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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Jun. 30, 2019
Defined Benefit Plan [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
Retirement Income Plans
The Company has various retirement income plans for eligible domestic and international employees. As of June 30, 2019 and 2018, the domestic retirement income plans were frozen for most participants, and the benefits of the domestic retirement income plans were generally based on either employee years of service and compensation or a stated dollar amount per year of service.
The Company contributed $63, $21 and $31 to its domestic retirement income plans during fiscal years 2019, 2018 and 2017, respectively. The Company’s funding policy is to contribute amounts sufficient to meet benefit payments and minimum funding requirements as set forth in employee benefit tax laws plus additional amounts as the Company may determine to be appropriate.
Retirement Health Care Plans
The Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The plans pay stated percentages of covered expenses after annual deductibles have been met or stated reimbursements up to a specified dollar subsidy amount. Benefits paid take into consideration payments by Medicare for the domestic plan. The plans are funded as claims are paid, and the Company has the right to modify or terminate certain plans.
Benefit Obligation and Funded Status
Summarized information for the Company’s retirement income and retirement health care plans as of and for the fiscal years ended June 30 is as follows:
 
Retirement
Income
 
Retirement
Health Care
 
2019
 
2018
 
2019
 
2018
Change in benefit obligations:
 
 
 
 
 
 
 
Benefit obligation as of beginning of year
$
593

 
$
633

 
$
38

 
$
42

Service cost
1

 
1

 
—

 
—

Interest cost
23

 
23

 
2

 
2

Actuarial loss (gain)
26

 
(21
)
 
(3
)
 
(2
)
Plan amendments
—

 
1

 
—

 
—

Translation and other adjustments
—

 
(1
)
 
—

 
—

Benefits paid
(39
)
 
(43
)
 
(3
)
 
(4
)
Benefit obligation as of end of year
604

 
593

 
34

 
38

Change in plan assets:
 
 
 
 
 
 
 
Fair value of assets as of beginning of year
420

 
434

 
—

 
—

Actual return on plan assets
41

 
8

 
—

 
—

Employer contributions
63

 
22

 
3

 
4

Benefits paid
(39
)
 
(43
)
 
(3
)
 
(4
)
Translation and other adjustments
—

 
(1
)
 
—

 
—

Fair value of plan assets as of end of year
485

 
420

 
—

 
—

Accrued benefit cost, net funded status
$
(119
)
 
$
(173
)
 
$
(34
)
 
$
(38
)

Amount recognized in the balance sheets consists of:
 
 
 
 
 
 
 
Pension benefit assets
$
48

 
$
3

 
$
—

 
$
—

Current accrued benefit liability
(12
)
 
(13
)
 
(2
)
 
(2
)
Non-current accrued benefit liability
(155
)
 
(163
)
 
(32
)
 
(36
)
Accrued benefit cost, net
$
(119
)
 
$
(173
)
 
$
(34
)
 
$
(38
)

For the retirement income plans, the benefit obligation is the projected benefit obligation. For the retirement health care plan, the benefit obligation is the accumulated benefit obligation (ABO).
The ABO for all retirement income plans was $603, $592 and $632 as of June 30, 2019, 2018 and 2017, respectively.
Retirement income plans with ABO in excess of plan assets as of June 30 were as follows:
 
ABO Exceeds the Fair Value of Plan Assets
 
2019
 
2018
Projected benefit obligation
$
167

 
$
571

Accumulated benefit obligation
166

 
571

Fair value of plan assets
—

 
395



Net Periodic Benefit Cost
The net cost of the retirement income and health care plans for the fiscal years ended June 30 included the following components:
 
Retirement Income
 
Retirement Health Care
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Service cost
$
1

 
$
1

 
$
1

 
$
—

 
$
—

 
$
—

Interest cost
23

 
23

 
22

 
2

 
2

 
2

Expected return on plan assets
(18
)
 
(19
)
 
(20
)
 
—

 
—

 
—

Amortization of unrecognized items     
9

 
10

 
11

 
(3
)
 
(3
)
 
(2
)
Total
$
15

 
$
15

 
$
14

 
$
(1
)
 
$
(1
)
 
$
—


As a result of adopting ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715),” effective July 1, 2018, net periodic benefit cost is reflected in Other (income) expense, net for fiscal year 2019, and in Cost of products sold, Selling and administrative expenses and Research and development costs prior to fiscal year 2019. Refer to Note 1 for more details.
Items not yet recognized as a component of postretirement expense as of June 30, 2019, consisted of:
 
Retirement
Income
 
Retirement
Health Care
Net actuarial loss (gain)
$
236

 
$
(18
)
Prior service benefit
—

 
(2
)
Net deferred income tax (assets) liabilities
(56
)
 
5

Accumulated other comprehensive loss (income)
$
180

 
$
(15
)

Net actuarial loss (gain) recorded in Accumulated other comprehensive net (losses) income for the fiscal year ended June 30, 2019, included the following:
 
Retirement
Income
 
Retirement
Health Care
Net actuarial loss (gain) as of beginning of year
$
242

 
$
(17
)
Amortization during the year
(9
)
 
