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Retirement Plans
 12 Months Ended
Sep. 30, 2019
Retirement Benefits [Abstract]  
Retirement Plans RETIREMENT PLANS

Retirement plans expense includes the following components:
 
U.S. Plans
 
Non-U.S. Plans
 
2017

 
2018

 
2019

 
2017

 
2018

 
2019

Defined benefit plans:
 
 
 
 
 
 
 
 
 
 
 
     Service cost (benefits earned during the period)
$
60

 
52

 
47

 
19

 
24

 
24

     Interest cost
134

 
141

 
155

 
30

 
39

 
38

     Expected return on plan assets
(290
)
 
(283
)
 
(281
)
 
(56
)
 
(67
)
 
(68
)
     Net amortization and other
211

 
129

 
81

 
22

 
14

 
6

       Net periodic pension expense
115

 
39

 
2

 
15

 
10

 
—

Defined contribution plans
96

 
132

 
125

 
47

 
52

 
56

             Total retirement plans expense
$
211

 
171

 
127

 
62

 
62

 
56



The decrease in net periodic pension expense in 2019 is primarily attributable to lower amortization expense compared to the prior year. In 2017, net periodic pension expense and defined contribution expense included $3
and $6, respectively, related to discontinued operations. For defined contribution plans, the Company makes cash contributions based on plan requirements, which are expensed as incurred.

The Company's principal U.S. defined benefit plan is closed to employees hired after January 1, 2016 while shorter-tenured employees ceased accruing benefits effective October 1, 2016.

Details of the changes in the actuarial present value of the projected benefit obligation and the fair value of plan assets for defined benefit pension plans follow:
 
U.S. Plans
 
Non-U.S. Plans
 
2018

 
2019

 
2018

 
2019

Projected benefit obligation, beginning
$
4,369

 
3,957

 
1,489

 
1,442

     Service cost
52

 
47

 
24

 
24

     Interest cost
141

 
155

 
39

 
38

     Actuarial (gain) loss
(262
)
 
608

 
(51
)
 
216

     Benefits paid
(205
)
 
(206
)
 
(36
)
 
(36
)
     Settlements
(152
)
 
(152
)
 
(49
)
 
(41
)
     Acquisitions (Divestitures), net
13

 
—

 
54

 
2

     Foreign currency translation and other
1

 
1

 
(28
)
 
(61
)
Projected benefit obligation, ending
$
3,957

 
4,410

 
1,442

 
1,584

 
 
 
 
 
 
 
 
Fair value of plan assets, beginning
$
4,292

 
4,233

 
1,236

 
1,243

     Actual return on plan assets
265

 
316

 
69

 
135

     Employer contributions
20

 
16

 
41

 
44

     Benefits paid
(205
)
 
(206
)
 
(36
)
 
(36
)
     Settlements
(152
)
 
(152
)
 
(49
)
 
(41
)
     Acquisitions (Divestitures), net
12

 
—

 
10

 
—

     Foreign currency translation and other
1

 
1

 
(28
)
 
(61
)
Fair value of plan assets, ending
$
4,233

 
4,208

 
1,243

 
1,284

 
 
 
 
 
 
 
 
     Net amount recognized in the balance sheet
$
276

 
(202
)
 
(199
)
 
(300
)
 
 
 
 
 
 
 
 
Location of net amount recognized in the balance sheet:
 
 
 
 
 
 
 
Noncurrent asset
$
465

 
67

 
126

 
97

Current liability
(10
)
 
(11
)
 
(13
)
 
(14
)
Noncurrent liability
(179
)
 
(258
)
 
(312
)
 
(383
)
     Net amount recognized in the balance sheet
$
276

 
(202
)
 
(199
)
 
(300
)
 
 
 
 
 
 
 
 
Pretax accumulated other comprehensive loss
$
(548
)
 
(1,040
)
 
(164
)
 
(307
)


Approximately $162 of the $1,347 of pretax losses deferred in accumulated other comprehensive income (loss) at September 30, 2019 will be amortized to expense in 2020. As of September 30, 2019, U.S. pension plans were underfunded by $202 in total, including unfunded plans totaling $211. The non-U.S. plans were underfunded by $300, including unfunded plans totaling $311.

