TEXAS INSTRUMENTS INC | 2013 | FY | 3


Expense related to defined benefit and retiree health care benefit plans was as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree Health Care
 
Non-U.S. Defined Benefit
 
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Service cost
 
$
26

 
$
24

 
$
22

 
$
5

 
$
5

 
$
4

 
$
41

 
$
45

 
$
41

Interest cost
 
45

 
44

 
46

 
20

 
25

 
25

 
61

 
75

 
69

Expected return on plan assets
 
(48
)
 
(50
)
 
(45
)
 
(24
)
 
(23
)
 
(21
)
 
(67
)
 
(78
)
 
(83
)
Amortization of prior service cost (credit)
 
1

 
1

 
1

 
4

 
3

 
2

 
(3
)
 
(4
)
 
(4
)
Recognized net actuarial loss
 
21

 
16

 
23

 
11

 
13

 
13

 
31

 
41

 
40

Net periodic benefit costs
 
45

 
35

 
47

 
16

 
23

 
23

 
63

 
79

 
63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement losses (a) (b)
 
41

 

 

 

 

 

 
4

 
193

 

Curtailment losses (gains)
 

 

 

 

 
(1
)
 
5

 
(7
)
 

 
2

Special termination benefit losses (gains) (b)
 

 
(1
)
 
4

 

 

 

 

 
(337
)
 

Total, including other postretirement losses (gains)
 
$
86

 
$
34

 
$
51

 
$
16

 
$
22

 
$
28

 
$
60

 
$
(65
)
 
$
65

(a) Includes non-restructuring- and restructuring-related settlement losses.
(b) Transfer of Japan substitutional pension in 2012: In Japan, we maintain employee pension fund plans (EPFs) pursuant to the Japanese Welfare Pension Insurance Law (JWPIL). An EPF consists of two portions: a substitutional portion based on JWPIL-determined minimum old-age pension benefits similar to Social Security benefits in the United States and a corporate portion established at the discretion of each employer. Employers and employees are exempt from contributing to the Japanese Pension Insurance (JPI) if the substitutional portion is funded by an EPF.
    
The JWPIL was amended to permit each EPF to separate the substitutional portion and transfer those obligations and related assets to the government of Japan. After such a transfer, the employer is required to contribute periodically to JPI, and the government of Japan is responsible for future benefit payments relating to the substitutional portion.

During the third quarter of 2012, our EPF received final approval for such a separation and transferred the obligations and assets of its substitutional portion to the government of Japan. On a pre-tax basis, this resulted in a net gain of $144 million recorded in Restructuring charges/other on our Consolidated statements of income and included in Other, as shown in Note 3. This net gain of $144 million consisted of two parts - a gain of $337 million, representing the difference between the fair values of the obligations settled of $533 million and the assets transferred from the pension trust to the government of Japan of $196 million, offset by a settlement loss of $193 million related to the recognition of previously unrecognized actuarial losses included in AOCI.


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