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Pension, Postretirement and Other Benefits | 12 Months Ended
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Sep. 30, 2016
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] |
Pension, Postretirement and Other Benefits | Note 10—Pension, Postretirement and Other Benefits The Company sponsors various qualified and non-qualified defined benefit pension and other postretirement benefit plans that provide for retirement and medical benefits for substantially all employees residing in the United States. The Company also sponsors other pension benefit plans that provide benefits for internationally-based employees at certain non-U.S. locations. As a result of the acquisition of Visa Europe, the Company assumed the obligations related to Visa Europe's defined benefit plan, primarily consisting of the U.K. funded and unfunded pension plans. Disclosures presented below include the U.S. pension plans and the non-U.S. plans, comprising only the Visa Europe plans. Disclosures relating to other non-U.S. pension benefit plans are not included as they are immaterial, individually and in aggregate. The Company uses a September 30 measurement date for its pension and other postretirement benefit plans. Defined benefit pension plans. The U.S. pension benefits under the defined benefit pension plan are earned based on a cash balance formula. An employee’s cash balance account is credited with an amount equal to 6% of eligible compensation plus interest based on 30-year Treasury securities. In October 2015, the Company's board of directors approved an amendment of the U.S. qualified defined benefit pension plan such that the Company discontinued employer provided credits after December 31, 2015. Plan participants continue to earn interest credits on existing balances at the time of the freeze. As a result, a curtailment gain totaling $8 million was recognized in fiscal 2016 as part of the Company's net periodic benefit cost. The funding policy for the U.S. pension benefits is to contribute annually no less than the minimum required contribution under ERISA. Under the Visa Europe U.K. pension plans, presented below under "non-U.S. plans", retirement benefits are provided based on the participants' final pensionable pay and are currently closed to new entrants. However, future benefits continue to accrue for active participants. The funding policy is to contribute in accordance with the appropriate funding requirements agreed with the trustees of the U.K. pension plans. Additional amounts may be agreed with the U.K. pension plan trustees. Postretirement benefits plan. The postretirement benefits plan provides medical benefits for retirees and dependents who meet minimum age and service requirements. Benefits are provided from retirement date until age 65. Retirees must contribute on a monthly basis for the same coverage that is generally available to active employees and their dependents. The Company’s contributions are funded on a current basis. Summary of Plan Activities Change in Benefit Obligation:
| U.S. Plans |  | Non-U.S. Plans
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits
| September 30, |  | September 30, |  | September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016
| (in millions)
Benefit obligation—beginning of fiscal year | $ | 1,005 |  |  | $ | 983 |  |  | $ | 18 |  |  | $ | 20 |  |  | $ | — |
Visa Europe acquisition | — |  |  | — |  |  | — |  |  | — |  |  | 381 |
Service cost | 13 |  |  | 47 |  |  | — |  |  | — |  |  | 1 |
Interest cost | 40 |  |  | 40 |  |  | 1 |  |  | 1 |  |  | 3 |
Actuarial loss (gain) | 86 |  |  | 40 |  |  | (2 | ) |  | — |  |  | 86 |
Benefit payments | (64 | ) |  | (105 | ) |  | (3 | ) |  | (3 | ) |  | (1 | )
Plan amendment | (8 | ) |  | — |  |  | — |  |  | — |  |  | — |
Foreign currency exchange rate changes | — |  |  | — |  |  | — |  |  | — |  |  | 4 |
Benefit obligation—end of fiscal year | $ | 1,072 |  |  | $ | 1,005 |  |  | $ | 14 |  |  | $ | 18 |  |  | $ | 474 |
Accumulated benefit obligation | $ | 1,072 |  |  | $ | 994 |  |  | NA |  |  | NA |  |  | $ | 474 |
Change in Plan Assets: |  |  |  |  |  |  |  |  |
Fair value of plan assets—beginning of fiscal year | $ | 1,022 |  |  | $ | 1,117 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Visa Europe acquisition | — |  |  | — |  |  | — |  |  | — |  |  | 287 |
