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Employee Postretirement Benefits | 12 Months Ended
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Dec. 31, 2020
Defined Benefit Plan [Abstract] |
Employee Postretirement Benefits | Employee Postretirement Benefits Substantially all regular employees in the U.S. and the United Kingdom are covered by defined contribution retirement plans and certain U.S. and United Kingdom employees previously earned benefits covered by defined benefit pension plans that currently provide no future service benefit (the "Principal Plans"). Certain other subsidiaries have defined benefit pension plans or, in certain countries, termination pay plans covering substantially all regular employees. The funding policy for our qualified defined benefit pension plans is to contribute assets at least equal in amount to regulatory minimum requirements. Nonqualified U.S. plans providing pension benefits in excess of limitations imposed by the U.S. income tax code are not funded. Substantially all U.S. retirees and employees have access to our unfunded health care and life insurance benefit plans. The annual increase in the consolidated weighted-average health care cost trend rate is expected to be 5.5 percent in 2021 and to decline to 4.5 percent in 2029 and thereafter. Assumed health care cost trend rates affect the amounts reported for postretirement health care benefit plans. As a result of restructuring actions related to the 2018 Global Restructuring Program, aggregate pension settlement charges of $49 and $46 during 2020 and 2019 and a curtailment gain of $1 during 2019 were recognized in Nonoperating expense, respectively, primarily related to the defined benefit pension plans in the U.S., United Kingdom and Canada (see Note 2 for further information about the 2018 Global Restructuring Program). Summarized financial information about postretirement plans, excluding defined contribution retirement plans, is presented below:
| Pension Benefits |  | Other Benefits
| Year Ended December 31
| 2020 |  | 2019 |  | 2020 |  | 2019
Change in Benefit Obligation |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 4,047 |  |  | $ | 3,687 |  |  | $ | 693 |  |  | $ | 673 |
Service cost | 22 |  |  | 21 |  |  | 8 |  |  | 8 |
Interest cost | 95 |  |  | 121 |  |  | 23 |  |  | 28 |
Actuarial (gain) loss(a) | 333 |  |  | 446 |  |  | 42 |  |  | 36 |
Currency and other | 134 |  |  | 51 |  |  | (10) |  |  | — |
Benefit payments from plans | (169) |  |  | (142) |  |  | — |  |  | — |
Direct benefit payments | (8) |  |  | (10) |  |  | (47) |  |  | (52) |
Settlements and curtailments | (113) |  |  | (127) |  |  | — |  |  | — |
Benefit obligation at end of year | 4,341 |  |  | 4,047 |  |  | 709 |  |  | 693 |
Change in Plan Assets |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 3,803 |  |  | 3,398 |  |  | — |  |  | — |
Actual return on plan assets | 489 |  |  | 572 |  |  | — |  |  | — |
Employer contributions | 40 |  |  | 50 |  |  | — |  |  | — |
Currency and other | 120 |  |  | 51 |  |  | — |  |  | — |
Benefit payments | (169) |  |  | (142) |  |  | — |  |  | — |
Settlements | (90) |  |  | (126) |  |  | — |  |  | — |
Fair value of plan assets at end of year | 4,193 |  |  | 3,803 |  |  | — |  |  | — |
Funded Status | $ | (148) |  |  | $ | (244) |  |  | $ | (709) |  |  | $ | (693) |
(a) The actuarial net losses in 2020 and 2019 were primarily due to discount rate decreases in 2020 and 2019. Substantially all of the funded status of pension and other benefits is recognized in the consolidated balance sheet in Noncurrent Employee Benefits, with the remainder recognized in Accrued Expenses and other current liabilities and Other Assets. Information for the Principal Plans and All Other Pension Plans
| Principal Plans |  | All Other Pension Plans |  | Total
| Year Ended December 31
| 2020 |  | 2019 |  | 2020 |  | 2019 |  | 2020 |  | 2019
Projected benefit obligation (“PBO”) | $ | 3,629 |  |  | $ | 3,406 |  |  | $ | 712 |  |  | $ | 641 |  |  | $ | 4,341 |  |  | $ | 4,047 |
Accumulated benefit obligation (“ABO”) | 3,629 |  |  | 3,406 |  |  | 619 |  |  | 561 |  |  | 4,248 |  |  | 3,967 |
Fair value of plan assets | 3,627 |  |  | 3,303 |  |  | 566 |  |  | 500 |  |  | 4,193 |  |  | 3,803 |
Approximately one-half of the PBO and fair value of plan assets for the Principal Plans relate to the U.S. qualified and nonqualified pension plans. Information for Pension Plans with an ABO in Excess of Plan Assets
| December 31
| 2020 |  | 2019
ABO | $ | 311 |  |  | $ | 1,956 |
Fair value of plan assets | 119 |  |  | 1,714 |
Information for Pension Plans with a PBO in Excess of Plan Assets
| December 31
| 2020 |  | 2019
PBO | $ | 744 |  |  | $ | 2,303 |
Fair value of plan assets | 529 |  |  | 2,039 |
Components of Net Periodic Benefit Cost
| Pension Benefits |  | Other Benefits
| Year Ended December 31
| 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Service cost | $ | 22 |  |  | $ | 21 |  |  | $ | 36 |  |  | $ | 8 |  |  | $ | 8 |  |  | $ | 11 |
Interest cost | 95 |  |  | 121 |  |  | 128 |  |  | 23 |  |  | 28 |  |  | 28 |
Expected return on plan assets(a) | (134) |  |  | (144) |  |  | (166) |  |  | — |  |  | — |  |  | — |
Recognized net actuarial loss | 42 |  |  | 44 |  |  | 47 |  |  | 1 |  |  | — |  |  | 1 |
Settlements and curtailments | 49 |  |  | 45 |  |  | 136 |  |  | — |  |  | — |  |  | — |
