v2.4.0.8

Retirement Benefits Plans | 12 Months Ended
--- | ---
Dec. 31, 2013
General Discussion of Pension and Other Postretirement Benefits [Abstract] |
RETIREMENT BENEFITS PLANS | RETIREMENT BENEFITS PLANS Eaton has defined benefits pension plans and other postretirement benefits plans. Obligations and Funded Status
| United States pension liabilities |  | Non-United States pension liabilities |  | Other postretirement liabilities
| 2013 |  | 2012 |  | 2013 |  | 2012 |  | 2013 |  | 2012
Funded status |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets | $ | 2,940 |  |  | $ | 2,607 |  |  | $ | 1,432 |  |  | $ | 1,248 |  |  | $ | 138 |  |  | $ | 146 |
Benefit obligations | (3,625 | ) |  | (3,817 | ) |  | (2,127 | ) |  | (2,017 | ) |  | (867 | ) |  | (950 | )
Funded status | $ | (685 | ) |  | $ | (1,210 | ) |  | $ | (695 | ) |  | $ | (769 | ) |  | $ | (729 | ) |  | $ | (804 | )
Amounts recognized in the Consolidated Balance Sheets |  |  |  |  |  |  |  |  |  |  |
Non-current assets | $ | 44 |  |  | $ | — |  |  | $ | 86 |  |  | $ | 72 |  |  | $ | — |  |  | $ | — |
Current liabilities | (15 | ) |  | (15 | ) |  | (30 | ) |  | (33 | ) |  | (61 | ) |  | (62 | )
Non-current liabilities | (714 | ) |  | (1,195 | ) |  | (751 | ) |  | (808 | ) |  | (668 | ) |  | (742 | )
Total | $ | (685 | ) |  | $ | (1,210 | ) |  | $ | (695 | ) |  | $ | (769 | ) |  | $ | (729 | ) |  | $ | (804 | )
Amounts recognized in Accumulated other comprehensive loss (pretax) |  |  |  |  |  |  |  |  |  |  |
Net actuarial loss | $ | 1,051 |  |  | $ | 1,618 |  |  | $ | 515 |  |  | $ | 550 |  |  | $ | 190 |  |  | $ | 269 |
Prior service cost (credit) | 3 |  |  | 1 |  |  | 13 |  |  | 9 |  |  | (6 | ) |  | (7 | )
Other | — |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 1,054 |  |  | $ | 1,621 |  |  | $ | 528 |  |  | $ | 559 |  |  | $ | 184 |  |  | $ | 262 |
Change in Benefit Obligations
| United States pension liabilities |  | Non-United States pension liabilities |  | Other postretirement liabilities
| 2013 |  | 2012 |  | 2013 |  | 2012 |  | 2013 |  | 2012
Balance at January 1 | $ | 3,817 |  |  | $ | 2,899 |  |  | $ | 2,017 |  |  | $ | 1,505 |  |  | $ | 950 |  |  | $ | 853 |
Service cost | 128 |  |  | 115 |  |  | 62 |  |  | 50 |  |  | 20 |  |  | 17 |
Interest cost | 147 |  |  | 134 |  |  | 80 |  |  | 77 |  |  | 35 |  |  | 38 |
Actuarial (gain) loss | (223 | ) |  | 264 |  |  | 21 |  |  | 196 |  |  | (54 | ) |  | 34 |
Gross benefits paid | (246 | ) |  | (132 | ) |  | (90 | ) |  | (78 | ) |  | (103 | ) |  | (94 | )
Currency translation | — |  |  | — |  |  | 36 |  |  | 54 |  |  | (2 | ) |  | — |
Acquisitions | — |  |  | 536 |  |  | — |  |  | 212 |  |  | — |  |  | 74 |
Other | 2 |  |  | 1 |  |  | 1 |  |  | 1 |  |  | 21 |  |  | 28 |
Balance at December 31 | $ | 3,625 |  |  | $ | 3,817 |  |  | $ | 2,127 |  |  | $ | 2,017 |  |  | $ | 867 |  |  | $ | 950 |
Accumulated benefit obligation | $ | 3,458 |  |  | $ | 3,639 |  |  | $ | 2,003 |  |  | $ | 1,885 |  |  |  |  |
Change in Plan Assets
| United States pension liabilities |  | Non-United States pension liabilities |  | Other postretirement liabilities
| 2013 |  | 2012 |  | 2013 |  | 2012 |  | 2013 |  | 2012
Balance at January 1 | $ | 2,607 |  |  | $ | 1,664 |  |  | $ | 1,248 |  |  | $ | 989 |  |  | $ | 146 |  |  | $ | 156 |
Actual return on plan assets | 383 |  |  | 293 |  |  | 118 |  |  | 86 |  |  | 15 |  |  | 13 |
Employer contributions | 196 |  |  | 311 |  |  | 145 |  |  | 102 |  |  | 59 |  |  | 43 |
Gross benefits paid | (246 | ) |  | (132 | ) |  | (90 | ) |  | (78 | ) |  | (103 | ) |  | (94 | )
