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77
Substantially all U.S. salaried and certain hourly
employees are eligible to participate and may make
elective deferrals to such plans to save for retirement.
International Paper makes matching contributions to
participant accounts on a specified percentage of
employee deferrals as determined by the provisions of
each plan. For eligible employees hired after June 30,
2004, the Company makes Retirement Savings
Account contributions equal to a percentage of an
eligible employee’s pay.
The Company also sponsors the International Paper
Company Deferred Compensation Savings Plan, which
is an unfunded nonqualified defined contribution plan.
This plan permits eligible employees to continue to
make deferrals and receive company matching
contributions when their contributions to the
International Paper Salaried Savings Plan are stopped
due to limitations under U.S. tax law. Participant
deferrals and company matching contributions are not
invested in a separate trust, but are paid directly from
International Paper’s general assets at the time benefits
become due and payable.
Company matching contributions to the plans totaled
approximately $100 million, $112 million and $120
million for the plan years ending in 2015, 2014 and 2013,
respectively.
NOTE 17 POSTRETIREMENT BENEFITS
U.S. POSTRETIREMENT BENEFITS
International Paper provides certain retiree health care
and life insurance benefits covering certain U.S.
salaried and hourly employees. These employees are
generally eligible for benefits upon retirement and
completion of a specified number of years of creditable
service. Excluded from company-provided medical
benefits are salaried employees whose age plus years
of employment with the Company totaled less than 60
as of January 1, 2004. International Paper does not
fund these benefits prior to payment and has the right
to modify or terminate certain of these plans in the
future.
In addition to the U.S. plan, certain Brazilian and
Moroccan employees are eligible for retiree health care
and life insurance benefits.
The components of postretirement benefit expense in
2015, 2014 and 2013 were as follows:
In millions 2015 2014 2013
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
Service cost $1$1$1$1$2$2
Interest cost 11 5 14 6 14 5
Actuarial loss 61 51 7
—
Amortization of
prior service
credits (10) (2) (13) (1) (24) —
Net
postretirement
(benefit)
expense (a) $8$5$7$7$(1)$7
(a) Excludes $7 million of curtailment gains in 2013 related to the
sale of Building Products that were recorded in Net (gains)
losses on sales and impairments of businesses in the
consolidated statement of operations.
International Paper evaluates its actuarial assumptions
annually as of December 31 (the measurement date)
and considers changes in these long-term factors
based upon market conditions and the requirements of
employers’ accounting for postretirement benefits other
than pensions.
The discount rates used to determine net U.S. and non-
U.S. postretirement benefit cost for the years ended
December 31, 2015, 2014 and 2013 were as follows:
2015 2014 2013
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
Discount rate 3.90% 11.52% 4.50% 11.94% 3.70% 8.43%
The weighted average assumptions used to determine
the benefit obligation at December 31, 2015 and 2014
were as follows:
2015 2014
U.S.
Plans
Non-
U.S.
Plans
U.S.
Plans
Non-
U.S.
Plans
Discount rate 4.20% 12.23% 3.90% 11.52%
Health care cost trend rate
assumed for next year 7.00% 11.41% 7.00% 11.38%
Rate that the cost trend rate
gradually declines to 5.00% 5.94% 5.00% 6.11%
Year that the rate reaches the
rate it is assumed to remain 2022 2026 2022 2025
A 1% increase in the assumed annual health care cost
trend rate would have increased the U.S. and non-U.S.
accumulated postretirement benefit obligations at
December 31, 2015 by approximately $11 million and
$7 million, respectively. A 1% decrease in the annual
trend rate would have decreased the U.S. and non-U.S.
accumulated postretirement benefit obligation at
December 31, 2015 by approximately $10 million and
$6 million, respectively. The effect on net postretirement