Other | (4) |  |  | (4) |  |  | (7) |  |  | (2) |  |  | (1) |  |  | (3) |
Net periodic benefit cost | $ | 70 |  |  | $ | 83 |  |  | $ | 174 |  |  | $ | 30 |  |  | $ | 35 |  |  | $ | 37 |
(a)The expected return on plan assets is determined by multiplying the fair value of plan assets at the remeasurement date, typically the prior year-end adjusted for estimated current year cash benefit payments and contributions, by the expected long-term rate of return. The components of net periodic benefit cost other than the service cost component are included in the line item Nonoperating expense in our consolidated income statement. Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
| Pension Benefits |  | Other Benefits
| Projected 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Discount rate | 1.93 | % |  | 2.44 | % |  | 3.40 | % |  | 3.23 | % |  | 3.51 | % |  | 4.50 | % |  | 3.91 | %
Expected long-term return on plan assets | 3.41 | % |  | 3.66 | % |  | 4.39 | % |  | 4.50 | % |  | — |  |  | — |  |  | — |
Rate of compensation increase | 3.07 | % |  | 3.08 | % |  | 3.08 | % |  | 2.27 | % |  | — |  |  | — |  |  | — |
Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31
| Pension Benefits |  | Other Benefits
| 2020 |  | 2019 |  | 2020 |  | 2019
Discount rate | 1.93 | % |  | 2.51 | % |  | 2.69 | % |  | 3.51 | %
Rate of compensation increase | 3.07 | % |  | 3.08 | % |  | — |  |  | — |
Investment Strategies for the Principal Plans Strategic asset allocation decisions are made considering several risk factors, including plan participants' retirement benefit security, the estimated payments of the associated liabilities, the plan funded status, and Kimberly-Clark's financial condition. The resulting strategic asset allocation is a diversified blend of equity and fixed income investments. Equity investments are typically diversified across geographies and market capitalization. Fixed income investments are diversified across multiple sectors including government issues and corporate debt instruments with a portfolio duration that is consistent with the estimated payment of the associated liability. Actual asset allocation is regularly reviewed and periodically rebalanced to the strategic allocation when considered appropriate. Our 2021 target plan asset allocation for the Principal Plans is approximately 85 percent fixed income securities and 15 percent equity securities. The expected long-term rate of return is generally evaluated on an annual basis. In setting this assumption, we consider a number of factors including projected future returns by asset class relative to the current asset allocation. The weighted-average expected long-term rate of return on pension fund assets used to calculate pension expense for the Principal Plans was 3.76 percent in 2020, 4.59 percent in 2019 and 4.75 percent in 2018, and will be 3.51 percent in 2021. Set forth below are the pension plan assets of the Principal Plans measured at fair value, by level in the fair-value hierarchy. More than 70 percent of the assets are held in pooled funds and are measured using a net asset value (or its equivalent). Accordingly, such assets do not meet the Level 1, Level 2, or Level 3 criteria of the fair value hierarchy.
| Fair Value Measurements at December 31, 2020
| Total Plan Assets |  | Assets at Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Assets at Significant Observable Inputs (Level 2) |  | Assets at Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents |  |  |  |  |  |  |
Held directly | $ | 56 |  |  | $ | 56 |  |  | $ | — |  |  | $ | — |
Held through mutual and pooled funds measured at net asset value | 15 |  |  | — |  |  | — |  |  | — |
Fixed Income |  |  |  |  |  |  |
Held directly |  |  |  |  |  |  |
U.S. government and municipals | 191 |  |  | 171 |  |  | 20 |  |  | — |
U.S. corporate debt | 310 |  |  | — |  |  | 310 |  |  | — |
International bonds | 42 |  |  | — |  |  | 42 |  |  | — |
Held through mutual and pooled funds measured at net asset value |  |  |  |  |  |  |
U.S. government and municipals | 167 |  |  | — |  |  | — |  |  | — |
U.S. corporate debt | 730 |  |  | — |  |  | — |  |  | — |
International bonds | 1,062 |  |  | — |  |  | — |  |  | — |
Equity |  |  |  |  |  |  |
Held directly |  |  |  |  |  |  |
U.S. equity | 18 |  |  | 18 |  |  | — |  |  | — |
International equity | 31 |  |  | 31 |  |  | — |  |  | — |
Held through mutual and pooled funds measured at net asset value |  |  |  |  |  |  |
Non-U.S. equity | 107 |  |  | — |  |  | — |  |  | — |
Global equity | 517 |  |  | — |  |  | — |  |  | — |
Insurance Contracts | 380 |  |  | — |  |  | — |  |  | 380 |
Other | 1 |  |  | 1 |  |  | — |  |  | — |
Total Plan Assets | $ | 3,627 |  |  | $ | 277 |  |  | $ | 372 |  |  | $ | 380 |
Futures contracts are used when appropriate to manage duration targets. As of December 31, 2020 and 2019, the U.S. plan held directly Treasury futures contracts with a total notional value of approximately $396 and $345, respectively, and an insignificant fair value. As of December 31, 2020 and 2019, the United Kingdom plan held through a pooled fund future contracts with a total notional value of approximately $454 and $346, and an insignificant fair value. During 2020 and 2019, the plan assets did not include a significant amount of Kimberly-Clark common stock.
