Retirement Benefits

3 Months Ended

Dec. 31, 2015

12. RETIREMENT BENEFITS

The components of net periodic benefit cost for the defined benefit pension and other postretirement benefit plans for the three months ended 31 December 2015 and 2014 were as follows:

	Pension Benefits								Other Benefits
	2015				2014				2015		2014
Three Months Ended 31 December	U.S.		International		U.S.		International
Service cost	$	9.0	$	6.2	$	10.6	$	8.2	$	.5	$	.7
Interest cost		27.7		11.6		31.2		15.0		.5		.6
Expected return on plan assets		(50.5)		(20.7)		(50.5)		(21.1)		-		-
Actuarial loss amortization		21.1		9.2		19.8		10.5		.2		.2
Prior service cost amortization		.7		-		.7		-		-		-
Settlements		-		-		(.1)		(.1)		-		-
Special termination benefits		-		-		2.7		-		-		-
Other		-		.5		1.1		.5		-		-
Net periodic benefit cost	$	8.0	$	6.8	$	15.5	$	13.0	$	1.2	$	1.5

Net periodic benefit cost is primarily included in cost of sales and selling and administrative expense on our consolidated income statements. The amount of net periodic benefit cost capitalized in 2016 and 2015 was not material.

In fiscal 2016, we changed our method to estimate the service cost and interest cost components of net periodic benefit costs for our major defined benefit pension plans. Historically, we estimated the service cost and interest cost components using a single weighted average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to use a spot rate approach in the estimation of these components of benefit cost by applying the specific spot rates along the yield curve to the relevant projected cash flows, as we believe this provides a better estimate of service and interest costs. We consider this change in rate assumption to be a change in estimate and, accordingly, are accounting for it prospectively starting in 2016. We expect that adoption of the spot rate approach will reduce our fiscal 2016 net periodic benefit cost by approximately $30. This change does not affect the measurement of our total benefit obligation.

The decrease in pension expense primarily resulted from the adoption of the spot rate approach to estimate service cost and interest cost and reduced plan participation due to severance actions, partially offset by the adoption of new mortality tables for our major plans.

For the three months ended 31 December 2015 and 2014, our cash contributions to funded pension plans and benefit payments under unfunded pension plans were $51.8 and $76.4, respectively. Total contributions for fiscal 2016 are expected to be approximately $100 to $120. During fiscal 2015, total contributions were $137.5.