Pension Benefits

6 Months Ended

Jun. 30, 2016

Compensation and Retirement Disclosure [Abstract]

PENSION BENEFITS

Certain of Delphi’s non-U.S. subsidiaries sponsor defined benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. Delphi’s primary non-U.S. plans are located in France, Germany, Mexico, Portugal and the United Kingdom (“U.K.”). The U.K. and certain Mexican plans are funded. In addition, Delphi has defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon separation. The obligations for these plans are recorded over the requisite service period.

Delphi sponsors a Supplemental Executive Retirement Program (“SERP”) for those employees who were U.S. executives of the former Delphi Corporation (now known as DPH Holdings Corp. (“DPHH”)) prior to September 30, 2008 and were still U.S. executives of Delphi on October 7, 2009, the effective date of the program. This program is unfunded. Executives receive benefits over 5 years after an involuntary or voluntary separation from Delphi. The SERP is closed to new members.

The amounts shown below reflect the defined benefit pension expense for the three and six months ended June 30, 2016 and 2015, including amounts attributable to discontinued operations in the prior period:



	Non-U.S. Plans						U.S. Plans

	Three Months Ended June 30,
	2016			2015			2016		2015

	(in millions)
Service cost	$	13		$	14		$	—	$	—
Interest cost	17			18			1		1
Expected return on plan assets	(18		)	(18		)	—		—
Settlement loss	—			3			—		—
Amortization of actuarial losses	3			5			—		—
Net periodic benefit cost	$	15		$	22		$	1	$	1



	Non-U.S. Plans						U.S. Plans

	Six Months Ended June 30,
	2016			2015			2016		2015

	(in millions)
Service cost	$	25		$	29		$	—	$	—
Interest cost	34			39			1		1
Expected return on plan assets	(36		)	(38		)	—		—
Settlement loss	—			3			—		—
Amortization of actuarial losses	7			9			—		—
Net periodic benefit cost	$	30		$	42		$	1	$	1

Other postretirement benefit obligations were approximately $3 million and $3 million at June 30, 2016 and December 31, 2015, respectively.

Effective January 1, 2016, the Company changed the method used to estimate the service and interest cost components of net periodic benefit cost for pension and other postretirement benefit plans that utilize a yield curve approach. Historically, the Company estimated these service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the projected benefit obligation at the beginning of the period. The Company elected to utilize a full yield curve approach in the estimation of these components by applying the specific spot rates along the yield curve used in the determination of the projected benefit obligation to the relevant projected cash flows. The Company made this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change does not affect the measurement of the total benefit obligations. The Company has accounted for this change as a change in accounting estimate and accordingly accounted for it on a prospective basis. The expected reduction in annual service and interest costs associated with this change in estimate is less than $10 million.