10. Retirement-Related Benefits: The company offers defined benefit pension plans, defined contribution pension plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. The following table provides the pre-tax cost for all retirement-related plans.

					Yr. to Yr.
(Dollars in millions)					Percent
For the three months ended March 31:	2019		2018		Change
Retirement-related plans — cost
Defined benefit and contribution pension plans — cost	$	437	$	738	(40.8	)%
Nonpension postretirement plans — cost	54		51		6.4

Total	$	491	$	788	(37.7	)%

The following table provides the components of the cost/(income) for the company’s pension plans.

Cost/(Income) of Pension Plans

(Dollars in millions)	U.S. Plans						Non-U.S. Plans
For the three months ended March 31:	2019			2018			2019			2018
Service cost	$	—		$	—		$	93		$	104
Interest cost (1)	472			430			208			215
Expected return on plan assets (1)	(650		)	(676		)	(399		)	(348		)
Amortization of prior service costs/(credits) (1)	4			4			(6		)	(21		)
Recognized actuarial losses (1)	140			384			314			359
Curtailments and settlements (1)	—			—			1			0
Multi-employer plans	—			—			9			10
Other costs/(credits) (1)	—			—			5			7

Total net periodic pension (income)/cost of defined benefit plans	$	(34	)	$	143		$	223		$	327
Cost of defined contribution plans	149			160			98			108

Total defined benefit and contribution pension plans cost recognized in the Consolidated Statement of Earnings	$	115		$	303		$	322		$	434

(1)These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

As of 2019, substantially all the plan participants in the U.S. Qualified IBM Personal Pension Plan (PPP) are considered inactive. As required by U.S. GAAP, this resulted in a change in the amortization period of unrecognized actuarial losses to the average remaining life expectancy of inactive plan participants, which was 18 years as of December 31, 2018. Recognized actuarial losses decreased by approximately $240 million for the three months ended March 31, 2019, compared to the corresponding period in the prior year, primarily driven by the change in amortization period. There was no impact to funded status, retiree benefit payments or funding requirements of the U.S. Qualified PPP as a result of this change.

In 2019, the company expects to contribute approximately $400 million to its non-U.S. defined benefit and multi-employer plans, the largest of which will be contributed to the defined benefit pension plans in Japan, Spain and Belgium. This amount generally represents the legally mandated minimum contribution. Total net contributions to the non-U.S. plans in the first three months of 2019 were $94 million, of which $33 million was in cash and $61 million in U.S. Treasury securities. Total contributions to the non-U.S. plans in the first three months of 2018 were $191 million, of which $44 million was in cash and $147 million in U.S. Treasury securities. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.

The following table provides the components of the cost for the company’s nonpension postretirement plans.

Cost of Nonpension Postretirement Plans

(Dollars in millions)	U.S. Plan						Non-U.S. Plans
For the three months ended March 31:	2019			2018			2019			2018
Service cost	$	3		$	3		$	1		$	1
Interest cost (1)	36			33			12			13
Expected return on plan assets (1)	—			—			(1		)	(1		)
Amortization of prior service costs/(credits) (1)	(1		)	(2		)	0			0
Recognized actuarial losses (1)	1			2			3			1
Curtailments and settlements (1)	—			—			0			0

Total nonpension postretirement plans cost recognized in Consolidated Statement of Earnings	$	39		$	37		$	15		$	14

(1)

These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

The company contributed $194 million in U.S. Treasury securities to the U.S. nonpension postretirement benefit plan during the three months ended March 31, 2019, and $120 million in U.S. Treasury securities during the three months ended March 31, 2018. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.