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PENSION AND OTHER POSTRETIREMENT BENEFITS | 12 Months Ended
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Dec. 31, 2020
Retirement Benefits, Description [Abstract] |
Pension and Other Postretirement Benefits | The Company sponsors a number of both funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of our U.S. employees are provided through non-contributory, qualified and non-qualified defined benefit plans. All non-union hourly and salaried employees joining Honeywell for the first time after December 31, 2012, are not eligible to participate in Honeywell’s U.S. defined benefit pension plans. We also sponsor defined benefit pension plans which cover non-U.S. employees who are not U.S. citizens, in certain jurisdictions, principally the UK, Netherlands, Germany, and Canada. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate. The Company also sponsors postretirement benefit plans that provide health care benefits and life insurance coverage mainly to U.S. eligible retirees. None of Honeywell’s U.S. employees are eligible for a retiree medical subsidy from the Company. In addition, the vast majority of Honeywell’s U.S. retirees either have no Company subsidy or have a fixed-dollar subsidy amount. This significantly limits our exposure to the impact of future health care cost increases. The retiree medical and life insurance plans are not funded. Claims and expenses are paid from our cash flows from operations. The following tables summarize the balance sheet impact, including the benefit obligations, assets and funded status associated with the Company's significant pension and other postretirement benefit plans.
| Pension Benefits
U.S. Plans |  | Non-U.S. Plans
2020 |  | 2019 |  | 2020 |  | 2019
Change in benefit obligation: |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 17,283 |  |  | $ | 16,141 |  |  | $ | 6,897 |  |  | $ | 6,182 |
Service cost | 99 |  |  | 82 |  |  | 23 |  |  | 22 |
Interest cost | 461 |  |  | 613 |  |  | 106 |  |  | 142 |
Plan amendments | — |  |  | — |  |  | 2 |  |  | — |
Actuarial (gains) losses(1) | 1,331 |  |  | 2,064 |  |  | 509 |  |  | 708 |
Benefits paid | (1,100) |  |  | (1,111) |  |  | (246) |  |  | (269) |
Settlements and curtailments | (21) |  |  | (507) |  |  | — |  |  | — |
Foreign currency translation | — |  |  | — |  |  | 291 |  |  | 107 |
Other | 1 |  |  | 1 |  |  | 88 |  |  | 5 |
Benefit obligation at end of year | 18,054 |  |  | 17,283 |  |  | 7,670 |  |  | 6,897 |
Change in plan assets: |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | 18,995 |  |  | 17,109 |  |  | 7,307 |  |  | 6,481 |
Actual return on plan assets | 2,475 |  |  | 3,458 |  |  | 918 |  |  | 863 |
Company contributions | 46 |  |  | 45 |  |  | 116 |  |  | 62 |
Benefits paid | (1,100) |  |  | (1,111) |  |  | (246) |  |  | (269) |
Settlements and curtailments | (21) |  |  | (507) |  |  | — |  |  | — |
Foreign currency translation | — |  |  | — |  |  | 253 |  |  | 165 |
Other | 1 |  |  | 1 |  |  | 102 |  |  | 5 |
Fair value of plan assets at end of year | 20,396 |  |  | 18,995 |  |  | 8,450 |  |  | 7,307 |
Funded status of plans | $ | 2,342 |  |  | $ | 1,712 |  |  | $ | 780 |  |  | $ | 410 |
Amounts recognized in Consolidated Balance Sheet consist of: |  |  |  |  |  |  |
Prepaid pension benefit cost(2) | $ | 2,695 |  |  | $ | 2,069 |  |  | $ | 1,688 |  |  | $ | 1,196 |
Accrued pension liabilities—current(3) | (29) |  |  | (32) |  |  | (14) |  |  | (13) |
Accrued pension liabilities—noncurrent(4) | (324) |  |  | (325) |  |  | (894) |  |  | (773) |
Net amount recognized | $ | 2,342 |  |  | $ | 1,712 |  |  | $ | 780 |  |  | $ | 410 |
(1)Actuarial losses incurred in 2020 related to our U.S. and non-U.S. plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2020 compared to December 31, 2019. Actuarial losses incurred in 2019 related to our U.S. and non-U.S. plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2019 compared to December 31, 2018. (2)Included in Other assets on the Consolidated Balance Sheet (3)Included in Accrued liabilities on the Consolidated Balance Sheet (4)Included in Other liabilities on the Consolidated Balance Sheet
| Other Postretirement Benefits
2020 |  | 2019
Change in benefit obligation: |  |  |
Benefit obligation at beginning of year | $ | 325 |  |  | $ | 364 |
Service cost | — |  |  | — |
Interest cost | 8 |  |  | 14 |
Plan amendments | (65) |  |  | (2) |
Actuarial (gains) losses | (8) |  |  | (16) |
Benefits paid | (31) |  |  | (35) |
Benefit obligation at end of year | 229 |  |  | 325 |
Change in plan assets: |  |  |
