v3.3.1.900
Retirement Benefits Plans (Tables)
 12 Months Ended
Dec. 31, 2015
Compensation and Retirement Disclosure [Abstract]  
Obligations and funded status
Obligations and Funded Status
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Funded status
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
$
2,934

 
$
3,086

 
$
1,472

 
$
1,535

 
$
93

 
$
116

Benefit obligations
(3,829
)
 
(4,047
)
 
(2,175
)
 
(2,337
)
 
(575
)
 
(676
)
Funded status
$
(895
)
 
$
(961
)
 
$
(703
)
 
$
(802
)
 
$
(482
)
 
$
(560
)
 
 
 
 
 
 
 
 
 
 
 
 
Amounts recognized in the Consolidated
   Balance Sheets
 
 
 
 
 
 
 
 
 
 
 
Non-current assets
$
11

 
$
14

 
$
57

 
$
77

 
$
—

 
$
—

Current liabilities
(57
)
 
(16
)
 
(23
)
 
(26
)
 
(42
)
 
(47
)
Non-current liabilities
(849
)
 
(959
)
 
(737
)
 
(853
)
 
(440
)
 
(513
)
Total
$
(895
)
 
$
(961
)
 
$
(703
)
 
$
(802
)
 
$
(482
)
 
$
(560
)
 
 
 
 
 
 
 
 
 
 
 
 
Amounts recognized in Accumulated other
   comprehensive loss (pretax)
 
 
 
 
 
 
 
 
 
 
 
Net actuarial loss
$
1,322

 
$
1,377

 
$
644

 
$
695

 
$
95

 
$
176

Prior service cost (credit)
5

 
5

 
9

 
11

 
(74
)
 
(86
)
Total
$
1,327

 
$
1,382

 
$
653

 
$
706

 
$
21

 
$
90
Change in benefit obligations
Change in Benefit Obligations
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Balance at January 1
$
4,047

 
$
3,625

 
$
2,337

 
$
2,127

 
$
676

 
$
867

Service cost
123

 
117

 
71

 
66

 
6

 
13

Interest cost
156

 
162

 
72

 
85

 
24

 
32

Actuarial (gain) loss
(179
)
 
470

 
(23
)
 
355

 
(66
)
 
(36
)
Gross benefits paid
(318
)
 
(329
)
 
(100
)
 
(106
)
 
(86
)
 
(91
)
Currency translation
—

 
—

 
(182
)
 
(190
)
 
(8
)
 
(4
)
Plan amendments
—


2


—


—


(1
)

(84
)
Other
—

 
—

 
—

 
—

 
30

 
(21
)
Balance at December 31
$
3,829

 
$
4,047

 
$
2,175

 
$
2,337

 
$
575

 
$
676

 
 
 
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
$
3,672

 
$
3,894

 
$
2,049

 
$
2,181

 
 
 
 
Change in plan assets
Change in Plan Assets
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Balance at January 1
$
3,086

 
$
2,940

 
$
1,535

 
$
1,432

 
$
116

 
$
138

Actual return on plan assets
(55
)
 
226

 
29

 
191

 
1

 
4

Employer contributions
221

 
248

 
109

 
114

 
31

 
40

Gross benefits paid
(318
)
 
(329
)
 
(100
)
 
(106
)
 
(86
)
 
(91
)
Currency translation
—

 
—

 
(101
)
 
(96
)
 
—

 
—

Other
—

 
1

 
—

 
—

 
31

 
25

Balance at December 31
$
2,934

 
$
3,086

 
$
1,472

 
$
1,535

 
$
93

 
$
116
Components of pension plans with accumulated benefit obligations in excess of plan assets
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
 
2015
 
2014
 
2015
 
2014
Projected benefit obligation
$
3,376

 
$
3,557

 
$
1,387

 
$
1,524

Accumulated benefit obligation
3,219

 
3,403

 
1,328

 
1,446

Fair value of plan assets
2,470

 
2,581

 
650

 
673
Changes in pension and other postretirement benefits liabilities recognized in Accumulated other comprehensive loss
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
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Balance at January 1
$
1,382

 
$
1,054

 
$
706

 
$
528

 
$
90

 
$
184

Prior service cost arising during the year
—

 
2

 
—

 
—

 
(1
)
 
(84
)
Net loss (gain) arising during the year
138

 
490

 
47

 
262

 
(62
)
 
(34
)
Currency translation
—

 
—

 
(58
)
 
(55
)
 
(4
)
 
(1
)
Less amounts included in expense during the year
(193
)
 
