2012 Annual Report  Pension Benefits Other Benefits Dollars in Millions 2012 2011 2012 2011 Benefit obligations at beginning of year $  7,499 $  6,704 $   582 $  589 Service cost—benefits earned during the year   32  43  8  8 Interest cost   319  337  22  26 Plan participants’ contributions   2  3  24  25 Curtailments   (19)  (3)  -  (1) Settlements   (260)  (41)  (2) Plan amendments   (8)  (40)  -  (1) Actuarial losses/(gains)   838  876  (107)  6 Retiree Drug Subsidy   -  -  6  12 Benefits paid   (227)  (386)  (76)  (79) Exchange rate losses/(gains)   24  6  1  (1) Benefit obligations at end of year  $  8,200 $  7,499 $   460 $  582 Fair value of plan assets at beginning of year  $  5,842 $  5,766 $   305 $  315 Actual return on plan assets   761  66  41  10 Employer contributions   396  432  11  24 Plan participants’ contributions   2  3  24  25 Settlements   (260)  (41)  -  (2) Retiree Drug Subsidy   -  -  6  12 Benefits paid   (227)  (386)  (76)  (79) Exchange rate gains/(losses)   28  2  -  - Fair value of plan assets at end of year  $  6,542 $  5,842 $   311 $  305 Funded status  $  (1,658) $  (1,657)  $   (149) $  (277) Assets/Liabilities recognized:  Other assets  $  22 $  39 $   12 $  - Accrued expenses   (37)  (33)  (12)  (12) Pension and other postretirement liabilities   (1,643)  (1,663)  (149)  (265) Funded status  $  (1,658) $  (1,657)  $  $  (277) Recognized in accumulated other comprehensive loss:  Net actuarial loss  $  4,572 $  4,297 $   34 $  166 Net obligation at adoption   1  1  -  - Prior service cost/(benefit)   (44)  (39)  (6)  (8) Total  $  4,529 $  4,259 $   28 $  158 Changes in defined benefit and postretirement benefit plan obligations, assets, funded status and amounts recognized in the  consolidated balance sheets were as follows:  The accumulated benefit obligation for all defined benefit pension plans was $8,068 million and $7,322 million at December 31, 2012  and 2011, respectively.  Additional information related to pension plans was as follows:  Dollars in Millions  2012 2011 Pension plans with projected benefit obligations in excess of plan assets: Projected benefit obligation  $  8,112  $  7,236  Fair value of plan assets   6,432   5,540  Pension plans with accumulated benefit obligations in excess of plan assets : Accumulated benefit obligation  $  7,987  $  6,867  Fair value of plan assets   6,432   5,327  Actuarial Assumptions  Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:  Pension Benefits Other Benefits 2012 2011 2012 2011 Discount rate 3.7 % 4.4 % 3.0 % 4.1 % Rate of compensation increase  2.3 2.3 2.0 2.0 59 