Analyzing and Interpreting Pension Disclosures E.I. Du Pont De Nemours and Co.'s 10-K report has the following disclosures related to its retirement plans ($ millions). Obligations and Funded Status Pension Benefits December 31 ($ millions) 2012 2011 Change in benefit obligation Benefit obligation at beginning of year $ 27,083 $ 23,924 Service cost 277 249 Interest cost 1,165 1,253 Plan participants' contributions 24 21 Acturarial loss 2,245 3,062 Benefits paid (1,593) (1,610) Amendments (22) 2 Net effects of acquisitions/divestitures -- 182 Benefit obligation at end of year $ 29,179 $ 27,083 Change in plan assets Fair value of plan assets at beginning of year $ 17,794 $ 18,403 Actual gain on plan assets 2,326 471 Employer contributions 848 341 Plan participants' contributions 24 21 Benefits paid (1,593) (1,610) Net effects of acquisitions/divestitures -- 168 Fair value of plan assets at end of year $ 19,399 $ 17,794 Funded status U.S. plans with plan assets $ (6,625) $ 892 Non-U.S. plans with plan assets (1,443) (317) All other plans (1,712) (1,515) Total $ (9,780) $ (9,289) Amount recognized in the Consolidated Balance Sheets consist of: Other assets $5 (4) Other accrued liabilities (110) (107) Other liabilities (9,303) (9,186) Liabilities related to assets held for sale (372) -- Net amount recognized (9,780) (9,289) Pension Benefits (in millions) Components of net periodic benefit cost (credit) and amounts recognized in other comprehensive income 2012 2011 2010 Net periodic benefit Service cost $ 277 $ 249 $ 207 Interest cost 1,165 1,253 1,262 Expected return on plan assets (1,517) (1,475) (1,435) Amortization of loss 887 613 507 Amortization of prior service cost 13 16 16 Curtailment/settlement loss 7 -- -- Net periodic benefit cost $ 832 $ 656 $ 557 Changes in plan assets and benefit obligations recognized in other comprehensive income Net loss 1,433 $4,069 $635 Amortization of loss (887) (613) (507) Prior service (benefit) cost (22) 2 -- Amortization of prior service cost (13) (16) (16) Curtailment/settlement loss (7) -- -- Total loss recognize in other comprehensive income 504 3,442 112 Noncontrolling interest (1) (11) (1) Accumulated other comprehensive income assumed from purchase of noncontrolling interest 25 -- -- Total loss recognized in other comprehensive income, attributable to DuPont $ 528 $3,431 $111 Total recognized in net periodic benefit cost and other comprehensive income $(1,360) $4,087 $668 Weighted-avg. assumptions used for net periodic benefit cost for years ended Dec. 31 2012 2011 2010 Dicsount Rate 4.32% 5.32% 5.80% Expected return on plan assets 8.61% 8.73% 8.64% Rate of compensation increase 4.18% 4.24% 4.24% The following benefit payments, which reflect future service, as appropriate, are expected to be paid: ($ millions) Pension Benefits 2013 $1,629 2014 1,604 2015 1,629 2016 1,637 2017 1,667 Years 2018-2022 8,678 HINT: Do not use negative signs with your answers. (a) How much pension expense (revenue) does DuPont report in its 2012 income statement? (b) DuPont reports a $1,517 million expected return on pension plan assets as an offset to 2012 pension expense. Approximately, how is this amount computed (estimate from the numbers reported)? (c)DuPont's pension plan is overfunded or underfunded?by how much ?