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,


	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)

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.


	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


	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.


	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	%	—		—		—

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.


	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.

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.