Actual return on plan assets | 118 |  |  | (6 | ) |  | — |  |  | — |  |  | 25 |
Company contribution | 1 |  |  | 16 |  |  | 3 |  |  | 3 |  |  | 102 |
Benefit payments | (64 | ) |  | (105 | ) |  | (3 | ) |  | (3 | ) |  | (1 | )
Foreign currency exchange rate changes | — |  |  | — |  |  | — |  |  | — |  |  | 2 |
Fair value of plan assets—end of fiscal year | $ | 1,077 |  |  | $ | 1,022 |  |  | $ | — |  |  | $ | — |  |  | $ | 415 |
Funded status at end of fiscal year | $ | 5 |  |  | $ | 17 |  |  | $ | (14 | ) |  | $ | (18 | ) |  | $ | (59 | )
Recognized in Consolidated Balance Sheets: |  |  |  |  |  |  |  |  |
Non-current asset | $ | 22 |  |  | $ | 36 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current liability | (9 | ) |  | (9 | ) |  | (3 | ) |  | (3 | ) |  | (6 | )
Non-current liability | (8 | ) |  | (10 | ) |  | (11 | ) |  | (15 | ) |  | (53 | )
Funded status at end of fiscal year | $ | 5 |  |  | $ | 17 |  |  | $ | (14 | ) |  | $ | (18 | ) |  | $ | (59 | )
Amounts recognized in accumulated other comprehensive income before tax:
| U.S. Plans |  | Non-U.S. Plans
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits
September 30, |  | September 30, |  | September 30
| 2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016
| (in millions)
Net actuarial loss (gain) | $ | 241 |  |  | $ | 232 |  |  | $ | (5 | ) |  | $ | (5 | ) |  | $ | 66 |
Prior service credit | — |  |  | (9 | ) |  | (2 | ) |  | (5 | ) |  | — |
Total | $ | 241 |  |  | $ | 223 |  |  | $ | (7 | ) |  | $ | (10 | ) |  | $ | 66 |
Amounts from accumulated other comprehensive income to be amortized into net periodic benefit cost in fiscal 2017:
| U.S. Plans |  | Non-U.S. Plans
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits
| (in millions)
Actuarial loss (gain) | $ | 15 |  |  | $ | (1 | ) |  | $ | 2 |
Prior service credit | — |  |  | (2 | ) |  | — |
Total | $ | 15 |  |  | $ | (3 | ) |  | $ | 2 |
Benefit obligations in excess of plan assets related to the Company's U.S. non-qualified plan and the non-U.S. pension plans:
| U.S. Plans |  | Non-U.S. Plans
September 30, |  | September 30,
| 2016 |  | 2015 |  | 2016
| (in millions)
Accumulated benefit obligation in excess of plan assets |  |  |  |  |
Accumulated benefit obligation—end of year | $ | (16 | ) |  | $ | (19 | ) |  | $ | (474 | )
Fair value of plan assets—end of year | $ | — |  |  | $ | — |  |  | $ | 415 |
Projected benefit obligation in excess of plan assets |  |  |  |  |
Benefit obligation—end of year | $ | (16 | ) |  | $ | (19 | ) |  | $ | 474 |
Fair value of plan assets—end of year | $ | — |  |  | $ | — |  |  | $ | 415 |
Net periodic pension and other postretirement plan cost:
| U.S. Plans |  | Non-U.S. Plans(1)
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits
| Fiscal
| 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014 |  | 2016
| (in millions)
Service cost | $ | 13 |  |  | $ | 47 |  |  | $ | 46 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |
Interest cost | 40 |  |  | 40 |  |  | 42 |  |  | 1 |  |  | 1 |  |  | 1 |  |  | 3 |
Expected return on assets | (69 | ) |  | (72 | ) |  | (68 | ) |  | — |  |  | — |  |  | — |  |  | (4 | )
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit | (1 | ) |  | (7 | ) |  | (8 | ) |  | (3 | ) |  | (3 | ) |  | (3 | ) |  | — |
Actuarial loss (gain) | 7 |  |  | 1 |  |  | 1 |  |  | (2 | ) |  | (2 | ) |  | (1 | ) |  | — |
Net benefit cost | $ | (10 | ) |  | $ | 9 |  |  | $ | 13 |  |  | $ | (4 | ) |  | $ | (4 | ) |  | $ | (3 | ) |  | $ | — |
Curtailment gain | (8 | ) |  | — |  |  | (3 | ) |  | — |  |  | — |  |  | — |  |  | — |
Settlement loss | 13 |  |  | 7 |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |
Total net periodic benefit cost | $ | (5 | ) |  | $ | 16 |  |  | $ | 13 |  |  | $ | (4 | ) |  | $ | (4 | ) |  | $ | (3 | ) |  | $ | — |
(1) Represents Visa Europe's U.K. pension plans' net pension benefit cost recognized from the Closing through September 30, 2016. Other changes in plan assets and benefit obligations recognized in other comprehensive income:
| U.S. Plans |  | Non-U.S. Plans
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits
2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016
| (in millions)