(164
)
 
(42
)
 
(29
)
 
(2
)
 
25

Net change for the year
(55
)
 
328

 
(53
)
 
178

 
(69
)
 
(94
)
Balance at December 31
$
1,327

 
$
1,382

 
$
653

 
$
706

 
$
21

 
$
90
Benefits expense
Benefits Expense
 
United States
pension benefit expense
 
Non-United States
pension benefit expense
 
Other postretirement
benefits expense
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Service cost
$
123

 
$
117

 
$
128

 
$
71

 
$
66

 
$
62

 
$
6

 
$
13

 
$
20

Interest cost
156

 
162

 
147

 
72

 
85

 
80

 
24

 
32

 
35

Expected return on plan assets
(262
)
 
(246
)
 
(226
)
 
(99
)
 
(98
)
 
(85
)
 
(5
)
 
(6
)
 
(6
)
Amortization
119

 
93

 
133

 
40

 
27

 
27

 
2

 
6

 
14

 
136

 
126

 
182

 
84

 
80

 
84

 
27

 
45

 
63

Settlements, curtailments
   and other
74

 
71

 
53

 
2

 
2

 
2

 
—

 
(31
)
 
—

Total expense
$
210

 
$
197

 
$
235

 
$
86

 
$
82

 
$
86

 
$
27

 
$
14

 
$
63
Estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost
The estimated pretax net amounts that will be recognized from Accumulated other comprehensive loss into net periodic benefit cost in 2016 follow:
 
United States
pension liabilities
 
Non-United States
pension liabilities
 
Other postretirement
liabilities
Actuarial loss
$
165

 
$
34

 
$
5

Prior service cost (credit)
1

 
1

 
(14
)
Total
$
166

 
$
35

 
$
(9
)
Assumptions used to determine other postretirement obligations and expense
Pension Plans
 
United States
pension plans
 
Non-United States
pension plans
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Assumptions used to determine benefit obligation at year-end
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.22
%
 
3.97
%
 
4.67
%
 
3.46
%
 
3.33
%
 
4.20
%
Rate of compensation increase
3.18
%
 
3.16
%
 
3.16
%
 
3.12
%
 
3.13
%
 
3.12
%
 
 
 
 
 
 
 
 
 
 
 
 
Assumptions used to determine expense
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.97
%
 
4.67
%
 
3.97
%
 
3.33
%
 
4.20
%
 
4.17
%
Expected long-term return on plan assets
8.50
%
 
8.40
%
 
8.45
%
 
6.92
%
 
7.00
%
 
6.92
%
Rate of compensation increase
3.16
%
 
3.16
%
 
3.16
%
 
3.13
%
 
3.12
%
 
3.09
%
Assumptions used to determine other postretirement benefits obligations and expense
Assumptions used to determine other postretirement benefits obligations and expense follow:
 
Other postretirement
benefits plans
 
2015
 
2014
 
2013
Assumptions used to determine benefit obligation at year-end
 
 
 
 
 
Discount rate
4.04
%
 
3.79
%
 
4.48
%
Health care cost trend rate assumed for next year
7.10
%
 
6.31
%
 
6.64
%
Ultimate health care cost trend rate
4.75
%
 
4.77
%
 
4.77
%
Year ultimate health care cost trend rate is achieved
2025

 
2024

 
2023

 
 
 
 
 
 
Assumptions used to determine expense
 
 
 
 
 
Discount rate
3.79
%
 
4.48
%
 
3.79
%
Initial health care cost trend rate
6.31
%
 
6.64
%
 
6.96
%
Ultimate health care cost trend rate
4.77
%
 
4.77
%
 
4.53
%
Year ultimate health care cost trend rate is achieved
2024

 
2023

 
2022
1-percentage change in the assumed health care cost trend rates
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
17

 
(16
)
Employer contributions to pension plans
Contributions to pension plans that Eaton expects to make in 2016, and made in 2015, 2014 and 2013, follow:
 
2016
 
2015
 
2014
 
2013
United States plans
$
59

 
$
221

 
$
248

 
$
196

Non-United States plans
103

 
109

 
114

 
145

Total contributions
$
162

 
$
330

 
$
362

 
$
341
Expected pension and other postretirement benefit payments and expected subsidy
For other postretirement benefits liabilities, the expected subsidy receipts related to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 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
2016
$
334