Fair value of plan assets at beginning of year | — |  |  | — |
Actual return on plan assets | — |  |  | — |
Company contributions | — |  |  | — |
Benefits paid | — |  |  | — |
Fair value of plan assets at end of year | — |  |  | — |
Funded status of plans | $ | (229) |  |  | $ | (325) |
Amounts recognized in Consolidated Balance Sheet consist of: |  |  |
Accrued liabilities | $ | (27) |  |  | $ | (40) |
Postretirement benefit obligations other than pensions(1) | (202) |  |  | (285) |
Net amount recognized | $ | (229) |  |  | $ | (325) |
(1)Excludes non-U.S. plan of $40 million and $41 million as of December 31, 2020 and 2019. Amounts recognized in Accumulated other comprehensive (income) loss associated with the Company's significant pension and other postretirement benefit plans at December 31, 2020 and 2019 are as follows:
| Pension Benefits
U.S. Plans |  | Non-U.S. Plans
2020 |  | 2019 |  | 2020 |  | 2019
Prior service (credit) cost | $ | (134) |  |  | $ | (176) |  |  | $ | 23 |  |  | $ | 21 |
Net actuarial (gain) loss | 505 |  |  | 544 |  |  | 629 |  |  | 701 |
Net amount recognized | $ | 371 |  |  | $ | 368 |  |  | $ | 652 |  |  | $ | 722 |
| Other Postretirement Benefits
2020 |  | 2019
Prior service (credit) cost | $ | (165) |  |  | $ | (166) |
Net actuarial (gain) loss | (28) |  |  | (20) |
Net amount recognized | $ | (193) |  |  | $ | (186) |
The components of net periodic benefit (income) cost and other amounts recognized in Other comprehensive (income) loss for the Company's significant pension and other postretirement benefit plans include the following components:
Net Periodic Benefit Cost | Pension Benefits
U.S. Plans |  | Non-U.S. Plans
2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Service cost | $ | 99 |  |  | $ | 82 |  |  | $ | 140 |  |  | $ | 23 |  |  | $ | 22 |  |  | $ | 26 |
Interest cost | 461 |  |  | 613 |  |  | 573 |  |  | 106 |  |  | 142 |  |  | 143 |
Expected return on plan assets | (1,135) |  |  | (1,117) |  |  | (1,426) |  |  | (336) |  |  | (331) |  |  | (443) |
Amortization of prior service (credit) cost | (42) |  |  | (42) |  |  | (43) |  |  | — |  |  | — |  |  | (1) |
Recognition of actuarial losses | 26 |  |  | 35 |  |  | — |  |  | 18 |  |  | 88 |  |  | 37 |
Settlements and curtailments | 4 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | (3) |
Net periodic benefit (income) cost | $ | (587) |  |  | $ | (425) |  |  | $ | (756) |  |  | $ | (189) |  |  | $ | (79) |  |  | $ | (241) |
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss | U.S. Plans |  | Non-U.S. Plans
2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Actuarial (gains) losses | $ | (9) |  |  | $ | (277) |  |  | $ | 619 |  |  | $ | (73) |  |  | $ | 176 |  |  | $ | 250 |
Prior service (credit) cost | — |  |  | — |  |  | — |  |  | 2 |  |  | — |  |  | 30 |
Prior service credit recognized during year | 42 |  |  | 42 |  |  | 43 |  |  | — |  |  | — |  |  | 4 |
Actuarial losses recognized during year | (30) |  |  | (39) |  |  | — |  |  | (18) |  |  | (88) |  |  | (37) |
Foreign currency translation | — |  |  | — |  |  | — |  |  | 19 |  |  | 14 |  |  | (34) |
Total recognized in other comprehensive (income) loss | $ | 3 |  |  | $ | (274) |  |  | $ | 662 |  |  | $ | (70) |  |  | $ | 102 |  |  | $ | 213 |
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss | $ | (584) |  |  | $ | (699) |  |  | $ | (94) |  |  | $ | (259) |  |  | $ | 23 |  |  | $ | (28) |
Net Periodic Benefit Cost | Other Postretirement Benefits
Years Ended December 31,
2020 |  | 2019 |  | 2018
Service cost | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost | 8 |  |  | 14 |  |  | 15 |
Amortization of prior service (credit) cost | (66) |  |  | (62) |  |  | (52) |
Recognition of actuarial losses | — |  |  | — |  |  | 3 |
Net periodic benefit (income) cost | $ | (58) |  |  | $ | (48) |  |  | $ | (34) |
Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss | Years Ended December 31,
2020 |  | 2019 |  | 2018
Actuarial (gains) losses | $ | (8) |  |  | $ | (16) |  |  | $ | (110) |
Prior service (credit) cost | (65) |  |  | (2) |  |  | (34) |
Prior service credit recognized during year | 66 |  |  | 62 |  |  | 52 |
Actuarial losses recognized during year | — |  |  | — |  |  | (3) |
Total recognized in other comprehensive (income) loss | $ | (7) |  |  | $ | 44 |  |  | $ | (95) |
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss | $ | (65) |  |  | $ | (4) |  |  | $ | (129) |
Major actuarial assumptions used in determining the benefit obligations and net periodic benefit (income) cost for our significant benefit plans are presented in the following table as weighted averages.
