Citigroup Inc.

9. RETIREMENT BENEFITSThe Company has several non-contributory defined benefit pension planscovering certain U.S. employees and has various defined benefit pensionand termination indemnity plans covering employees outside the UnitedStates. The U.S. qualified defined benefit plan provides benefits under a cashbalance formula. However, employees satisfying certain age and servicerequirements remain covered by a prior final average pay formula underthat plan. Effective January 1, 2008, the U.S. qualified pension plan wasfrozen for most employees. Accordingly, no additional compensation-basedcontributions were credited to the cash balance portion of the plan forexisting plan participants after 2007. However, certain employees coveredunder the prior final pay plan formula continue to accrue benefits. TheCompany also offers postretirement health care and life insurance benefits tocertain eligible U.S. retired employees, as well as to certain eligible employeesoutside the United States.The following tables summarize the components of net (benefit) expenserecognized in the Consolidated Statement of Income and the fundedstatus and amounts recognized in the Consolidated Balance Sheet for theCompany’s U.S. qualified and nonqualified pension plans, postretirementplans and plans outside the United States. The Company uses a December 31measurement date for the U.S. plans as well as the plans outside theUnited States.Net (Benefit) ExpensePension plansPostretirement benefit plansU.S. plans Non-U.S. plans U.S. plans Non-U.S. plansIn millions of dollars 2010 2009 2008 2010 2009 2008 2010 2009 2008 2010 2009 2008Qualified PlansBenefits earned during the year $ 14 $ 18 $ 23 $ 167 $ 148 $ 201 $ 1 $ 1 $ 1 $ 23 $ 26 $ 36Interest cost on benefit obligation 644 649 674 342 301 354 59 61 62 105 89 96Expected return on plan assets (874) (912) (949) (378) (336) (487) (8) (10) (12) (100) (77) (109)Amortization of unrecognizedNet transition obligation — — — (1) (1) 1 — — — — — —Prior service cost (benefit) (1) (1) (2) 4 4 4 (3) (1) — — — —Net actuarial loss 47 10 — 57 60 24 11 2 4 20 18 21Curtailment loss (1) — 47 56 13 22 108 — — 16 — — —Net qualified (benefit) expense $(170) $(189) $(198) $ 204 $ 198 $ 205 $60 $ 53 $ 71 $ 48 $ 56 $ 44Nonqualified (benefit) expense $ 41 $ 41 $ 38 $ — $ — $ — $— $ — $ — $ — $ — $ —Total net (benefit) expense $(129) $(148) $(160) $ 204 $ 198 $ 205 $60 $ 53 $ 71 $ 48 $ 56 $ 44(1) The 2009 curtailment loss in the non-U.S pension plans includes an $18 million gain reflecting the sale of Citigroup’s Nikko operations. See Note 3 to the Consolidated Financial Statements for further discussion of thesale of Nikko operations.The estimated net actuarial loss, prior service cost and net transitionobligation that will be amortized from Accumulated other comprehensiveincome (loss) into net expense in 2011 are approximately $147 million,$2 million and $(1) million, respectively, for defined benefit pensionplans. For postretirement plans, the estimated 2011 net actuarial lossand prior service cost amortizations are approximately $41 million and$(3) million, respectively.191