As of the September 30, 2019 and 2018 measurement dates, the plans' total accumulated benefit obligation was $5,682 and $5,154, respectively. The total projected benefit obligation, accumulated benefit obligation and fair value of plan assets for individual plans with accumulated benefit obligations in excess of plan assets were $1,113, $991 and $456, respectively, for 2019, and $585, $508 and $87, respectively, for 2018.

Future benefit payments by U.S. plans are estimated to be $208 in 2020, $215 in 2021, $222 in 2022, $228 in 2023, $234 in 2024 and $1,233 in total over the five years 2025 through 2029. Based on foreign currency exchange
rates as of September 30, 2019, future benefit payments by non-U.S. plans are estimated to be $74 in 2020, $72 in 2021, $78 in 2022, $80 in 2023, $84 in 2024 and $462 in total over the five years 2025 through 2029. The Company expects to contribute approximately $60 to its retirement plans in 2020.

The weighted-average assumptions used in the valuation of pension benefits follow:
 
U.S. Plans
 
Non-U.S. Plans
 
2017

 
2018

 
2019

 
2017

 
2018

 
2019

Net pension expense
 
 
 
 
 
 
 
 
 
 
 
Discount rate used to determine service cost
3.75
%
 
3.95
%
 
4.33
%
 
2.3
%
 
2.6
%
 
2.7
%
Discount rate used to determine interest cost
2.90
%
 
3.25
%
 
3.98
%
 
2.3
%
 
2.6
%
 
2.7
%
Expected return on plan assets
7.25
%
 
7.00
%
 
7.00
%
 
6.2
%
 
5.7
%
 
6.1
%
Rate of compensation increase
3.25
%
 
3.25
%
 
3.25
%
 
3.2
%
 
3.4
%
 
3.5
%
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligations
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.76
%
 
4.26
%
 
3.22
%
 
2.6
%
 
2.7
%
 
1.9
%
Rate of compensation increase
3.25
%
 
3.25
%
 
3.25
%
 
3.4
%
 
3.5
%
 
3.7
%


The discount rate for the U.S. retirement plans was 3.22 percent as of September 30, 2019. An actuarially developed, company-specific yield curve is used to determine the discount rate. To determine the service and interest cost components of pension expense for its U.S. retirement plans, the Company applies the specific spot rates along the yield curve, rather than the single weighted-average rate, to the projected cash flows to provide more precise measurement of these costs. The expected return on plan assets assumption is determined by reviewing the investment returns of the plans for the past 10 years plus longer-term historical returns of an asset mix approximating the Company's asset allocation targets, and periodically comparing these returns to expectations of investment advisors and actuaries to determine whether long-term future returns are expected to differ significantly from the past.

The Company's asset allocations at September 30, 2019 and 2018, and weighted-average target allocations follow:
 
U.S. Plans
 
Non-U.S. Plans
 
2018

 
2019

 
Target
 
2018

 
2019

 
Target
Equity securities
62
%
 
53
%
 
50-60%
 
52
%
 
42
%
 
40-50%
Debt securities
34

 
46

 
40-50
 
38

 
47

 
45-55
Other
4

 
1

 
0-10
 
10

 
11

 
5-15
     Total
100
%
 
100
%
 
100%
 
100
%
 
100
%
 
100%


The primary objective for the investment of pension assets is to secure participant retirement benefits by earning a reasonable rate of return. Plan assets are invested consistent with the provisions of the prudence and diversification rules of ERISA and with a long-term investment horizon. The Company continuously monitors the value of assets by class and routinely rebalances to remain within target allocations. The equity strategy is to minimize concentrations of risk by investing primarily in a mix of companies that are diversified across geographies, market capitalization, style, sectors and industries worldwide. The approach for bonds emphasizes investment-grade corporate and government debt with maturities matching a portion of the longer duration pension liabilities. The bonds strategy also includes a high-yield element which is generally shorter in duration. For diversification, a small portion of U.S. plan assets is allocated to private equity partnerships and real asset fund investments, providing opportunities for above market returns. Leveraging techniques are not used and the use of derivatives in any fund is limited and inconsequential.