| Pension Benefits
U.S. Plans |  | Non-U.S. Plans
2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Actuarial assumptions used to determine benefit obligations as of December 31: |  |  |  |  |  |  |  |  |  |  |
Discount rate | 2.50 | % |  | 3.22 | % |  | 4.35 | % |  | 1.23 | % |  | 1.81 | % |  | 2.63 | %
Expected annual rate of compensation increase | 3.25 | % |  | 3.25 | % |  | 3.25 | % |  | 2.43 | % |  | 2.47 | % |  | 2.46 | %
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31: |  |  |  |  |  |  |  |  |  |  |
Discount rate—benefit obligation | 3.22 | % |  | 4.35 | % |  | 3.68 | % |  | 1.81 | % |  | 2.63 | % |  | 2.36 | %
Discount rate—service cost | 3.33 | % |  | 4.47 | % |  | 3.77 | % |  | 1.48 | % |  | 2.26 | % |  | 2.20 | %
Discount rate—interest cost | 2.76 | % |  | 3.94 | % |  | 3.27 | % |  | 1.56 | % |  | 2.34 | % |  | 2.08 | %
Expected rate of return on plan assets | 6.15 | % |  | 6.75 | % |  | 7.75 | % |  | 4.66 | % |  | 5.14 | % |  | 6.23 | %
Expected annual rate of compensation increase | 3.25 | % |  | 3.25 | % |  | 4.50 | % |  | 2.47 | % |  | 2.46 | % |  | 2.49 | %
| Other Postretirement Benefits
2020 |  | 2019 |  | 2018
Actuarial assumptions used to determine benefit obligations as of December 31: |  |  |  |  |
Discount rate | 2.20 | % |  | 3.03 | % |  | 4.07 | %
Actuarial assumptions used to determine net periodic benefit cost for years ended December 31: |  |  |  |  |
Discount rate(1) | 2.36 | % |  | 4.07 | % |  | 3.39 | %
(1) Discount rate was 3.03% for January 1, 2020 through September 30, 2020. The rate was changed to 2.36% for the remainder of 2020 due to a Plan remeasurement as of October 1, 2020. The discount rate for the Company's U.S. pension and other postretirement benefits plans reflects the current rate at which the associated liabilities could be settled at the measurement date of December 31. To determine discount rates for our U.S. pension and other postretirement benefit plans, we use a modeling process that involves matching the expected cash outflows of our benefit plans to a yield curve constructed from a portfolio of high quality, fixed-income debt instruments. We use the single weighted-average yield of this hypothetical portfolio as a discount rate benchmark. We utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic pension benefit (income) for our significant pension plans. This approach applies the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates. For our U.S. pension plans, the single weighted average spot rates used to determine service and interest costs for 2021 are 2.67% and 1.76%. The discount rate used to determine the other postretirement benefit obligation is lower principally due to a shorter expected duration of other postretirement plan obligations as compared to pension plan obligations. The Company plans to use an expected rate of return on U.S. plan assets of 6.15% for 2021, matching the 6.15% assumption used for 2020. Our asset return assumption is based on historical plan asset returns over varying long-term periods combined with current market conditions and broad asset mix considerations with a focus on long-term trends rather than short-term market conditions. We review the expected rate of return on an annual basis and revise it as appropriate. For non-U.S. benefit plans actuarial assumptions reflect economic and market factors relevant to each country. PENSION BENEFITS The following amounts relate to the Company's significant pension plans with accumulated benefit obligations exceeding the fair value of plan assets:
| December 31,
U.S. Plans |  | Non-U.S. Plans
2020 |  | 2019 |  | 2020 |  | 2019
Projected benefit obligation | $ | 353 |  |  | $ | 357 |  |  | $ | 2,116 |  |  | $ | 1,018 |
Accumulated benefit obligation | $ | 341 |  |  | $ | 347 |  |  | $ | 2,042 |  |  | $ | 973 |
