analyzing and interpreting pension and health care footnote norfolk southern railroad reports the following pension and other postretirement benefits footnote as part of its 10-k report. december 31, 2018 ($ millions) pension benefits other post- retirement benefits change in benefit obligation benefit obligation at beginning of year $2,541 $510 service cost 39 7 interest cost 83 15 actuarial losses (gains) (149) (24) benefits paid/settlements (143) (42) benefit obligation at end of year $2,371 $466 change in plan assets fair value of plan assets at beginning of year $2,373 $201 actual return on plan assets (143) (19) employer contribution 18 18 benefits paid (143) (42) fair value of plan assets at end of year $2,105 $158 net cost benefit service cost $ 39 $ 7 interest cost 83 15 expected return on plan assets (177) (15) amortization of net losses 57 - amortization of prior service cost (benefit) - (24) net cost (benefit) $ 2 $(17) (a) describe what is meant by service cost and interest cost (the service and interest costs appear both in the reconciliation of the pbo and in the computation of pension expense). service cost represents the additional pension benefits earned by employees during the current year but paid to employees in the future. interest cost is the expense we incur on funds borrowed by the pension plan.