Investor Presentaiton
Both defined contribution plans offer an employer-matching savings option that allows employees to make pre-tax contributions to
various investment choices. Employees who elected to continue accruing a benefit in the qualified defined benefit pension plans
may also participate in the defined contribution plan, where employer-matching contributions are provided for up to 2 percent of
the employee's annual eligible earnings. Employees who elected not to continue accruing a benefit in the defined benefit pension
plans, and employees hired after November 1997 and through December 31, 2003, may participate in the enhanced defined
contribution plan. This plan provides for a fixed employer contribution of 2 percent of the employee's annual eligible earnings,
plus an employer-matching contribution of up to 4 percent of the employee's annual eligible earnings. Employees hired after
December 31, 2003, do not receive the fixed employer contribution of 2 percent of the employee's annual eligible earnings.
As of December 31, 2016 and 2015, as a result of employees' elections, TI's U.S. defined contribution plans held shares of TI
common stock totaling 11 million shares and 13 million shares valued at $796 million and $704 million, respectively. Dividends
paid on these shares in 2016 and 2015 were $20 million and $19 million, respectively. Effective April 1, 2016, the TI common
stock fund was frozen to new contributions or transfers into the fund.
Our aggregate expense for the U.S. defined contribution plans was $60 million in 2016, 2015 and 2014.
The defined benefit pension plans include employees still accruing benefits, as well as employees and participants who no longer
accrue service-related benefits, but instead, may participate in the enhanced defined contribution plan. Benefits under the qualified
defined benefit pension plan are determined using a formula based upon years of service and the highest five consecutive years of
compensation. We intend to contribute amounts to this plan to meet the minimum funding requirements of applicable local laws
and regulations, plus such additional amounts as we deem appropriate. The non-qualified defined benefit plans are unfunded and
closed to new participants.
U.S. retiree health care benefit plan
U.S. employees who meet eligibility requirements are offered medical coverage during retirement. We make a contribution toward
the cost of those retiree medical benefits for certain retirees and their dependents. The contribution rates are based upon various
factors, the most important of which are an employee's date of hire, date of retirement, years of service and eligibility for Medicare
benefits. The balance of the cost is borne by the plan's participants. Employees hired after January 1, 2001, are responsible for the
full cost of their medical benefits during retirement.
Non-U.S. retirement plans
We provide retirement coverage for non-U.S. employees, as required by local laws or to the extent we deem appropriate, through
a number of defined benefit and defined contribution plans. Retirement benefits are generally based on an employee's years of
service and compensation. Funding requirements are determined on an individual country and plan basis and are subject to local
country practices and market circumstances.
As of December 31, 2016 and 2015, as a result of employees' elections, TI's non-U.S. defined contribution plans held TI common
stock valued at $20 million and $17 million, respectively. Dividends paid on these shares of TI common stock in 2016 and 2015
were not material.
Effects on our Consolidated Statements of Income and Balance Sheets
Expense related to defined benefit and retiree health care benefit plans is as follows:
U.S. Defined Benefit
U.S. Retiree Health Care
2016
2015
2014
2016
2015
2014
Non-U.S. Defined Benefit
2016 2015
2014
Service cost
$ 22
$ 22
$ 21
$ 5
$ 5
$ 4
$ 34
$ 35
$ 39
Interest cost.
42
43
45
20
20
22
52
53
68
Expected return on plan assets
Amortization of prior service cost (credit)
(41)
(48)
(42)
(20)
(22)
(20)
(68)
(76)
(80)
(3)
2
4
(2)
(2)
(2)
Recognized net actuarial loss
21
19
26
7
8
7
25
24
24
Net periodic benefit costs
44
36
50
9
13
17
41
34
49
Settlement losses
21
25
5
2
2
1
Curtailment gain
Total, including other postretirement losses
(gains) .
65
55
$ 61
$ 55
$ 9
$ 13 $ 17 $ 43
$ 36
$ 48
TEXAS INSTRUMENTS
. 2016 FORM 10-K
49
FORM 10-KView entire presentation