Fair value of plan assets | $ | — |  |  | $ | — |  |  | $ | 1,208 |  |  | $ | 233 |
The accumulated benefit obligation for the Company's U.S. defined benefit pension plans was $17.9 billion and $17.2 billion and for our Non-U.S. defined benefit pension plans was $7.6 billion and $6.8 billion at December 31, 2020 and 2019. The Company's asset investment strategy for our U.S. pension plans focuses on maintaining a diversified portfolio using various asset classes in order to achieve our long-term investment objectives on a risk adjusted basis. During 2020, we continued to employ a de-risking strategy which increases the matching characteristics of our assets relative to our obligation. Our long-term target allocations are as follows: 55%-70% fixed income securities and cash, 25%-40% equity securities, 5%-10% real estate investments, and 10%-20% other types of investments. Equity securities include publicly-traded stock of companies located both inside and outside the United States. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. Treasuries. Real estate investments include direct investments in commercial properties and investments in real estate funds. Other types of investments include investments in private equity and hedge funds that follow several different strategies. We review our assets on a regular basis to ensure that we are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations. The Company's non-U.S. pension assets are typically managed by decentralized fiduciary committees with the Honeywell Corporate Investments group providing funding and investment guidance. Our non-U.S. investment policies are different for each country as local regulations, funding requirements, and financial and tax considerations are part of the funding and investment allocation process in each country. In accordance with ASU 2015-07, “Fair Value Measurement (Topic 820)”, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the following tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets. The fair values of both the Company's U.S. and non-U.S. pension plans assets by asset category are as follows:
| U.S. Plans
December 31, 2020
Total |  | Level 1 |  | Level 2 |  | Level 3
Equities: |  |  |  |  |  |  |
Honeywell common stock | $ | 3,319 |  |  | $ | 3,319 |  |  | $ | — |  |  | $ | — |
U.S. equities | — |  |  | — |  |  | — |  |  | — |
Fixed income: |  |  |  |  |  |  |
Short term investments | 1,314 |  |  | 1,314 |  |  | — |  |  | — |
Government securities | 1,520 |  |  | — |  |  | 1,520 |  |  | — |
Corporate bonds | 10,190 |  |  | — |  |  | 10,190 |  |  | — |
Mortgage/Asset-backed securities | 982 |  |  | — |  |  | 982 |  |  | — |
Insurance contracts | 7 |  |  | — |  |  | 7 |  |  | — |
Direct investments: |  |  |  |  |  |  |
Direct private investments | 1,220 |  |  | — |  |  | — |  |  | 1,220 |
Real estate properties | 651 |  |  | — |  |  | — |  |  | 651 |
Total | 19,203 |  |  | $ | 4,633 |  |  | $ | 12,699 |  |  | $ | 1,871 |
Investments measured at NAV: |  |  |  |  |  |  |
Private funds | 1,105 |  |  |  |  |  |  |
Real estate funds | 26 |  |  |  |  |  |  |
Commingled Funds | 62 |  |  |  |  |  |  |
Total assets at fair value | $ | 20,396 |  |  |  |  |  |  |
| U.S. Plans
December 31, 2019
Total |  | Level 1 |  | Level 2 |  | Level 3
Equities: |  |  |  |  |  |  |
Honeywell common stock | $ | 2,857 |  |  | $ | 2,857 |  |  | $ | — |  |  | $ | — |
U.S. equities | 1,227 |  |  | 1,227 |  |  | — |  |  | — |
Fixed income: |  |  |  |  |  |  |
Short term investments | 1,395 |  |  | 1,395 |  |  | — |  |  | — |
Government securities | 1,146 |  |  | — |  |  | 1,146 |  |  | — |
Corporate bonds | 8,603 |  |  | — |  |  | 8,603 |  |  | — |
Mortgage/Asset-backed securities | 1,023 |  |  | — |  |  | 1,023 |  |  | — |
Insurance contracts | 8 |  |  | — |  |  | 8 |  |  | — |