Current year actuarial loss (gain) | $ | 30 |  |  | $ | 119 |  |  | $ | (2 | ) |  | $ | — |  |  | $ | 66 |
Amortization of actuarial (loss) gain | (20 | ) |  | (8 | ) |  | 2 |  |  | 2 |  |  | — |
Current year prior service credit | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of prior service credit | 9 |  |  | 7 |  |  | 3 |  |  | 3 |  |  | — |
Total recognized in other comprehensive income | $ | 19 |  |  | $ | 118 |  |  | $ | 3 |  |  | $ | 5 |  |  | $ | 66 |
Total recognized in net periodic benefit cost and other comprehensive income | $ | 14 |  |  | $ | 134 |  |  | $ | (1 | ) |  | $ | 1 |  |  | $ | 66 |
Weighted Average Actuarial Assumptions:
| U.S. Plans |  | Non-U.S. Plans
| Fiscal
| 2016 |  | 2015 |  | 2014 |  | 2016
Discount rate for benefit obligation:(1) |  |  |  |  |  |  |
Pension | 3.62 | % |  | 4.33 | % |  | 4.27 | % |  | 2.40 | %
Postretirement | 1.91 | % |  | 2.43 | % |  | 2.59 | % |  | NA |
Discount rate for net periodic benefit cost: |  |  |  |  |  |  |
Pension | 4.33 | % |  | 4.27 | % |  | 4.81 | % |  | 3.10 | %
Postretirement | 2.43 | % |  | 2.59 | % |  | 2.76 | % |  | NA |
Expected long-term rate of return on plan assets(2) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  | 3.92 | %
Rate of increase in compensation levels for:(3) |  |  |  |  |  |  |
Benefit obligation | NA |  |  | 4.00 | % |  | 4.00 | % |  | 3.20 | %
Net periodic benefit cost | NA |  |  | 4.00 | % |  | 4.50 | % |  | 3.00 | %
(1) | Represents a single weighted-average discount rate derived based on a cash flow matching analysis, with the projected benefit payments matching spot rates from a yield curve developed from high-quality corporate bonds.
(2) | Primarily based on the targeted allocation, and evaluated for reasonableness by considering such factors as: (i) actual return on plan assets; (ii) historical rates of return on various asset classes in the portfolio; (iii) projections of returns on various asset classes; and (iv) current and prospective capital market conditions and economic forecasts.
(3) | This assumption is not applicable for to the U.S. plans in fiscal 2016 due to the amendment of the U.S. qualified defined benefit pension plan in October 2015, which discontinued the employer provided credits effective after December 31, 2015.
The assumed annual rate of future increases in health benefits for the other postretirement benefits plan is 8% for fiscal 2017. The rate is assumed to decrease to 5% by 2021 and remain at that level thereafter. These trend rates reflect management’s expectations of future rates. Increasing or decreasing the healthcare cost trend by 1% would change the postretirement plan benefit obligation by less than $1 million. Pension Plan Assets Pension plan assets are managed with a long-term perspective to ensure that there is an adequate level of assets to support benefit payments to participants over the life of the pension plan. Pension plan assets are managed by external investment managers. Investment manager performance is measured against benchmarks for each asset class on a quarterly basis. An independent consultant assists management with investment manager selections and performance evaluations. Pension plan assets are broadly diversified to maintain a prudent level of risk and to provide adequate liquidity for benefit payments. The Company generally evaluates and rebalances the pension plan assets, as appropriate, to ensure that allocations are consistent with target allocation ranges. The weighted average targeted allocation for U.S. pension plan assets is as follows: equity securities of 50% to 80%, fixed income securities of 25% to 35% and other, primarily consisting of cash equivalents to meet near term expected benefit payments and expenses, of up to 7%. At September 30, 2016, U.S. pension plan asset allocations for these categories were 62%, 34% and 4%, respectively, which were within target allocation ranges. The weighted average targeted allocation for non-U.S. pension plans is as follows: equity securities of 40%, fixed income securities of 20% and other of 40%, consisting of cash, multi-asset funds, and property. At September 30, 2016, non-U.S. pension plan asset allocations for these categories were 28%, 22% and 50%, respectively. The actual allocated percentage to other category exceeding the target is attributed to the $102 million cash contribution made in September 2016. The following table sets forth by level, within the fair value hierarchy, the pension plan’s investments at fair value as of September 30, 2016 and 2015, including the impact of transactions that were not settled at the end of September:
| U.S. Plans
| Fair Value Measurements at September 30,
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| 2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016 |  | 2015
| (in millions)
Cash equivalents | $ | 39 |  |  | $ | 11 |  |  |  |  |  |  |  |  |  |  | $ | 39 |  |  | $ | 11 |
Corporate debt securities |  |  |  |  | $ | 185 |  |  | $ | 169 |  |  |  |  |  |  | 185 |  |  | 169 |
U.S. government-sponsored debt securities |  |  |  |  | 30 |  |  | 66 |  |  |  |  |  |  | 30 |  |  | 66 |
U.S. Treasury securities | 100 |  |  | 74 |  |  |  |  |  |  |  |  |  |  | 100 |  |  | 74 |
Asset-backed securities |  |  |  |  |  |  |  |  | $ | 51 |  |  | $ | 31 |  |  | 51 |  |  | 31 |
Equity securities | 672 |  |  | 671 |  |  |  |  |  |  |  |  |  |  | 672 |  |  | 671 |
Total | $ | 811 |  |  | $ | 756 |  |  | $ | 215 |  |  | $ | 235 |  |  | $ | 51 |  |  | $ | 31 |  |  | $ | 1,077 |  |  | $ | 1,022 |
| Non-U.S. Plans
| Fair Value Measurements at September 30, 2016
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (in millions)
Cash equivalents | $ | 105 |  |  |  |  |  |  | $ | 105 |
Corporate debt securities |  |  | $ | 39 |  |  |  |  | 39 |
U.K. Treasury securities | 52 |  |  |  |  |  |  | 52 |
Asset-backed securities |  |  |  |  | $ | 29 |  |  | 29 |
Equity securities | 116 |  |  |  |  |  |  | 116 |
Multi-asset securities (1) |  |  | 74 |  |  |  |  | 74 |
Total | $ | 273 |  |  | $ | 113 |  |  | $ | 29 |  |  | $ | 415 |
(1) | Multi-asset securities represents pension plan assets that are invested in funds comprised of broad ranges of assets.
Level 1 assets. Cash equivalents (money market funds, time deposits and treasury bills), U.S. and U.K. Treasury securities and equity securities are classified as Level 1 within the fair value hierarchy, as fair value is based on quoted prices in active markets. Level 2 assets. The fair values of U.S. government-sponsored, corporate debt and multi-asset securities are based on quoted prices in active markets for similar assets as provided by third-party pricing vendors. This pricing data is reviewed internally for reasonableness through comparisons with benchmark quotes from independent third-party sources. Based on this review, the valuation is confirmed or revised accordingly. Level 3 assets. Asset-backed securities are bonds that are backed by various types of assets and primarily consist of mortgage-backed securities. Asset-backed securities are classified as Level 3 due to a lack of observable inputs in measuring fair value. There were no transfers between Level 1 and Level 2 assets during fiscal 2016 or 2015. A separate roll-forward of Level 3 plan assets measured at fair value is not presented because activities during fiscal 2016 and 2015 were immaterial. Cash Flows
| U.S. Plans |  | Non-U.S. Plans
| Pension Benefits |  | Other Postretirement Benefits |  | Pension Benefits
Actual employer contributions | (in millions)
2016 | $ | 1 |  |  | $ | 3 |  |  | $ | 102 |
2015 | $ | 16 |  |  | $ | 3 |  |  | $ | — |
Expected employer contributions |  |  |  |  |
2017 | $ | 9 |  |  | $ | 3 |  |  | $ | 6 |
Expected benefit payments |  |  |  |  |
2017 | $ | 165 |  |  | $ | 3 |  |  | $ | 4 |
2018 | $ | 88 |  |  | $ | 3 |  |  | $ | 4 |
2019 | $ | 85 |  |  | $ | 2 |  |  | $ | 5 |
2020 | $ | 84 |  |  | $ | 2 |  |  | $ | 5 |
2021 | $ | 81 |  |  | $ | 2 |  |  | $ | 5 |
2022-2026 | $ | 350 |  |  | $ | 2 |  |  | $ | 27 |
Other Benefits The Company sponsors a defined contribution plan, or 401(k) plan, that covers substantially all of its employees residing in the United States. Personnel costs included $55 million, $49 million and $46 million in fiscal 2016, 2015 and 2014, respectively, for expenses attributable to the Company’s employees under the 401(k) plan. The Company’s contributions to this 401(k) plan are funded on a current basis, and the related expenses are recognized in the period that the payroll expenses are incurred.

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