlement losses.
(b) Transfer of Japan substitutional pension in 2012: In Japan, we maintain employee pension fund plans (EPFs) pursuant to the Japanese Welfare Pension Insurance Law (JWPIL). An EPF consists of two portions: a substitutional portion based on JWPIL-determined minimum old-age pension benefits similar to Social Security benefits in the United States and a corporate portion established at the discretion of each employer. Employers and employees are exempt from contributing to the Japanese Pension Insurance (JPI) if the substitutional portion is funded by an EPF.
The JWPIL was amended to permit each EPF to separate the substitutional portion and transfer those obligations and related assets to the government of Japan. After such a transfer, the employer is required to contribute periodically to JPI, and the government of Japan is responsible for future benefit payments relating to the substitutional portion.
During the third quarter of 2012, our EPF received final approval for such a separation and transferred the obligations and assets of its substitutional portion to the government of Japan. On a pre-tax basis, this resulted in a net gain of $144 million recorded in Restructuring charges/other on our Consolidated statements of income and included in Other, as shown in Note 3. This net gain of $144 million consisted of two parts - a gain of $337 million, representing the difference between the fair values of the obligations settled of $533 million and the assets transferred from the pension trust to the government of Japan of $196 million, offset by a settlement loss of $193 million related to the recognition of previously unrecognized actuarial losses included in AOCI.
