84 UNITED TECHNOLOGIES CORPORATION Postretirement Benefit Plans. We sponsor a number of postretirement benefit plans that provide health and life benefits to eligible retirees. Such benefits are provided primarily from domestic plans, which comprise approximately 88% of the benefit obligation. The postretirement plans are primarily unfunded. Assets in funded plans are primarily invested in cash and cash equivalents. subsidy for retirements that occur after January 31, 2014. This resulted in a $16 million reduction in the projected benefit obligation as of July 26, 2012. The components of net periodic benefit cost are as follows: As part of our acquisition of Goodrich on July 26, 2012, we assumed approximately $328 million of postretirement projected benefit obligations. We modified the postretirement medical benefits provided to legacy Goodrich salaried employees by eliminating any company Assumed health care cost trend rates are as follows: The estimated amounts that will be amortized from accumu- lated other comprehensive loss into net periodic benefit cost in 2013 include actuarial net gains of $4 million and prior service credit of $11 million. Major assumptions used in determining the benefit obliga- tion and net cost for postretirement plans are presented in the fol- lowing table as weighted-averages: Other changes in plan assets and benefit obligations recog- nized in other comprehensive loss in 2012 are as follows: (DOLLARS IN MILLIONS) 2012 2011 2010 Other Postretirement Benefits: Service cost $ 3 $ 3 $ 2 Interest cost 37 39 46 Expected return on plan assets – (1) (1) Amortization of prior service credit (4) (2) (2) Recognized actuarial net gain (6) (8) (1) Net settlement and curtailment gain (2) (8) – Net periodic other postretirement benefit cost $2 8 $2 3 $4 4 (DOLLARS IN MILLIONS) 2012 2011 Change in Benefit Obligation: Beginning balance $ 784 $ 832 Service cost 3 3 Interest cost 37 39 Actuarial loss (gain) 45 (7) Total benefits paid (107) (104) Business combinations 328 – Other 16 21 Ending balance $ 1,106 $ 784 Change in Plan Assets: Beginning balance $ – $ 10 Actual return on plan assets – 2 Employer contributions 85 76 Benefits paid from plan assets (107) (104) Other 22 16 Ending balance $ – $ – Funded Status: Fair value of plan assets $ – $ – Benefit obligations (1,106) (784) Funded status of plan $ (1,106) $ (784) Amounts Recognized in the Consolidated Balance Sheet Consist of: Current liability $ (91) $ (74) Noncurrent liability (1,015) (710) Net amount recognized $ (1,106) $ (784) Amounts Recognized in Accumulated Other Comprehensive Loss Consist of: Net actuarial gain $ (65) $ (120) Prior service (credit) cost (11) 2 Net amount recognized $ (76) $ (118) (DOLLARS IN MILLIONS) Current year actuarial loss $ 49 Current year prior service credit (16) Amortization of prior service credit 4 Amortization of actuarial net gain 6 Net settlements and curtailments (1) Total recognized in other comprehensive loss $ 42 Net recognized in net periodic other postretirement benefit cost and other comprehensive loss $ 70 Benefit Obligation Net Cost 2012 2011 2012 2011 2010 Discount rate 3.6% 4.3% 4.2% 4.9% 5.5% Expected return on plan assets – – – 5.0% 5.0% 2012 2011 Health care cost trend rate assumed for next year 8.0% 8.5% Rate that the cost trend rate gradually declines to 5.0% 5.0% Year that the rate reaches the rate it is assumed to remain at 2019 2019