The fair values of defined benefit pension assets as of September 30, organized by asset class and by the fair value hierarchy of ASC 820, Fair Value Measurement, follow. Investments valued based on the net asset value (NAV) of fund units held, as derived from the fair value of the underlying assets, are excluded from the fair value hierarchy.
 
Level 1

 
Level 2

 
Level 3

 
Measured at NAV
 
Total

 
%

2019
 
 
 
 
 
 
 
 
 
 
 
U.S. equities
$
789

 
5

 
386

 
284

 
1,464

 
27
%
International equities
459

 
15

 
—

 
615

 
1,089

 
20
%
Emerging market equities
—

 
—

 
—

 
213

 
213

 
4
%
Corporate bonds
—

 
1,008

 
—

 
464

 
1,472

 
27
%
Government bonds
0

 
512

 
—

 
540

 
1,052

 
19
%
High-yield bonds
—

 
—

 
—

 
—

 
—

 
—
%
Other
1

 
8

 
129

 
64

 
202

 
3
%
     Total
$
1,249

 
1,548

 
515

 
2,180

 
5,492

 
100
%
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
U.S. equities
$
968

 
5

 
350

 
320

 
1,643

 
30
%
International equities
595

 
21

 
—

 
745

 
1,361

 
25
%
Emerging market equities
—

 
—

 
—

 
243

 
243

 
5
%
Corporate bonds
—

 
696

 
—

 
423

 
1,119

 
20
%
Government bonds
—

 
350

 
—

 
438

 
788

 
14
%
High-yield bonds
—

 
—

 
—

 
10

 
10

 
—
%
Other
107

 
6

 
121

 
78

 
312

 
6
%
     Total
$
1,670

 
1,078

 
471

 
2,257

 
5,476

 
100
%


Asset Classes
U.S. equities reflect companies domiciled in the U.S., including multinational companies. International equities are comprised of companies domiciled in developed nations outside the U.S. Emerging market equities are comprised of companies domiciled in portions of Asia, Eastern Europe and Latin America. Corporate bonds represent investment-grade debt of issuers primarily from the U.S. Government bonds include investment-grade instruments issued by federal, state and local governments, primarily in the U.S. High-yield bonds include noninvestment-grade debt from a diverse group of developed market issuers. Other includes cash, interests in mixed asset funds investing in commodities, natural resources, agriculture, real estate and infrastructure funds, life insurance contracts (U.S.), and shares in certain general investment funds of financial institutions or insurance arrangements (non-U.S.) that typically ensure no market losses or provide for a small minimum return guarantee.

Fair Value Hierarchy Categories
Valuations of Level 1 assets for all classes are based on quoted closing market prices from the principal exchanges where the individual securities are traded. Cash is valued at cost, which approximates fair value. Debt securities categorized as Level 2 assets are generally valued based on independent broker/dealer bids or by comparison to other debt securities having similar durations, yields and credit ratings. U.S. equity securities classified as Level 3 are fund investments in private companies. Valuation techniques and inputs for these assets include discounted cash flow analysis, earnings multiple approaches, recent transactions, transfer restrictions, prevailing discount rates, volatilities, credit ratings and other factors. In the Other class, interests in mixed asset funds are Level 2, and U.S. life insurance contracts and non-U.S. general fund investments and insurance arrangements are Level 3. Investments measured at net asset value are primarily nonexchange-traded commingled or collective funds where the underlying securities have observable prices available from active markets.

Details of the changes in value for Level 3 assets follow:
 
2018

 
2019

Level 3, beginning
$
451

 
471

     Gains (Losses) on assets held
1

 
—

     Gains (Losses) on assets sold
37

 
34

     Purchases, sales and settlements, net
(18
)
 
10

Level 3, ending
$
471

 
515