Currency translation | — |  |  | — |  |  | 15 |  |  | 39 |  |  | — |  |  | — |
Acquisitions | — |  |  | 471 |  |  | — |  |  | 128 |  |  | — |  |  | — |
Other | — |  |  | — |  |  | (4 | ) |  | (18 | ) |  | 21 |  |  | 28 |
Balance at December 31 | $ | 2,940 |  |  | $ | 2,607 |  |  | $ | 1,432 |  |  | $ | 1,248 |  |  | $ | 138 |  |  | $ | 146 |
The components of pension plans with an accumulated benefit obligation in excess of plan assets at December 31 follow:
| United States pension liabilities |  | Non-United States pension liabilities
| 2013 |  | 2012 |  | 2013 |  | 2012
Projected benefit obligation | $ | 3,166 |  |  | $ | 3,817 |  |  | $ | 1,411 |  |  | $ | 1,412 |
Accumulated benefit obligation | 2,999 |  |  | 3,639 |  |  | 1,349 |  |  | 1,307 |
Fair value of plan assets | 2,437 |  |  | 2,607 |  |  | 635 |  |  | 657 |
Changes in pension and other postretirement benefit liabilities recognized in Accumulated other comprehensive loss follow:
| United States pension liabilities |  | Non-United States pension liabilities |  | Other postretirement liabilities
| 2013 |  | 2012 |  | 2013 |  | 2012 |  | 2013 |  | 2012
Balance at January 1 | $ | 1,621 |  |  | $ | 1,602 |  |  | $ | 559 |  |  | $ | 358 |  |  | $ | 262 |  |  | $ | 248 |
Prior service cost arising during the year | 2 |  |  | 1 |  |  | 4 |  |  | — |  |  | — |  |  | — |
Net (gain) loss arising during the year | (381 | ) |  | 154 |  |  | (12 | ) |  | 205 |  |  | (63 | ) |  | 27 |
Currency translation | — |  |  | — |  |  | 6 |  |  | 15 |  |  | (1 | ) |  | — |
Less amounts included in expense during the year | (186 | ) |  | (138 | ) |  | (29 | ) |  | (19 | ) |  | (14 | ) |  | (13 | )
Other | (2 | ) |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |
Net change for the year | (567 | ) |  | 19 |  |  | (31 | ) |  | 201 |  |  | (78 | ) |  | 14 |
Balance at December 31 | $ | 1,054 |  |  | $ | 1,621 |  |  | $ | 528 |  |  | $ | 559 |  |  | $ | 184 |  |  | $ | 262 |
Benefits Expense
| United States pension benefit expense |  | Non-United States pension benefit expense |  | Other postretirement benefits expense
| 2013 |  | 2012 |  | 2011 |  | 2013 |  | 2012 |  | 2011 |  | 2013 |  | 2012 |  | 2011
Service cost | $ | 128 |  |  | $ | 115 |  |  | $ | 93 |  |  | $ | 62 |  |  | $ | 50 |  |  | $ | 48 |  |  | $ | 20 |  |  | $ | 17 |  |  | $ | 15 |
Interest cost | 147 |  |  | 134 |  |  | 132 |  |  | 80 |  |  | 77 |  |  | 78 |  |  | 35 |  |  | 38 |  |  | 41 |
Expected return on plan assets | (226 | ) |  | (183 | ) |  | (164 | ) |  | (85 | ) |  | (77 | ) |  | (70 | ) |  | (6 | ) |  | (6 | ) |  | — |
Amortization | 133 |  |  | 118 |  |  | 75 |  |  | 27 |  |  | 15 |  |  | 13 |  |  | 14 |  |  | 13 |  |  | 12 |
| 182 |  |  | 184 |  |  | 136 |  |  | 84 |  |  | 65 |  |  | 69 |  |  | 63 |  |  | 62 |  |  | 68 |
Curtailment loss | — |  |  | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | — |
Settlement loss | 53 |  |  | 20 |  |  | 17 |  |  | 1 |  |  | 3 |  |  | 4 |  |  | — |  |  | — |  |  | — |
Total expense | $ | 235 |  |  | $ | 204 |  |  | $ | 153 |  |  | $ | 86 |  |  | $ | 69 |  |  | $ | 74 |  |  | $ | 63 |  |  | $ | 62 |  |  | $ | 68 |
The estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost in 2014 follow:
| United States pension liabilities |  | Non-United States pension liabilities |  | Other postretirement liabilities
Actuarial loss | $ | 155 |  |  | $ | 26 |  |  | $ | 9 |
Prior service cost (credit) | — |  |  | 1 |  |  | (2 | )
Total | $ | 155 |  |  | $ | 27 |  |  | $ | 7 |
