The Company’s employee benefit plans are described in Note 18 - Employee Benefit Plans of Notes to Consolidated Financial Statements included in The Hartford’s 2016 Annual Report on Form 10-K.

On June 30, 2017, the Company transferred invested assets and cash from pension plan assets to purchase a group annuity contract that transferred approximately $1.6 billion of the Company’s outstanding pension benefit obligations related to certain U.S. retirees, terminated vested participants, and beneficiaries. As a result of this transaction, in the second quarter of 2017, the Company recognized a pre-tax settlement charge of $750 ($488 after-tax) and a reduction to shareholders' equity of $144.

In connection with this transaction, the Company made a contribution of $280 in September 2017 to the U.S. qualified pension plan in order to maintain the plan's pre-transaction funded status.

Beginning with the first quarter of 2017, the Company adopted the full yield curve approach in the estimation of the interest cost component of net periodic benefit costs for its qualified and non-qualified pension plans and the postretirement benefit plan. The full yield curve approach applies the specific spot rates along the yield curve that are used in its determination of the projected benefit obligation at the beginning of the year. The change has been made to provide a better estimate of the interest cost component of net periodic benefit cost by better aligning projected benefit cash flows with corresponding spot rates on the yield curve rather than using a single weighted average discount rate derived from the yield curve as had been done historically.

This change does not affect the measurement of the Company's total benefit obligations as the change in the interest cost in net income is completely offset in the actuarial (gain) loss reported for the period in other comprehensive income. The change reduced the before tax interest cost component of net periodic benefit cost by $9 and $28 for the three and nine months ended September 30, 2017, respectively. The discount rate being used to measure interest cost during 2017 is 3.58%, 3.55% and 3.13% for the qualified pension plan, non-qualified pension plan and postretirement benefit plan, respectively. Under the Company's historical estimation approach, the weighted average discount rate for the interest cost component would have been 4.22%, 4.19% and 3.97% for the qualified pension plan, non-qualified pension plan and postretirement benefit plan, respectively. The Company accounted for the change in estimation approach as a change in estimate, and accordingly, is recognizing the effect prospectively beginning in 2017.



Components of Net Periodic Cost (Benefit)
	Pension Benefits						Other Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	1		$	1		$	—		$	—
Interest cost	36			60			2			2
Expected return on plan assets	(55		)	(78		)	(2		)	(2		)
Amortization of prior service credit	—			—			(2		)	(2		)
Amortization of actuarial loss	11			15			1			2
Settlements	—			—			—			—
Net periodic cost (benefit)	$	(7	)	$	(2	)	$	(1	)	$	—



Components of Net Periodic Cost (Benefit)
	Pension Benefits						Other Postretirement Benefits
	Nine months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Service cost	$	3		$	2		$	6		$	—
Interest cost	134			178			(6		)	8
Expected return on plan assets	(214		)	(231		)	(5		)	(7		)
Amortization of prior service credit	—			—			—			(5		)
Amortization of actuarial loss	41			42			4			4
Settlements	750			—			—			—
Net periodic cost (benefit)	$	714		$	(9	)	$	(1	)	$	—