 
$
81

 
$
65

 
$
(5
)
2017
270

 
82

 
61

 
(4
)
2018
280

 
85

 
57

 
(4
)
2019
287

 
86

 
52

 
(3
)
2020
292

 
89

 
48

 
(2
)
2021 - 2025
1,515

 
491

 
199

 
(10
)
Fair value of pension plan assets
A summary of the fair value of pension plan assets at December 31, 2015 and 2014, follows:
 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2015
 
 
 
 
 
 
 
Common collective trusts
 
 
 
 
 
 
 
Non-United States equity and global equities
$
1,347

 
$
—

 
$
1,347

 
$
—

United States equity
953

 
—

 
953

 
—

Fixed income
514

 
—

 
514

 
—

Exchange traded funds
158

 
—

 
158

 
—

Fixed income securities
357

 
—

 
357

 
—

United States treasuries
105

 
105

 
—

 
—

Bank loans
136


—


136


—

Real estate securities
251

 
244

 
—

 
7

Equity securities
98

 
98

 
—

 
—

Cash equivalents
246

 
17

 
229

 
—

Hedge funds
92


—


—


92

Exchange traded funds
49

 
49

 
—

 
—

Other
100

 
—

 
14

 
86

Total pension plan assets
$
4,406

 
$
513

 
$
3,708

 
$
185

 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2014
 
 
 
 
 
 
 
Common collective trusts
 
 
 
 
 
 
 
Non-United States equity and global equities
$
1,458

 
$
—

 
$
1,458

 
$
—

United States equity
1,005

 
—

 
1,005

 
—

Fixed income
646

 
—

 
646

 
—

Exchange traded funds
138

 
—

 
138

 
—

Fixed income securities
398

 
—

 
398

 
—

United States treasuries
106

 
106

 
—

 
—

Bank loans
128

 
—

 
128

 
—

Real estate securities
263

 
257

 
—

 
6

Equity securities
92

 
92

 
—

 
—

Cash equivalents
218

 
8

 
210

 
—

Hedge funds
54

 
—

 
—

 
54

Exchange traded funds
50

 
50

 
—

 
—

Other
65

 
—

 
5

 
60

Total pension plan assets
$
4,621

 
$
513

 
$
3,988

 
$
120
Fair value measurement of plan assets using significant unobservable inputs
The fair value measurement of plan assets using significant unobservable inputs (Level 3) changed during 2014 and 2015 due to the following:
 
Real Estate
 
Hedge Funds
 
Other
 
Total
Balance at December 31, 2013
$
6

 
$
—

 
$
94

 
$
100

Actual return on plan assets:
 
 
 
 
 
 
 
Gains (losses) relating to assets still held at year-end
—

 
1

 
(3
)
 
(2
)
Purchases, sales, settlements - net
—

 
53

 
—

 
53

Transfers into or out of Level 3
—

 
—

 
(31
)
 
(31
)
Balance at December 31, 2014
6

 
54

 
60

 
120

Actual return on plan assets:
 
 
 
 
 
 
 
Gains (losses) relating to assets still held at year-end
1

 
(5
)
 
(2
)
 
(6
)
Purchases, sales, settlements - net
—

 
43

 
37

 
80

Transfers into or out of Level 3
—

 
—

 
(9
)
 
(9
)
Balance at December 31, 2015
$
7

 
$
92

 
$
86

 
$
185
Fair value of other postretirement benefits plan assets
A summary of the fair value of other postretirement benefits plan assets at December 31, 2015 and 2014, follows:
 
Total
 
Quoted prices
in active
markets for
identical assets
(Level 1)
 
Other
observable
inputs
(Level 2)
 
Unobservable
inputs
(Level 3)
2015
 
 
 
 
 
 
 
Common collective trusts
 
 
 
 
 
 
 
Global equities
$
44

 
$
—

 
$
44

 
$
—

Fixed income securities
18

 
—

 
18

 
—

United States treasuries
20

 
20

 
—

 
—

Cash equivalents
11

 
11

 
—

 
—

Total other postretirement benefits plan assets
$
93

 
$
31

 
$
62

 
$
—


2014
 
 
 
 
 
 
 
Common collective trusts
 
 
 
 
 
 
 
Global equities
$
54

 
$
—

 
$
54

 
$
—

Fixed income securities
24

 
—

 
24

 
—

United States treasuries
37

 
37

 
—

 
—

Cash equivalents
1

 
1

 
—

 
—

Total other postretirement benefits plan assets
$
116

 
$
38

 
$
78

 
$
—
Employer contributions to defined contribution benefit plans, charged to expense
The total contributions related to these plans are charged to expense and were as follows:
2015
$
137

2014
141

2013
121