Retirement Benefits Plans Assumptions Pension Plans
| United States pension plans |  | Non-United States pension plans
| 2013 |  | 2012 |  | 2011 |  | 2013 |  | 2012 |  | 2011
Assumptions used to determine benefit obligation at year-end |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.67 | % |  | 3.97 | % |  | 4.70 | % |  | 4.20 | % |  | 4.17 | % |  | 5.12 | %
Rate of compensation increase | 3.16 | % |  | 3.16 | % |  | 3.15 | % |  | 3.12 | % |  | 3.09 | % |  | 3.62 | %
Assumptions used to determine expense |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.97 | % |  | 4.70 | % |  | 5.50 | % |  | 4.17 | % |  | 5.12 | % |  | 5.40 | %
Expected long-term return on plan assets | 8.45 | % |  | 8.50 | % |  | 8.50 | % |  | 6.92 | % |  | 7.10 | % |  | 7.17 | %
Rate of compensation increase | 3.16 | % |  | 3.15 | % |  | 3.61 | % |  | 3.09 | % |  | 3.62 | % |  | 3.63 | %
The expected long-term rate of return on pension assets was determined for each country and reflects long-term historical data taking into account each plan's target asset allocation. The discount rate was determined using appropriate bond data for each country. Other Postretirement Benefits Plans Substantially all of the obligation for other postretirement benefits plans relates to United States plans. Assumptions used to determine other postretirement benefits obligations and expense follow:
| Other postretirement benefits plans
| 2013 |  | 2012 |  | 2011
Assumptions used to determine benefit obligation at year-end |  |  |  |  |
Discount rate | 4.48 | % |  | 3.79 | % |  | 4.60 | %
Health care cost trend rate assumed for next year | 6.64 | % |  | 6.96 | % |  | 7.60 | %
Ultimate health care cost trend rate | 4.77 | % |  | 4.53 | % |  | 4.50 | %
Year ultimate health care cost trend rate is achieved | 2023 |  |  | 2022 |  |  | 2020 |
Assumptions used to determine expense |  |  |  |  |
Discount rate | 3.79 | % |  | 4.60 | % |  | 5.20 | %
Initial health care cost trend rate | 6.96 | % |  | 7.60 | % |  | 8.10 | %
Ultimate health care cost trend rate | 4.53 | % |  | 4.50 | % |  | 4.50 | %
Year ultimate health care cost trend rate is achieved | 2022 |  |  | 2020 |  |  | 2020 |
Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A 1-percentage point change in the assumed health care cost trend rates would have the following effects:
| 1% increase |  | 1% decrease
Effect on total service and interest cost | $ | 1 |  |  | $ | (1 | )
Effect on other postretirement liabilities | 21 |  |  | (19 | )
Employer Contributions to Retirement Benefits Plans Contributions to pension plans that Eaton expects to make in 2014, and made in 2013, 2012 and 2011, follow:
| 2014 |  | 2013 |  | 2012 |  | 2011
United States plans | $ | 254 |  |  | $ | 196 |  |  | $ | 311 |  |  | $ | 264 |
Non-United States plans | 108 |  |  | 145 |  |  | 102 |  |  | 108 |
Total contributions | $ | 362 |  |  | $ | 341 |  |  | $ | 413 |  |  | $ | 372 |
During 2011, Eaton contributed $154 into a Voluntary Employee Benefit Association (VEBA) trust for the pre-funding of postretirement Medicare Part D prescription drug benefits for the Company's eligible United States employees and retirees. The following table provides the estimated pension and other postretirement benefit payments for each of the next five years, and the five years thereafter in the aggregate. For other postretirement benefits liabilities, the expected subsidy receipts relate to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which would reduce the gross payments listed below.