| Fair Value Measurements at December 31, 2019
| Total Plan Assets |  | Assets at Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Assets at Significant Observable Inputs (Level 2) |  | Assets at Significant Unobservable Inputs (Level 3)
Cash and Cash Equivalents |  |  |  |  |  |  |
Held directly | $ | 44 |  |  | $ | 44 |  |  | $ | — |  |  | $ | — |
Held through mutual and pooled funds measured at net asset value | 31 |  |  | — |  |  | — |  |  | — |
Fixed Income |  |  |  |  |  |  |
Held directly |  |  |  |  |  |  |
U.S. government and municipals | 161 |  |  | 147 |  |  | 14 |  |  | — |
U.S. corporate debt | 221 |  |  | — |  |  | 221 |  |  | — |
International bonds | 9 |  |  | — |  |  | 9 |  |  | — |
Held through mutual and pooled funds measured at net asset value |  |  |  |  |  |  |
U.S. government and municipals | 153 |  |  | — |  |  | — |  |  | — |
U.S. corporate debt | 662 |  |  | — |  |  | — |  |  | — |
International bonds | 937 |  |  | — |  |  | — |  |  | — |
Equity |  |  |  |  |  |  |
Held directly |  |  |  |  |  |  |
U.S. equity | 39 |  |  | 39 |  |  | — |  |  | — |
International equity | 32 |  |  | 32 |  |  | — |  |  | — |
Held through mutual and pooled funds measured at net asset value |  |  |  |  |  |  |
Non-U.S. equity | 86 |  |  | — |  |  | — |  |  | — |
Global equity | 572 |  |  | — |  |  | — |  |  | — |
Insurance Contracts | 372 |  |  | — |  |  | — |  |  | 372 |
Other | (16) |  |  | (4) |  |  | — |  |  | — |
Total Plan Assets | $ | 3,303 |  |  | $ | 258 |  |  | $ | 244 |  |  | $ | 372 |
Inputs and valuation techniques used to measure the fair value of plan assets vary according to the type of security being valued. Substantially all of the equity securities held directly by the plans are actively traded and fair values are determined based on quoted market prices. Fair values of U.S. government securities are determined based on trading activity in the marketplace. Fair values of U.S. corporate debt, U.S. municipals and international bonds are typically determined by reference to the values of similar securities traded in the marketplace and current interest rate levels. Multiple pricing services are typically employed to assist in determining these valuations. Fair values of equity securities and fixed income securities held through units of pooled funds are based on net asset value of the units of the pooled fund determined by the fund manager. Pooled funds are similar in nature to retail mutual funds, but are typically more efficient for institutional investors. The fair value of pooled funds is determined by the value of the underlying assets held by the fund and the units outstanding. Equity securities held directly by the pension trusts and those held through units in pooled funds are monitored as to issuer and industry. Except for U.S. Treasuries, concentrations of fixed income securities are similarly monitored for concentrations by issuer and industry. As of December 31, 2020, there were no significant concentrations of equity or debt securities in any single issuer or industry. No level 3 transfers (in or out) were made in 2020 or 2019. Fair values of insurance contracts are based on an evaluation of various factors, including purchase price. We expect to contribute approximately $50 to our defined benefit pension plans in 2021. Over the next ten years, we expect that the following gross benefit payments will occur:
| Pension Benefits |  | Other Benefits
2021 | $ | 207 |  |  | $ | 56 |
2022 | 227 |  |  | 58 |
2023 | 220 |  |  | 58 |
2024 | 224 |  |  | 58 |
2025 | 220 |  |  | 55 |
2026-2030 | 1,085 |  |  | 247 |
Defined Contribution Pension Plans Our 401(k) profit sharing plan and supplemental plan provide for a matching contribution of a U.S. employee's contributions and accruals, subject to predetermined limits, as well as a discretionary profit sharing contribution, in which contributions will be based on our profit performance. We also have defined contribution pension plans for certain employees outside the U.S. Costs charged to expense for our defined contribution pension plans were $141 in 2020, $131 in 2019, and $120 in 2018. Approximately 25 percent of these costs were for plans outside the U.S.

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