Citibank 2014 Annual Report Download - page 183

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8. RETIREMENT BENEFITS
Pension and Postretirement Plans
The Company has several non-contributory defined benefit pension plans
covering certain U.S. employees and has various defined benefit pension and
termination indemnity plans covering employees outside the United States.
The U.S. qualified defined benefit plan was frozen effective January 1,
2008 for most employees. Accordingly, no additional compensation-based
contributions were credited to the cash balance portion of the plan for
existing plan participants after 2007. However, certain employees covered
under the prior final pay plan formula continue to accrue benefits. The
Company also offers postretirement health care and life insurance benefits to
certain eligible U.S. retired employees, as well as to certain eligible employees
outside the United States.
The Company also sponsors a number of non-contributory, nonqualified
pension plans. These plans, which are unfunded, provide supplemental
defined pension benefits to certain U.S. employees. With the exception
of certain employees covered under the prior final pay plan formula, the
benefits under these plans were frozen in prior years.
In the second quarter of 2013, the Company changed the method of
accounting for its most significant pension and postretirement benefit plans
(Significant Plans) such that plan obligations, plan assets and periodic
plan expense are remeasured and disclosed quarterly, instead of annually.
The Significant Plans captured approximately 80% of the Company’s global
pension and postretirement plan obligations as of December 31, 2014. All
other plans (All Other Plans) are remeasured annually with a December 31
measurement date.
Net (Benefit) Expense
The following table summarizes the components of net (benefit) expense
recognized in the Consolidated Statement of Income for the Company’s U.S.
qualified and nonqualified pension plans and postretirement plans, and
pension and postretirement plans outside the United States, for Significant
Plans and All Other Plans, for the years indicated.
Pension plans Postretirement benefit plans
U.S. plans Non-U.S. plans U.S. plans Non-U.S. plans
In millions of dollars 2014 2013 2012 2014 2013 2012 2014 2013 2012 2014 2013 2012
Qualified plans
Benefits earned during the year $ 6 $ 8 $ 12 $ 178 $ 210 $ 199 $— $— $— $ 15 $ 43 $ 29
Interest cost on benefit obligation 541 538 565 376 384 367 33 33 44 120 146 116
Expected return on plan assets (878) (863) (897) (384) (396) (399) (1) (2) (4) (121) (133) (108)
Amortization of unrecognized
Prior service (benefit) cost (3) (4) (1) 14 4 —(1) (1) (12) — —
Net actuarial loss 105 104 96 77 95 77 —— 4 39 45 25
Curtailment loss (1) —21 — 14 4 10 —— — —— —
Settlement (gain) loss (1) —— — 53 13 35 —— — —(1) —
Special termination benefits (1) —— — 98 1 —— — —— —
Net qualified plans (benefit) expense $(229) $(196) $(225) $ 324 $ 322 $ 294 $32 $30 $43 $ 41 $ 100 $ 62
Nonqualified plans expense 45 46 42 —— — —— — —— —
Cumulative effect of change in
accounting policy (2) —(23) — —— — —— — —3 —
Total adjusted net (benefit) expense $(184) $(173) $(183) $ 324 $ 322 $ 294 $32 $30 $43 $ 41 $ 103 $ 62
(1) Losses due to curtailment, settlement and special termination benefits relate to repositioning actions.
(2) Cumulative effect of adopting quarterly remeasurement for Significant Plans.