| Estimated United States pension payments |  | Estimated non-United States pension payments |  | Estimated other postretirement benefit payments
|  |  | Gross |  | Medicare prescription drug subsidy
2014 | $ | 314 |  |  | $ | 91 |  |  | $ | 93 |  |  | $ | (6 | )
2015 | 256 |  |  | 92 |  |  | 86 |  |  | (6 | )
2016 | 273 |  |  | 94 |  |  | 82 |  |  | (6 | )
2017 | 277 |  |  | 99 |  |  | 78 |  |  | (5 | )
2018 | 283 |  |  | 101 |  |  | 74 |  |  | (4 | )
2019 - 2023 | 1,499 |  |  | 545 |  |  | 316 |  |  | (13 | )
Pension Plan Assets Investment policies and strategies are developed on a country specific basis. The United States plans, representing 67% of worldwide pension assets, and the United Kingdom plans representing 26% of worldwide pension assets, are invested primarily for growth, as the majority of the assets are in plans with active participants and ongoing accruals. In general, the plans have their primary allocation to diversified, global equities, primarily through index funds in the form of common collective trusts. The United States plans' target allocation is 36% United States equities, 32% non-United States equities, 7% real estate (primarily equity of real estate investment trusts) and 25% debt securities and other, including cash equivalents. The United Kingdom plans' target asset allocations are 57% equities and the remainder in debt securities and real estate investments. The equity risk for the plans is managed through broad geographic diversification and diversification across industries and levels of market capitalization. The majority of debt allocations for these plans are longer duration government and corporate debt. The United States pension plans are authorized to use derivatives to achieve more economically desired market exposures and to use futures, swaps and options to gain or hedge exposures. Other Postretirement Benefits Plan Assets The VEBA trust which holds U.S. other postretirement benefits plan assets has investment guidelines that include allocations to global equities and fixed income investments. The trust's target investment allocation is 50% diversified global equities and 50% fixed income securities. The fixed income securities are primarily comprised of intermediate term, high quality, dollar denominated, fixed income instruments. The equity allocation is invested in a diversified global equity index fund in the form of a collective trust. Fair Value Measurements Financial instruments included in pension and other postretirement benefits plan assets are categorized into a fair value hierarchy of three levels, based on the degree of subjectivity inherent in the valuation methodology as follows:
Level 1 - | Quoted prices (unadjusted) for identical assets in active markets.
Level 2 - | Quoted prices for similar assets in active markets, and inputs that are observable for the asset, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 - | Unobservable prices or inputs.
Pension Plans A summary of the fair value of pension plan assets at December 31, 2013 and 2012, follows:
| Total |  | Quoted prices in active markets for identical assets (Level 1) |  | Other observable inputs (Level 2) |  | Unobservable inputs (Level 3)
2013 |  |  |  |  |  |  |
Common collective trusts |  |  |  |  |  |  |
Non-United States equity and global equities | $ | 1,453 |  |  | $ | — |  |  | $ | 1,453 |  |  | $ | — |
United States equity | 1,153 |  |  | — |  |  | 1,153 |  |  | — |
Fixed income | 609 |  |  | — |  |  | 609 |  |  | — |
Long duration funds | 63 |  |  | — |  |  | 63 |  |  | — |
Exchange traded funds | 64 |  |  | — |  |  | 64 |  |  | — |
Fixed income securities | 274 |  |  | — |  |  | 274 |  |  | — |
United States treasuries | 63 |  |  | 63 |  |  | — |  |  | — |
Real estate securities | 220 |  |  | 214 |  |  | — |  |  | 6 |
Equity securities | 141 |  |  | 141 |  |  | — |  |  | — |
Cash equivalents | 187 |  |  | 6 |  |  | 181 |  |  | — |
Exchange traded funds | 47 |  |  | 47 |  |  | — |  |  | — |
Other | 98 |  |  | — |  |  | 4 |  |  | 94 |
Total pension plan assets | $ | 4,372 |  |  | $ | 471 |  |  | $ | 3,801 |  |  | $ | 100 |
| Total |  | Quoted prices in active markets for identical assets (Level 1) |  | Other observable inputs (Level 2) |  | Unobservable inputs (Level 3)
2012 |  |  |  |  |  |  |
Common collective trusts |  |  |  |  |  |  |
