Pension Plans – We provide defined benefit retirement income to eligible non-union employees through qualified and non-qualified (supplemental) pension plans. Qualified and non-qualified pension benefits are based on years of service and the highest compensation during the latest years of employment, with specific reductions made for early retirements.

Other Postretirement Benefits (OPEB) – We provide medical and life insurance benefits for eligible retirees. These benefits are funded as medical claims and life insurance premiums are paid.

Both pension and OPEB expense are determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to a calculated value of plan assets that recognizes changes in fair value over a five-year period. This practice is intended to reduce year-to-year volatility in pension expense, but it can have the effect of delaying the recognition of differences between actual returns on assets and expected returns based on long-term rate of return assumptions. Differences in actual experience in relation to assumptions are not recognized in net income immediately, but are deferred in accumulated other comprehensive income and, if necessary, amortized as pension or OPEB expense.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Millions	2014		2013		2014		2013
Service cost	$	17	$	18	$	35	$	37
Interest cost		38		33		77		66
Expected return on plan assets		(57)		(50)		(115)		(101)
Amortization of:
Actuarial loss		18		27		35		53
Net periodic pension cost	$	16	$	28	$	32	$	55

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Millions	2014		2013		2014		2013
Service cost	$	1	$	1	$	2	$	2
Interest cost		3		3		7		6
Amortization of:
Prior service credit		(3)		(4)		(6)		(8)
Actuarial loss		3		3		5		7
Net periodic OPEB cost	$	4	$	3	$	8	$	7

For the six months ended June 30, 2014, we have not made any cash contributions to the qualified pension plan. Any contributions made during 2014 will be based on cash generated from operations and financial market considerations. Our policy with respect to funding the qualified plans is to fund at least the minimum required by law and not more than the maximum amount deductible for tax purposes. At June 30, 2014, we do not have minimum cash funding requirements for 2014.