Northrop Grumman 2012 Annual Report Download - page 76

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NORTHROP GRUMMAN CORPORATION
-66-
Non-U.S. Benefit Plans – The company sponsors several benefit plans for non-U.S. employees. These plans are
designed to provide benefits appropriate to local practice and in accordance with local regulations. Some of these
plans are funded using benefit trusts that are separate from the company.
Medical and Life Benefits – The company provides a portion of the costs for certain health care and life insurance
benefits for a substantial number of its active and retired employees. Certain covered employees achieve eligibility
to participate in these contributory plans upon retirement from active service if they meet specified age and years of
service requirements. Qualifying dependents are also eligible for medical coverage. Approximately 55 percent of the
company’s current retirees participate in the medical plans. The company reserves the right to amend or terminate
the plans at any time. In November 2006, the company adopted plan amendments and communicated to plan
participants that it would cap the amount of its contributions to substantially all of its remaining post retirement
medical and life benefit plans that were previously not subject to limits on the company’s contributions.
In addition to a company and employee cost-sharing feature, the plans also have provisions for deductibles, co-
payments, coinsurance percentages, out-of-pocket limits, conformance to a schedule of reasonable fees, the use of
managed care providers, and coordination of benefits with other plans. The plans also provide for a Medicare carve-
out. Subsequent to January 1, 2005 (or earlier at some segments), newly hired employees are not eligible for post
retirement medical and life benefits.
Summary Plan Results
The cost to the company of its retirement benefit plans in each of the three years ended December 31 is shown in the
following table:
Year Ended December 31
Pension Benefits Medical and
Life Benefits
$ in millions 2012 2011 2010 2012 2011 2010
Components of net periodic benefit cost
Service cost $ 522 $ 520 $ 531 $ 34 $ 32 $ 34
Interest cost 1,184 1,223 1,212 109 114 117
Expected return on plan assets (1,708) (1,690)(1,517)(68)(62)(56)
Amortization of:
Prior service cost (credit) (58) 23 35 (51)(51)(51)
Net loss from previous years 427 162 206 21 17 18
Other 7———(6) —
Net periodic benefit cost $ 374 $ 238 $ 467 $ 45 $ 44 $ 62