Non-United States equity and global equities | $ | 1,313 |  |  | $ | — |  |  | $ | 1,313 |  |  | $ | — |
United States equity | 978 |  |  | — |  |  | 978 |  |  | — |
Fixed income | 538 |  |  | — |  |  | 538 |  |  | — |
Long duration funds | 61 |  |  | — |  |  | 61 |  |  | — |
Exchange traded funds | 43 |  |  | — |  |  | 43 |  |  | — |
Fixed income securities | 331 |  |  | — |  |  | 331 |  |  | — |
United States treasuries | 143 |  |  | 143 |  |  | — |  |  | — |
Real estate securities | 124 |  |  | 119 |  |  | — |  |  | 5 |
Equity securities | 104 |  |  | 104 |  |  | — |  |  | — |
Cash equivalents | 140 |  |  | 7 |  |  | 133 |  |  | — |
Exchange traded funds | 40 |  |  | 40 |  |  | — |  |  | — |
Other | 40 |  |  | 3 |  |  | 1 |  |  | 36 |
Total pension plan assets | $ | 3,855 |  |  | $ | 416 |  |  | $ | 3,398 |  |  | $ | 41 |
Other Postretirement Benefits Plans A summary of the fair value of other postretirement benefits plan assets at December 31, 2013 and 2012, follows:
| Total |  | Quoted prices in active markets for identical assets (Level 1) |  | Other observable inputs (Level 2) |  | Unobservable inputs (Level 3)
2013 |  |  |  |  |  |  |
Common collective trusts |  |  |  |  |  |  |
Global equities | $ | 70 |  |  | $ | — |  |  | $ | 70 |  |  | $ | — |
Fixed income securities | 29 |  |  | — |  |  | 29 |  |  | — |
United States treasuries | 38 |  |  | 38 |  |  | — |  |  | — |
Cash equivalents | 1 |  |  | 1 |  |  | — |  |  | — |
Total other postretirement benefits plan assets | $ | 138 |  |  | $ | 39 |  |  | $ | 99 |  |  | $ | — |
2012 |  |  |  |  |  |  |
Common collective trusts |  |  |  |  |  |  |
Global equities | $ | 75 |  |  | $ | — |  |  | $ | 75 |  |  | $ | — |
Fixed income securities | 29 |  |  | — |  |  | 29 |  |  | — |
United States treasuries | 38 |  |  | 38 |  |  | — |  |  | — |
Cash equivalents | 4 |  |  | 4 |  |  | — |  |  | — |
Total other postretirement benefits plan assets | $ | 146 |  |  | $ | 42 |  |  | $ | 104 |  |  | $ | — |
Valuation Methodologies Following is a description of the valuation methodologies used for pension and other postretirement benefits plan assets measured at fair value. There have been no changes in the methodologies used at December 31, 2013 and 2012. Common collective trusts - Valued at the net unit value of units held by the trust at year end. The unit value is determined by the total value of fund assets divided by the total number of units of the fund owned. The equity investments in collective trusts are predominantly in index funds for which the underlying securities are actively traded in public markets based upon readily measurable prices. Fixed income securities - These securities consist of publicly traded United States and non-United States fixed interest obligations (principally corporate and government bonds and debentures). The fair value of corporate and government debt securities is determined through third-party pricing models that consider various assumptions, including time value, yield curves, credit ratings, and current market prices. The Company verifies the results of trustees or custodians and evaluates the pricing classification of these securities by performing analyses using other third-party sources. United States treasuries - Valued at the closing price of each security. Real estate and equity securities - These securities consist of direct investments in the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1. Cash equivalents - Primarily certificates of deposit, commercial paper, and repurchase agreements. Exchange traded funds - Valued at the closing price of the exchange traded fund's shares. Other - Primarily insurance contracts for international plans and also futures contracts and over-the-counter options. These investments are valued based on the closing prices of future contracts or indices as available on the Bloomberg or similar service, and private equity investments. For additional information regarding fair value measurements, see Note 11. Defined Contribution Plans The Company has various defined contribution benefit plans, primarily consisting of the plans in the United States. The total contributions related to these plans are charged to expense and were as follows:
2013 | $ | 121 |
2012 | 74 |
2011 | 65 |

X
- Details
Name: | us-gaap_GeneralDiscussionOfPensionAndOtherPostretirementBenefitsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration