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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Sep. 30, 2021
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS
NOTE 14 EMPLOYEE BENEFIT PLANS
We maintain a domestic noncontributory defined benefit pension plan covering certain U.S. employees who meet certain age and service requirements. In July 2003, we revised the Helmerich & Payne, Inc. Employee Retirement Plan (“Pension Plan”) to close the Pension Plan to new participants effective October 1, 2003, and reduce benefit accruals for current participants through September 30, 2006, at which time benefit accruals were discontinued and the Pension Plan was frozen.

The following table provides a reconciliation of the changes in the pension benefit obligations and fair value of Pension Plan assets over the two-year period ended September 30, 2021 and a statement of the funded status as of September 30, 2021 and 2020:
(in thousands)20212020
Accumulated benefit obligation$110,352 $116,146 
Changes in projected benefit obligations:
Projected benefit obligation at beginning of year$116,146 $119,845 
Interest cost2,925 3,598 
Actuarial loss7,111 4,310 
Benefits paid(15,749)(11,607)
Other(81)— 
Projected benefit obligation at end of year$110,352 $116,146 
Change in plan assets:
Fair value of plan assets at beginning of year$86,103 $91,142 
Actual return on plan assets11,835 6,535 
Employer contribution5,066 33 
Benefits paid(15,749)(11,607)
Fair value of plan assets at end of year$87,255 $86,103 
Funded status of the plan at end of year$(23,097)$(30,043)

Fluctuations in actuarial losses during the period are primarily due to changes in the discount rate, interest rates, and the mortality table. The mortality table issued by the Society of Actuaries in October 2020 was used for the September 30, 2021 pension calculation.
The amounts recognized in the Consolidated Balance Sheets at September 30, 2021 and 2020 are as follows:
(in thousands)20212020
Accrued liabilities$—     $(18)
Noncurrent liabilities-other(23,097)(30,025)
Net amount recognized$(23,097)$(30,043)

The amounts recognized in Accumulated Other Comprehensive Loss at September 30, 2021 and 2020, and not yet reflected in net periodic benefit cost, are as follows:
(in thousands)20212020
Net actuarial loss$26,268     $33,923 

The weighted average assumptions used for the pension calculations were as follows:
September 30,
2021    2020    2019
Discount rate for net periodic benefit costs2.66 %3.16 %4.27 %
Discount rate for year-end obligations2.75 %2.66 %3.16 %
Expected return on plan assets3.50 %4.65 %5.60 %
We made a voluntary contribution of $5.0 million in fiscal year 2021. In fiscal year 2022, we do not expect minimum contributions required by law to be needed. However, we may make contributions in fiscal year 2022 if needed to fund unexpected distributions in lieu of liquidating pension assets.
Components of the net periodic pension expense were as follows:
Year Ended September 30,
(in thousands)202120202019
Interest cost$2,925 $3,598 $4,389 
Expected return on plan assets(3,722)(4,784)(5,523)
Recognized net actuarial loss3,205 2,718 1,229 
Settlement3,448 3,001 1,953 
Other(81)— — 
Net pension expense$5,775 $4,533 $2,048 

We record settlement expense when benefit payments exceed the total annual interest costs.

The following table reflects the expected benefits to be paid from the Pension Plan in each of the next five fiscal years, and in the aggregate for the five years thereafter (in thousands):
Year Ended September 30,
202220232024202520262027 – 2031Total
$7,316 $7,731 $8,483 $7,018 $7,406 $30,990 $68,944 

Included in the Pension Plan is an unfunded supplemental executive retirement plan.
Investment Strategy and Asset Allocation
Our investment policy and strategies are established with a long-term view in mind. The investment strategy is intended to help pay the cost of the Pension Plan while providing adequate security to meet the benefits promised under the Pension Plan. We maintain a diversified asset mix to minimize the risk of a material loss to the portfolio value that might occur from devaluation of any single investment. In determining the appropriate asset mix, our financial strength and ability to fund potential shortfalls are considered. Pension Plan assets are invested in portfolios of diversified public-market equity securities and fixed income securities. The Pension Plan does not directly hold securities of the Company.
The expected long-term rate of return on Pension Plan assets is based on historical and projected rates of return for current and planned asset classes in the Pension Plan’s investment portfolio after analyzing historical experience and future expectations of the return and volatility of various asset classes.

During the 2021 fiscal year, we implemented a glide-path strategy with a goal to reduce risk as certain funded levels are achieved and began aligning our fixed income exposure with our pension liabilities. The target allocation for 2022 and the asset allocation for the Pension Plan at the end of fiscal years 2021 and 2020, by asset category, follows:
Target AllocationSeptember 30,
Asset Category2022    2021    2020
U.S. equities17 %46 %42 %
International equities12 17 22 
Fixed income71 37 36 
Total100 %100 %100 %
Plan Assets

    The fair value of Pension Plan assets at September 30, 2021 and 2020, summarized by level within the fair value hierarchy described in Note 13—Fair Value Measurement of Financial Instruments, are as follows:
September 30, 2021
(in thousands)Total    Level 1    Level 2    Level 3
Short-term investments$2,444 $2,444 $— $— 
Mutual funds:
Domestic stock funds35,212 35,212 — — 
Bond funds17,679 17,679 — — 
Balanced funds17,520 17,520 — — 
International stock funds14,379 14,379 — — 
Total mutual funds84,790 84,790 — — 
Oil and gas properties21 — — 21 
Total$87,255 $87,234 $— $21 
September 30, 2020
(in thousands)Total    Level 1    Level 2    Level 3
Short-term investments$1,541 $1,541 $— $— 
Mutual funds:
Domestic stock funds35,660 35,660 — — 
Bond funds17,328 17,328 — — 
Balanced funds17,447 17,447 — — 
International stock funds14,044 14,044 — — 
Total mutual funds84,479 84,479 — — 
Oil and gas properties83 — — 83 
Total$86,103 $86,020 $— $83 
As of September 30, 2021 and 2020, the Pension Plan’s financial assets utilizing Level 1 inputs are valued based on quoted prices in active markets for identical securities.  As of September 30, 2021 and 2020, the Pension Plan’s assets utilizing Level 3 inputs consist of oil and gas properties. The fair value of oil and gas properties is determined by Wells Fargo Bank, N.A., based upon actual revenue received for the previous twelve-month period and experience with similar assets.
Defined Contribution Plan
Substantially all employees on the U.S. payroll may elect to participate in our 401(k)/Thrift Plan by contributing a portion of their earnings. We contribute an amount equal to 100 percent of the first five percent of the participant’s compensation subject to certain limitations. The annual expense incurred for this defined contribution plan was $13.6 million, $23.8 million and $30.5 million in fiscal years 2021, 2020 and 2019, respectively.