2

Loss (gain) during the year
3

 
(3
)
Net actuarial loss (gain) as of end of year
$
236

 
$
(18
)

The Company uses the straight-line amortization method for unrecognized prior service costs and benefits. In fiscal year 2020, the Company expects to recognize, on a pre-tax basis, $9 of the net actuarial loss as a component of net periodic benefit cost for the retirement income plans. In addition, in fiscal year 2020, the Company expects to recognize, on a pre-tax basis, $3 of the net actuarial gain as a component of net periodic benefit cost for the retirement health care plans.
Assumptions
Weighted-average assumptions used to estimate the actuarial present value of benefit obligations were as follows as of June 30:
 
Retirement Income
 
Retirement Health Care
 
2019
 
2018
 
2019
 
2018
Discount rate
3.41
%
 
4.10
%
 
3.35
%
 
4.01
%
Rate of compensation increase
2.86
%
 
2.87
%
 
n/a

 
n/a


Weighted-average assumptions used to estimate the retirement income and retirement health care costs were as follows as of June 30:
 
Retirement Income
 
2019
 
2018
 
2017
Discount rate
4.10
%
 
3.70
%
 
3.42
%
Rate of compensation increase
2.87
%
 
2.83
%
 
2.92
%
Expected return on plan assets
4.33
%
 
4.43
%
 
4.73
%
 
 
 
 
 
 
 
Retirement Health Care
 
2019
 
2018
 
2017
Discount rate
4.01
%
 
3.66
%
 
3.42
%

The expected long-term rate of return assumption is based on an analysis of historical experience of the portfolio and the summation of prospective returns for each asset class in proportion to the fund’s current asset allocation.
Expected Benefit Payments
Expected benefit payments for the Company’s retirement income and retirement health care plans as of June 30, 2019, were as follows:
 
Retirement
Income
 
Retirement
Health Care
2020
$
38

 
$
2

2021
51

 
2

2022
36

 
2

2023
36

 
2

2024
37

 
2

Fiscal years 2025 through 2029
186

 
10


Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service.
Plan Assets
The target allocations and weighted average asset allocations by asset category of the investment portfolio for the Company’s domestic retirement income plans as of June 30 were:
 
% Target Allocation
 
% of Plan Assets
 
2019
 
2018
 
2019
 
2018
U.S. equity
9
%
 
11
%
 
9
%
 
11
%
International equity
8
%
 
12
%
 
8
%
 
12
%
Fixed income
83
%
 
74
%
 
83
%
 
74
%
Other
—
%
 
3
%
 
—
%
 
3
%
Total
100
%
 
100
%
 
100
%
 
100
%

The target asset allocation is determined based on the optimal balance between risk and return and, at times, may be adjusted to achieve the plan’s overall investment objective to generate sufficient resources to pay current and projected plan obligations over the life of the domestic retirement income plan.
The following table sets forth by level within the fair value hierarchy, the retirement income plans’ assets carried at fair value as of June 30:
 
2019
 
Level 1
 
Level 2
 
Total
Cash equivalents
$
2

 
$
—

 
$
2

Total assets in the fair value hierarchy
$
2

 
$
—

 
$
2

 
 
 
 
 
 
Common collective trusts measured at net asset value
 
 
 
 
 
Bond funds
 
 
 
 
$
393

International equity funds
 
 
 
 
50

Domestic equity funds
 
 
 
 
39

Real estate fund
 
 
 
 
1

Total common collective trusts measured at net asset value
 
 
 
 
483

Total assets at fair value
 
 
 
 
$
485

 
2018
 
Level 1
 
Level 2
 
Total
Cash equivalents
$
3

 
$
—

 
$
3

Total assets in the fair value hierarchy
$
3

 
$
—

 
$
3

 
 
 
 
 
 
Common collective trusts measured at net asset value
 
 
 
 
 
Bond funds
 
 
 
 
$
299

International equity funds
 
 
 
 
60

Domestic equity funds
 
 
 
 
44

Real estate fund
 
 
 
 
14

Total common collective trusts measured at net asset value
 
 
 
 
417

Total assets at fair value
 
 
 
 
$
420


The carrying value of cash equivalents approximated their aggregate fair value as of June 30, 2019 and 2018.
Common collective trust funds are not publicly traded and were valued at a net asset value unit price determined by the portfolio’s sponsor based on the fair value of underlying assets held by the common collective trust fund on June 30, 2019 and 2018.
The common collective trusts are invested in various trusts that attempt to achieve their investment objectives by investing primarily in other collective investment funds that have characteristics consistent with each trust’s overall investment objective and strategy.
Defined Contribution Plans
The Company has various defined contribution plans for eligible domestic and international employees. The aggregate cost of the domestic defined contribution plans was $49, $47 and $47 in fiscal years 2019, 2018 and 2017, respectively. The aggregate cost of the international defined contribution plans was $4, $3 and $3 for the fiscal years ended June 30, 2019, 2018 and 2017, respectively.