RETIREMENT PLANS

Defined Benefit Pension Plans and Other Postretirement Benefit Plans

Eastman maintains defined benefit pension plans that provide eligible employees with retirement benefits. In addition, Eastman provides life insurance for eligible retirees hired prior to January 1, 2007. Eastman provides a subsidy for pre-Medicare health care and dental benefits to eligible retirees hired prior to January 1, 2007 that will end on December 31, 2021. Company funding is also provided for eligible Medicare retirees hired prior to January 1, 2007 with a health reimbursement arrangement. Costs recognized for these benefits are estimated amounts, which may change as actual costs derived for the year are determined.

For additional information regarding retirement plans, see Note 11, "Retirement Plans", to the consolidated financial statements in Part II, Item 8 of the Company's 2016 Annual Report on Form 10-K.

Components of net periodic benefit (credit) cost were as follows:



	Third Quarter
	Pension Plans												Other Postretirement Benefit Plans
	2017						2016						2017			2016
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Service cost	$	10		$	3		$	9		$	3		$	—		$	2
Interest cost	16			5			18			5			6			7
Expected return on assets	(35		)	(8		)	(34		)	(7		)	(1		)	(1		)
Amortization of:
Prior service credit, net	(1		)	—			(1		)	—			(10		)	(11		)
Mark-to-market pension and other postretirement benefits loss	—			—			—			30			—			—
Net periodic benefit (credit) cost	$	(10	)	$	—		$	(8	)	$	31		$	(5	)	$	(3	)

	First Nine Months
	Pension Plans												Other Postretirement Benefit Plans
	2017						2016						2017			2016
(Dollars in millions)	U.S.			Non-U.S.			U.S.			Non-U.S.
Service cost	$	28		$	10		$	29		$	9		$	2		$	5
Interest cost	49			14			55			17			18			21
Expected return on assets	(105		)	(25		)	(102		)	(23		)	(4		)	(4		)
Amortization of:
Prior service credit, net	(3		)	—			(3		)	—			(30		)	(31		)
Mark-to-market pension and other postretirement benefits loss	—			—			—			30			—			—
Net periodic benefit (credit) cost	$	(31	)	$	(1	)	$	(21	)	$	33		$	(14	)	$	(9	)

The Company contributed $50 million to its U.S. defined benefit pension plans in first nine months 2016.

In third quarter 2016, the Company announced a change to a UK defined benefit pension plan, which triggered an interim remeasurement of the plan obligation resulting in a mark-to-market ("MTM") loss of $30 million. The MTM loss was primarily due to a lower discount rate at the third quarter 2016 remeasurement date compared to December 31, 2015. The lower discount rate was reflective of changes in global market conditions and interest rates on high-grade corporate bonds.