v3.26.3
Benefit Plans:
 9 Months Ended
Sep. 30, 2026
Retirement Benefits [Abstract]  
Benefit Plans: Benefit Plans:
Pension coverage for employees of PMI’s subsidiaries is provided, to the extent deemed appropriate, through separate plans, many of which are governed by local statutory requirements. In addition, PMI provides health care and other benefits to certain U.S. retired employees and certain non-U.S. retired employees. In general, health care benefits for non-U.S. retired employees are covered through local government plans.
Pension and other employee benefit costs per the condensed consolidated statements of earnings consisted of the following:
For the Nine Months Ended September 30,For the Three Months Ended September 30,
(in millions)2026202520262025
Net pension costs (income)$(44)$(62)$37 $(20)
Net postemployment costs95 88 32 30 
Net postretirement costs12 11 4 4 
Total pension and other employee benefit costs$63 $37 $73 $14 

Pension Plans

Components of Net Periodic Benefit Cost

Net periodic pension cost consisted of the following:
Pension (1)
For the Nine Months Ended September 30,For the Three Months Ended September 30,
(in millions)2026202520262025
Service cost$165 $178 $54 $62 
Interest cost169 155 51 53 
Expected return on plan assets(354)(322)(110)(112)
Amortization:
Net loss69 107 23 40 
Prior service cost (credit)(2)(2)(1)(1)
Settlements74 — 74 — 
Net periodic pension cost$121 $116 $91 $42 
(1) Primarily non-U.S. based defined benefit retirement plans.

All of the amounts in the table above, other than service cost, are recognized in pension and other employee benefit costs in the condensed consolidated statement of earnings.

The Dutch Future Pensions Act (Wet toekomst pensioenen), enacted in 2023, requires Dutch pension plans to transition from defined benefit plans to defined contribution plans by January 1, 2028 in order to comply with the new legal and tax framework. In connection with this regulatory change, during the third quarter of 2026, PMI's Dutch affiliate substantially completed the buy-out of its defined benefit pension plan through the transfer of the plan's pension obligations to a third-party insurer.

As a result of the transaction, PMI recognized a pre-tax settlement loss of $74 million ($65 million net of tax), primarily attributable to the partial utilization of surplus plan assets in connection with the settlement. The settlement loss was recorded within Pension and other employee benefit costs in the condensed consolidated statements of earnings for the three months and nine months ended September 30, 2026. At the settlement date, the benefit obligation transferred to the insurer was approximately $1.0 billion.

Employer Contributions

PMI makes, and plans to make, contributions, to the extent that they are tax deductible and meet specific funding requirements of its funded pension plans. Employer contributions of $100 million, excluding refunds, were made to the pension plans during the nine months ended September 30, 2026. Currently, PMI anticipates making additional contributions during the remainder of 2026 of approximately $44 million to its pension plans, based on current tax and benefit laws. However, this estimate is subject to change as a result of changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets, or changes in interest and currency rates.
In the third quarter of 2026, PMI received cash refunds of surplus assets of $682 million primarily from its German defined benefit pension plans following the simplification of the German legal entity structure.
Pension plan contributions and refunds of surplus assets are included in pension plan contributions, net of refunds in cash provided by operating activities in the condensed consolidated statements of cash flows.