Employee Benefit Plans:
Post-Retirement Medical Plan
We sponsor a post-retirement medical plan that covers all retired employees until they reach age 65. At December 31, 2013, both our accumulated benefit obligation and our accrued benefit costs were $10 million. Our net periodic benefit cost was approximately $2 million for each of the years ended December 31, 2013, 2012 and 2011.
The expected future benefit payments under our post-retirement medical plan for the next ten years include $3 million for the five-year period 2014 through 2018 and $5 million for the five-year period 2019 through 2023.
Annual Cash Incentive Compensation Plan
During 2010, our Board of Directors, with the recommendation of the Compensation & Management Development Committee, approved a new annual cash incentive compensation plan for all employees (the 2011 Annual Incentive Plan). Under the 2011 Annual Incentive Plan, the Compensation & Management Development Committee determines the annual award pool for all employees based upon a number of factors including the Company’s performance against stated performance goals and in comparison with peer companies in our industry. All employees are eligible if employed on October 1 and December 31 of the performance period. Beginning with the year ended December 31, 2010, our annual cash incentive compensation is paid in a single payment to employees during the first quarter after the end of the performance period.
Total incentive compensation expense for the years ended December 31, 2013, 2012 and 2011 was $40 million, $41 million and $39 million, respectively.
401(k) and Deferred Compensation Plans
We sponsor a 401(k) profit sharing plan under Section 401(k) of the Internal Revenue Code. This plan covers all of our employees, excluding those of our foreign subsidiaries. We match $1.00 for each $1.00 of employee deferral, with our contribution not to exceed 8% of an employee’s salary, subject to limitations imposed by the IRS. We also sponsor a highly compensated employee deferred compensation plan. This non-qualified plan allows an eligible employee to defer a portion of his or her salary or bonus on an annual basis. We match $1.00 for each $1.00 of employee deferral, with our contribution not to exceed 8% of an employee’s salary, subject to limitations imposed by the plan. Our contribution with respect to each participant in the deferred compensation plan is reduced by the amount of contribution made by us to our 401(k) plan for that participant. Our combined contributions to these two plans was $10 million for each of the years ended December 31, 2013 and 2012 and $8 million for the year ended December 31, 2011.