Direct investments: |  |  |  |  |  |  |
Direct private investments | 950 |  |  | — |  |  | — |  |  | 950 |
Real estate properties | 619 |  |  | — |  |  | — |  |  | 619 |
Total | 17,828 |  |  | $ | 5,479 |  |  | $ | 10,780 |  |  | $ | 1,569 |
Investments measured at NAV: |  |  |  |  |  |  |
Private funds | 1,019 |  |  |  |  |  |  |
Real estate funds | 42 |  |  |  |  |  |  |
Commingled funds | 106 |  |  |  |  |  |  |
Total assets at fair value | $ | 18,995 |  |  |  |  |  |  |
| Non-U.S. Plans
December 31, 2020
Total |  | Level 1 |  | Level 2 |  | Level 3
Equities: |  |  |  |  |  |  |
U.S. equities | $ | 207 |  |  | $ | — |  |  | $ | 207 |  |  | $ | — |
Non-U.S. equities | 1,614 |  |  | 66 |  |  | 1,548 |  |  | — |
Fixed income: |  |  |  |  |  |  |
Short-term investments | 596 |  |  | 596 |  |  | — |  |  | — |
Government securities | 3,105 |  |  | — |  |  | 3,105 |  |  | — |
Corporate bonds | 1,649 |  |  | — |  |  | 1,649 |  |  | — |
Mortgage/Asset-backed securities | 93 |  |  | — |  |  | 93 |  |  | — |
Insurance contracts | 142 |  |  | — |  |  | 142 |  |  | — |
Insurance buy-in contracts | 767 |  |  | — |  |  | — |  |  | 767 |
Investments in private funds: |  |  |  |  |  |  |
Private funds | 65 |  |  | — |  |  | 36 |  |  | 29 |
Real estate funds | 147 |  |  | — |  |  | — |  |  | 147 |
Total | 8,385 |  |  | $ | 662 |  |  | $ | 6,780 |  |  | $ | 943 |
Investments measured at NAV: |  |  |  |  |  |  |
Private funds | 18 |  |  |  |  |  |  |
Real estate funds | 47 |  |  |  |  |  |  |
Total assets at fair value | $ | 8,450 |  |  |  |  |  |  |
| Non-U.S. Plans
December 31, 2019
Total |  | Level 1 |  | Level 2 |  | Level 3
Equities: |  |  |  |  |  |  |
U.S. equities | $ | 149 |  |  | $ | — |  |  | $ | 149 |  |  | $ | — |
Non-U.S. equities | 1,384 |  |  | 54 |  |  | 1,330 |  |  | — |
Fixed income: |  |  |  |  |  |  |
Short-term investments | 522 |  |  | 522 |  |  | — |  |  | — |
Government securities | 3,006 |  |  | — |  |  | 3,006 |  |  | — |
Corporate bonds | 1,746 |  |  | — |  |  | 1,746 |  |  | — |
Mortgage/Asset-backed securities | 84 |  |  | — |  |  | 84 |  |  | — |
Insurance contracts | 120 |  |  | — |  |  | 120 |  |  | — |
Insurance buy-in contracts | — |  |  | — |  |  | — |  |  | — |
Investments in private funds: |  |  |  |  |  |  |
Private funds | 69 |  |  | — |  |  | 35 |  |  | 34 |
Real estate funds | 150 |  |  | — |  |  | — |  |  | 150 |
Total | 7,230 |  |  | $ | 576 |  |  | $ | 6,470 |  |  | $ | 184 |
Investments measured at NAV: |  |  |  |  |  |  |
Private funds | 21 |  |  |  |  |  |  |
Real estate funds | 56 |  |  |  |  |  |  |
Total assets at fair value | $ | 7,307 |  |  |  |  |  |  |
The following table summarizes changes in the fair value of Level 3 assets for both U.S. and Non-U.S. plans:
| U.S. Plans |  | Non-U.S. Plans
Direct Private Investments |  | Real Estate Properties |  | Private Funds |  | Real Estate Funds |  | Insurance Buy-in Contracts
Balance at December 31, 2018 | $ | 829 |  |  | $ | 657 |  |  | $ | 34 |  |  | $ | 144 |  |  | $ | — |
Actual return on plan assets: |  |  |  |  |  |  |  |  |
Relating to assets still held at year-end | 15 |  |  | 40 |  |  | — |  |  | 7 |  |  | — |
Relating to assets sold during the year | 89 |  |  | (23) |  |  | — |  |  | 1 |  |  | — |
Purchases | 216 |  |  | 48 |  |  | — |  |  | — |  |  | — |
Sales and settlements | (199) |  |  | (103) |  |  | — |  |  | (2) |  |  | — |
Balance at December 31, 2019 | 950 |  |  | 619 |  |  | 34 |  |  | 150 |  |  | — |
Actual return on plan assets: |  |  |  |  |  |  |  |  |
Relating to assets still held at year-end | 100 |  |  | (4) |  |  | (5) |  |  | (3) |  |  | — |
Relating to assets sold during the year | 53 |  |  | — |  |  | — |  |  | — |  |  | — |
Purchases | 221 |  |  | 59 |  |  | — |  |  | — |  |  | 767 |
Sales and settlements | (104) |  |  | (23) |  |  | — |  |  | — |  |  | — |
