Benefit Plans

9 Months Ended

Sep. 30, 2018

Note 10. Benefit Plans

Pension Plans

Components of Net Periodic Pension Cost:

Net periodic pension cost consisted of the following:



	U.S. Plans						Non-U.S. Plans
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2018			2017			2018			2017
	(in millions)
Service cost	$	11		$	12		$	36		$	40
Interest cost	16			16			49			51
Expected return on plan assets	(22		)	(25		)	(110		)	(110		)
Amortization:
Net loss from experience differences	6			10			40			43
Prior service cost/(benefit)	—			—			(1		)	(1		)
Settlement losses and other expenses	4			6			—			—
Net periodic pension cost	$	15		$	19		$	14		$	23



	U.S. Plans						Non-U.S. Plans
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(in millions)
Service cost	$	33		$	34		$	111		$	117
Interest cost	46			47			151			148
Expected return on plan assets	(66		)	(75		)	(341		)	(322		)
Amortization:
Net loss from experience differences	26			27			124			124
Prior service cost/(benefit)	1			1			(2		)	(2		)
Settlement losses and other expenses	19			27			—			2
Net periodic pension cost	$	59		$	61		$	43		$	67

Within settlement losses and other expenses are losses of $3 million for the three and nine months ended September 30, 2018 and $1 million for the three months and $12 million for the nine months ended September 30, 2017, that are related to our Simplify to Grow Program and are recorded within asset impairment and exit costs on our condensed consolidated statements of earnings.

Employer Contributions:

During the nine months ended September 30, 2018, we contributed $6 million to our U.S. pension plans and $253 million to our non-U.S. pension plans, including $168 million to plans in the United Kingdom and Ireland. We make contributions to our pension plans in accordance with local funding arrangements and statutory minimum funding requirements. Discretionary contributions are made to the extent that they are tax deductible and do not generate an excise tax liability.

As of September 30, 2018, over the remainder of 2018, we plan to make further contributions of approximately $33 million to our U.S. plans and approximately $48 million to our non-U.S. plans. Our actual contributions may be different due to many factors, including changes in tax and other benefit laws, significant differences between expected and actual pension asset performance or interest rates.

Multiemployer Pension Plans:

In the United States, we contribute to multiemployer pension plans based on obligations arising from our collective bargaining agreements. The most individually significant multiemployer plan we participated in prior to the second quarter of 2018 was the Bakery and Confectionery Union and Industry International Pension Fund (the “Fund”). Our obligation to contribute to the Fund arose with respect to 8 collective bargaining agreements covering most of our employees represented by the Bakery, Confectionery, Tobacco and Grain Millers Union (“BCTGM”). All of those collective bargaining agreements expired in 2016. We remain committed to negotiating all of the collective bargaining agreements that expired in 2016.

During the second quarter of 2018, we implemented two aspects of our second revised last, best and final offer made to the BCTGM with respect to 7 of the 8 expired collective bargaining agreements. Implementation resulted in our withdrawing from the Fund with respect to those employees covered by the 7 collective bargaining agreements. In connection with that action, we estimated a partial withdrawal liability of $567 million and within our North America segment, we recorded a discounted liability and charge of $408 million, $305 million net of tax, which represents our best estimate of the partial withdrawal liability absent an assessment from the Fund. We may receive an assessment in 2018 or later, and the ultimate withdrawal liability may change from the currently estimated amount. We will record any future adjustments in the period during which the liability is confirmed or as new information becomes available. We expect to pay the liability in installments over a period of 20 years from the date of the assessment. We determined the net present value of the liability using a risk-free interest rate. We recorded the pre-tax non-cash charge in selling, general and administrative expense (and in other non-cash items, net in the condensed consolidated statement of cash flows) and the liability in long-term other liabilities. We record an immaterial amount of accreted interest each quarter on the long-term liability within interest and other expense, net.

Postretirement Benefit Plans

Net periodic postretirement health care benefit consisted of the following:



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(in millions)
Service cost	$	1		$	1		$	4		$	5
Interest cost	4			4			11			11
Amortization:
Net loss from experience differences	4			4			11			11
Prior service credit ⁽¹⁾	(10		)	(10		)	(29		)	(30		)
Net periodic postretirement health care benefit	$	(1	)	$	(1	)	$	(3	)	$	(3	)


(1)	Amortization of prior service credit included gains of $8 million for the three months ended September 30, 2018 and September 30, 2017 and $24 million for the nine months ended September 30, 2018 and September 30, 2017 related to a change in the eligibility requirement and a change in benefits to Medicare-eligible participants.

Postemployment Benefit Plans

Net periodic postemployment cost consisted of the following:



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2018			2017			2018			2017
	(in millions)
Service cost	$	1		$	1		$	4		$	4
Interest cost	2			1			4			3
Amortization of net gains	(1		)	(1		)	(2		)	(3		)
Net periodic postemployment cost	$	2		$	1		$	6		$	4