Note H — Employee and Retiree Benefit Plans

PENSION AND POSTRETIREMENT PLANS — Murphy Oil has defined benefit pension plans that are principally noncontributory and cover most full-time employees. Upon separation from Murphy Oil, all amounts for these plans related to Murphy USA were frozen and retained by Murphy Oil. Therefore, the assets and liabilities related to Murphy USA employees in these plans are not included in these financial statements as Murphy USA is considered to be participating in multiple employer benefit plans due to co-mingling of various plan assets. However, the periodic benefit expense for each period includes the expense of the U.S. benefit plans. All U.S. tax qualified plans meet the funding requirements of federal laws and regulations. Murphy Oil also sponsors health care and life insurance benefit plans, which are not funded, that cover most retired U.S. employees. The health care benefits are contributory; the life insurance benefits are noncontributory. Murphy USA does not expect to have similar pension or post-retirement plans for its employees.

The table that follows provides the components of net periodic benefit expense associated with Company employees for the three and nine months ended September 30, 2013 and 2012. For the periods in 2013, only dates prior to August 30, 2013 contain any net periodic benefit expense.



	Three Months Ended September 30,
					Other Postretirement
	Pension Benefits				Benefits
(Thousands of dollars)	2013		2012		2013		2012
Service cost	$	801	$	1,092	$	369	$	497
Interest cost		762		1,083		249		356
Expected return on plan assets		(805)		(981)		-		-
Amortization of prior service cost (benefits)		14		23		(2)		(2)
Recognized actuarial loss		592		765		92		122
Net periodic benefit expense	$	1,364	$	1,982	$	708	$	973

	Nine Months Ended September 30,
					Other Postretirement
	Pension Benefits				Benefits
(Thousands of dollars)	2013		2012		2013		2012
Service cost	$	3,401	$	3,231	$	1,447	$	1,486
Interest cost		2,717		3,237		983		1,097
Expected return on plan assets		(2,794)		(2,936)		-		-
Amortization of prior service cost (benefits)		53		67		(7)		(8)
Recognized actuarial loss		2,108		2,286		363		376
Net periodic benefit expense	$	5,485	$	5,885	$	2,786	$	2,951

U.S. Health Care Reform — In March 2010, the United States Congress enacted a health care reform law. Along with other provisions, the law (a) eliminated the tax free status of federal subsidies to companies with qualified retiree prescription drug plans that are actuarially equivalent to Medicare Part D plans beginning in 2013; (b) imposes a 40% excise tax on high-cost health plans as defined in the law beginning in 2018; (c) eliminated lifetime or annual coverage limits and required coverage for preventative health services beginning in September 2010; and (d) imposed a fee of $2 (subsequently adjusted for inflation) for each person covered by a health insurance policy beginning in September 2010. The new law did not significantly affect the Company’s consolidated and combined financial statements as of September 30, 2013 and December 31, 2012 and for the three-month and nine-month periods ended September 30, 2013 and 2012.