Compensation and Benefit Plans

Pension Plans

Edison International made contributions of $98 million during the nine months ended September 30, 2016, which includes contributions of $81 million by SCE. Edison International expects to make contributions of $22 million during the remainder of 2016, which includes $14 million from SCE. Annual contributions made by SCE to most of SCE's pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense.

Pension expense components for continuing operations are:



	Three months ended September 30,						Nine months ended September 30,
(in millions)	2016			2015			2016			2015
Edison International:
Service cost	$	39		$	35		$	117		$	105
Interest cost	44			41			132			124
Expected return on plan assets	(56		)	(57		)	(168		)	(171		)
Amortization of prior service cost	1			1			3			3
Amortization of net loss¹	9			9			27			27
Expense under accounting standards	$	37		$	29		$	111		$	88
Regulatory adjustment	(9		)	(2		)	(27		)	(4		)
Total expense recognized	$	28		$	27		$	84		$	84
SCE:
Service cost	$	38		$	35		$	114		$	104
Interest cost	41			38			123			113
Expected return on plan assets	(53		)	(53		)	(159		)	(160		)
Amortization of prior service cost	1			1			3			4
Amortization of net loss¹	8			7			24			22
Expense under accounting standards	$	35		$	28		$	105		$	83
Regulatory adjustment	(9		)	(2		)	(27		)	(4		)
Total expense recognized	$	26		$	26		$	78		$	79

Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $3 million and $2 million, respectively, for the three months ended September 30, 2016, and $9 million and $5 million, respectively, for the nine months ended September 30, 2016. The amount reclassified for Edison International and SCE was $4 million and $2 million, respectively, for the three months ended September 30, 2015 and $11 million and $6 million, respectively, for the nine months ended September 30, 2015.

Postretirement Benefits Other Than Pensions

Edison International made contributions of $25 million during the nine months ended September 30, 2016 and expects to make contributions of $8 million during the remainder of 2016, substantially all of which are expected to be made by SCE. Annual contributions made to SCE plans are anticipated to be recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to the total annual expense for these plans. Benefits under these plans, with some exceptions, are generally unvested and subject to change. Under the terms of the Edison International Health and Welfare Plan ("PBOP Plan") each participating employer (Edison International or its participating subsidiaries) is responsible for the costs and expenses of all PBOP benefits with respect to its employees and former employees. A participating employer may terminate the PBOP benefits with respect to its employees and former employees, as may SCE (as Plan sponsor), and, accordingly, the participants' PBOP benefits are not vested benefits.

PBOP expense components for continuing operations are:



	Three months ended September 30,						Nine months ended September 30,
(in millions)	2016			2015			2016			2015
Edison International:
Service cost	$	10		$	12		$	30		$	36
Interest cost	26			29			78			86
Expected return on plan assets	(28		)	(28		)	(84		)	(85		)
Amortization of prior service cost	(1		)	(3		)	(3		)	(9		)
Amortization of net loss	—			5			—			17
Total expense	$	7		$	15		$	21		$	45
SCE:
Service cost	$	10		$	12		$	30		$	36
Interest cost	26			28			78			84
Expected return on plan assets	(28		)	(28		)	(84		)	(84		)
Amortization of prior service cost	(1		)	(3		)	(3		)	(9		)
Amortization of net loss	—			6			—			17
Total expense	$	7		$	15		$	21		$	44

Workforce Reductions

SCE continues to focus on productivity improvements to mitigate rate pressure from its capital program, optimize its cost structure and improve operational efficiency, which is expected to result in further workforce reductions through 2016. During the nine months ended September 30, 2016, SCE increased the estimated impact for approved workforce reductions.

The following table provides a summary of changes in the accrued severance liability associated with these reductions:



(in millions)
Balance at January 1, 2016	$	22
Additions	21
Payments	(34		)
Balance at September 30, 2016	$	9

The liability presented in the table above is reflected in "Other current liabilities" on the consolidated balance sheets. The severance costs are included in "Operation and maintenance" on the consolidated income statements.