Citibank 2015 Annual Report Download - page 177

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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 U.S.
The U.S. qualified defined benefit plan was frozen effective January 1,
2008 for most employees. Accordingly, no additional compensation-based
contributions have been 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 U.S.
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.
The plan obligations, plan assets and periodic plan expense for the
Company’s most significant pension and postretirement benefit plans
(Significant Plans) are measured and disclosed quarterly, instead of
annually. The Significant Plans captured approximately 90% of the
Company’s global pension and postretirement plan obligations as of
December 31, 2015. All other plans (All Other Plans) are measured 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
pension and postretirement plans, for Significant Plans and All Other Plans,
for the periods indicated.
Pension plans Postretirement benefit plans
U.S. plans Non-U.S. plans U.S. plans Non-U.S. plans
In millions of dollars 2015 2014 2013 2015 2014 2013 2015 2014 2013 2015 2014 2013
Qualified plans
Benefits earned during the year $ 4 $ 6 $ 8 $ 168 $ 178 $ 210 $— $— $— $ 12 $ 15 $ 43
Interest cost on benefit obligation 553 541 538 317 376 384 33 33 33 108 120 146
Expected return on plan assets (893) (878) (863) (323) (384) (396) (3) (1) (2) (105) (121) (133)
Amortization of unrecognized
Prior service (benefit) cost (3) (3) (4) 21 4 —— (1) (11) (12) —
Net actuarial loss 139 105 104 73 77 95 —— — 43 39 45
Curtailment loss (gain) (1) 14 — 21 —14 4 —— — (1) — —
Settlement loss (gain) (1) —— — 44 53 13 —— — —— (1)
Special termination benefits (1) —— — —9 8 —— — —— —
Net qualified plans (benefit) expense $(186) $(229) $(196) $ 281 $ 324 $ 322 $30 $32 $30 $ 46 $ 41 $ 100
Nonqualified plans expense $ 43 $ 45 $ 46 $ — $ — $ — $— $— $— $ — $ — $ —
Cumulative effect of change in
accounting policy (2) $ — $ — $ (23) $ — $ — $ — $— $— $— $ — $ — $ 3
Total net (benefit) expense $(143) $(184) $(173) $ 281 $ 324 $ 322 $30 $32 $30 $ 46 $ 41 $ 103
(1) Losses (gains) due to curtailment, settlement and special termination benefits relate to repositioning and divestiture actions.
(2) Cumulative effect of adopting quarterly measurement for Significant Plans.
The estimated net actuarial loss and prior service cost that will be amortized
from Accumulated other comprehensive income (loss) into net expense
in 2016 are approximately $226 million and $1 million, respectively, for
defined benefit pension plans. For postretirement plans, the estimated
2016 net actuarial loss and prior service cost (benefit) amortizations are
approximately $35 million and $(11) million, respectively.