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ITEM 8 / NOTE 22. EMPLOYEE BENEFITS.....................................................................................................................................................................................postretirement plans is November 30, consistent with the fiscal year end of the sponsoring companies. Forall other plans, measurement occurs as of December 31.PensionPostretirement (a)As of or for the Years EndedU.S. Plans (b) Non-U.S. Plans (b) U.S. Plans Non-U.S. PlansDecember 31,(in millions) 2012 2011 2012 2011 2012 2011 2012 2011Change in projected benefit obligation:Benefit obligation, beginning of year $ 4,438 $ 3,878 $ 1,137 $ 1,981 $ 236 $ 279 $ 52 $ 66Service cost 154 150 53 66 5 8 3 4Interest cost 200 207 34 37 11 13 2 2Actuarial (gain) loss 536 653 69 (7) 22 6 11 7Benefits paid:AIG assets (12) (8) (7) (26) (11) (7) (1) (1)Plan assets (150) (118) (35) (48) – – – –Plan amendment – (324) 4 (11) (8) (63) – –Curtailments (5) – (3) – – – (1) –Settlements – – (20) (56) – – – –Foreign exchange effect – – (32) 80 – – – 1Dispositions – – – (888) – – – (30)Acquisitions – – – – – – – –Other – – 5 9 – – – 3Projected benefit obligation, end of year $ 5,161 $ 4,438 $ 1,205 $ 1,137 $ 255 $ 236 $ 66 $ 52Change in plan assets:Fair value of plan assets, beginning of year $ 3,432 $ 3,425 $ 683 $ 954 $ – $ – $ – $ –Actual return on plan assets, net of expenses 438 125 34 3 – – – –AIG contributions 12 8 86 100 11 7 1 1Benefits paid:AIG assets (12) (8) (7) (26) (11) (7) (1) (1)Plan assets (150) (118) (35) (48) – – – –Settlements – – (20) (56) – – – –Foreign exchange effect – – (15) 45 – – – –Dispositions – – – (295) – – – –Acquisitions – – – – – – – –Other – – 1 6 – – – –Fair value of plan assets, end of year $ 3,720 $ 3,432 $ 727 $ 683 $ – $ – $ – $ –Funded status, end of year $ (1,441) $ (1,006) $ (478) $ (454) $ (255) $ (236) $ (66) $ (52)Amounts recognized in the consolidated balance sheet:Assets $ – $ – $ 65 $ 80 $ – $ – $ – $ –Liabilities (1,441) (1,006) (543) (534) (255) (236) (66) (52)Total amounts recognized $ (1,441) $ (1,006) $ (478) $ (454) $ (255) $ (236) $ (66) $ (52)Pre tax amounts recognized in Accumulated othercomprehensive income (loss):Net gain (loss) $ (1,764) $ (1,550) $ (299) $ (272) $ (40) $ (18) $ 1 $ (2)Prior service (cost) credit 267 303 21 30 46 48 (13) 1Total amounts recognized $ (1,497) $ (1,247) $ (278) $ (242) $ 6 $ 30 $ (12) $ (1)(a) We do not currently fund postretirement benefits.(b) Includes non-qualified unfunded plans of which the aggregate projected benefit obligation was $238 million and $210 million for the U.S. and$299 million and $267 million for the non-U.S. at December 31, 2012 and 2011, respectively...................................................................................................................................................................................................................................AIG 2012 Form 10-K 321