Balance at December 31, 2020 | $ | 1,220 |  |  | $ | 651 |  |  | $ | 29 |  |  | $ | 147 |  |  | $ | 767 |
The Company enters into futures contracts to gain exposure to certain markets. Sufficient cash or cash equivalents are held by our pension plans to cover the notional value of the futures contracts. At December 31, 2020 and 2019, our U.S. plans had contracts with notional amounts of $3,673 million and $4,463 million. At December 31, 2020 and 2019, our non-U.S. plans had contracts with notional amounts of $564 million and $479 million. In both our U.S. and non-U.S. pension plans, the notional derivative exposure is related to outstanding equity and fixed income futures contracts. Common stocks, preferred stocks, real estate investment trusts, and short-term investments are valued at the closing price reported in the active market in which the individual securities are traded. Corporate bonds, mortgages/asset-backed securities, and government securities are valued either by using pricing models, bids provided by brokers or dealers, quoted prices of securities with similar characteristics or discounted cash flows and as such include adjustments for certain risks that may not be observable such as credit and liquidity risks. Certain securities are held in collective trust funds which are valued using net asset values provided by the administrators of the funds. Investments in private equity, debt, real estate and hedge funds and direct private investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner. Investments in real estate properties are valued on a quarterly basis using the income approach. Valuation estimates are periodically supplemented by third party appraisals. The insurance buy-in contracts represent policies held by the Honeywell UK Pension Scheme, whereby the cost of providing pension benefits to plan participants is funded by the policies. The cash flows from the policies are intended to match the pension benefits. The fair value of these policies is based on an estimate of the policies' exit price. The Company's funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. In 2020, 2019, and 2018, we were not required to make contributions to our U.S. pension plans and no contributions were made. We are not required to make any contributions to our U.S. pension plans in 2021. In 2020, contributions of $109 million were made to our non-U.S. pension plans to satisfy regulatory funding requirements. In 2021, we expect to make contributions of cash and/or marketable securities of approximately $85 million to our non-U.S. pension plans to satisfy regulatory funding standards. Contributions for both our U.S. and non-U.S. pension plans do not reflect benefits paid directly from Company assets. Benefit payments, including amounts to be paid from Company assets, and reflecting expected future service, as appropriate, are expected to be paid as follows:
| U.S. Plans |  | Non-U.S. Plans
2021 | $ | 1,147 |  |  | $ | 240 |
2022 | 1,143 |  |  | 242 |
2023 | 1,139 |  |  | 247 |
2024 | 1,130 |  |  | 252 |
2025 | 1,116 |  |  | 257 |
2026-2030 | 5,246 |  |  | 1,365 |
OTHER POSTRETIREMENT BENEFITS
| December 31,
2020 |  | 2019
Assumed health care cost trend rate: |  |  |
Health care cost trend rate assumed for next year | 7.00 | % |  | 7.00 | %
Rate that the cost trend rate gradually declines to | 5.00 | % |  | 5.00 | %
Year that the rate reaches the rate it is assumed to remain at | 2029 |  | 2029
Benefit payments reflecting expected future service, as appropriate, are expected to be paid as follows:
| Without Impact of Medicare Subsidy |  | Net of Medicare Subsidy
2021 | $ | 29 |  |  | $ | 27 |
2022 | 28 |  |  | 25 |
2023 | 26 |  |  | 24 |
2024 | 15 |  |  | 14 |
2025 | 14 |  |  | 13 |
2026-2030 | 61 |  |  | 57 |

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