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PENSION, DEFERRED COMPENSATION AND POST-RETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended
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Jun. 30, 2021
Retirement Benefits [Abstract] |
Schedule of components of net periodic benefit cost for pension and other post-retirement benefit plans | The significant components of the above-mentioned plans as of and for the years ended June 30 are summarized as follows:
|  | Pension Plans |  | Other than Pension Plans
|  | U.S. |  | International |  | Post-retirement
(In millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 1,082 |  |  | $ | 966 |  |  | $ | 636 |  |  | $ | 631 |  |  | $ | 190 |  |  | $ | 183 |
Service cost |  | 45 |  |  | 39 |  |  | 36 |  |  | 36 |  |  | 2 |  |  | 3 |
Interest cost |  | 31 |  |  | 35 |  |  | 10 |  |  | 11 |  |  | 6 |  |  | 6 |
Plan participant contributions |  | — |  |  | — |  |  | 7 |  |  | 6 |  |  | — |  |  | — |
Actuarial loss (gain) |  | (10) |  |  | 101 |  |  | (9) |  |  | (12) |  |  | 11 |  |  | 6 |
Foreign currency exchange rate impact |  | — |  |  | — |  |  | 67 |  |  | (1) |  |  | 6 |  |  | (1) |
Benefits, expenses, taxes and premiums paid |  | (74) |  |  | (59) |  |  | (35) |  |  | (32) |  |  | (6) |  |  | (7) |
Plan amendments |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Settlements |  | — |  |  | — |  |  | (22) |  |  | (3) |  |  | — |  |  | — |
Special termination benefits |  | — |  |  | — |  |  | 10 |  |  | — |  |  | — |  |  | — |
Benefit obligation at end of year |  | $ | 1,075 |  |  | $ | 1,082 |  |  | $ | 700 |  |  | $ | 636 |  |  | $ | 209 |  |  | $ | 190 |
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 930 |  |  | $ | 832 |  |  | $ | 611 |  |  | $ | 577 |  |  | $ | 27 |  |  | $ | 31 |
Actual return on plan assets |  | 106 |  |  | 109 |  |  | 11 |  |  | 43 |  |  | 3 |  |  | 3 |
Foreign currency exchange rate impact |  | — |  |  | — |  |  | 69 |  |  | (4) |  |  | — |  |  | — |
Employer contributions |  | 19 |  |  | 48 |  |  | 40 |  |  | 25 |  |  | — |  |  | — |
Plan participant contributions |  | — |  |  | — |  |  | 7 |  |  | 6 |  |  | — |  |  | — |
Settlements |  | — |  |  | — |  |  | (22) |  |  | (4) |  |  | — |  |  | — |
Benefits, expenses, taxes and premiums paid from plan assets |  | (74) |  |  | (59) |  |  | (35) |  |  | (32) |  |  | (6) |  |  | (7) |
Fair value of plan assets at end of year |  | $ | 981 |  |  | $ | 930 |  |  | $ | 681 |  |  | $ | 611 |  |  | $ | 24 |  |  | $ | 27 |
Funded status |  | $ | (94) |  |  | $ | (152) |  |  | $ | (19) |  |  | $ | (25) |  |  | $ | (185) |  |  | $ | (163) |
Amounts recognized in the Balance Sheet consist of: |  |  |  |  |  |  |  |  |  |  |  |
Other assets |  | $ | 35 |  |  | $ | — |  |  | $ | 127 |  |  | $ | 127 |  |  | $ | — |  |  | $ | — |
Other accrued liabilities |  | (23) |  |  | (23) |  |  | (4) |  |  | (4) |  |  | (1) |  |  | — |
Other noncurrent liabilities |  | (106) |  |  | (129) |  |  | (142) |  |  | (148) |  |  | (184) |  |  | (163) |
Funded status |  | (94) |  |  | (152) |  |  | (19) |  |  | (25) |  |  | (185) |  |  | (163) |
Accumulated other comprehensive loss |  | 200 |  |  | 283 |  |  | 15 |  |  | 24 |  |  | 27 |  |  | 17 |
Net amount recognized |  | $ | 106 |  |  | $ | 131 |  |  | $ | (4) |  |  | $ | (1) |  |  | $ | (158) |  |  | $ | (146) |
For the twelve months ended June 30, 2021, the actuarial gains and losses affecting the benefit obligations were not material. For the twelve months ended June 30, 2020, the $101 million actuarial loss relating to the U.S. pension plans was primarily due to declines in the discount rates relating to the Retirement Growth Account Plan and the Restoration Plan from 3.8% to 3.0% and 3.4% to 2.5%, respectively. The decline in the discount rates as of June 30, 2020 were a result of lower rates on highly rated long-term bonds.
Net periodic benefit costs and weighted-average assumptions |
|  | Pension Plans |  | Other than Pension Plans
|  | U.S. |  | International |  | Post-retirement
($ in millions) |  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
Components of net periodic benefit cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 45 |  |  | $ | 39 |  |  | $ | 38 |  |  | $ | 36 |  |  | $ | 36 |  |  | $ | 30 |  |  | $ | 2 |  |  | $ | 3 |  |  | $ | 3 |
Interest cost |  | 31 |  |  | 35 |  |  | 37 |  |  | 10 |  |  | 11 |  |  | 13 |  |  | 6 |  |  | 6 |  |  | 7 |
Expected return on assets |  | (53) |  |  | (53) |  |  | (55) |  |  | (14) |  |  | (14) |  |  | (14) |  |  | (1) |  |  | (2) |  |  | (2) |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial loss |  | 20 |  |  | 15 |  |  | 11 |  |  | 4 |  |  | 6 |  |  | 3 |  |  | — |  |  | — |  |  | — |
Prior service cost |  | — |  |  | — |  |  | 1 |  |  | (1) |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |
Settlements |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |
Special termination benefits |  | — |  |  | — |  |  | — |  |  | 10 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net periodic benefit cost |  | $ | 43 |  |  | $ | 36 |  |  | $ | 32 |  |  | $ | 45 |  |  | $ | 39 |  |  | $ | 32 |  |  | $ | 7 |  |  | $ | 7 |  |  | $ | 8 |
Assumptions used to determine benefit obligations at June 30(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 2.50 – 3.00% |  | 2.50 – 3.00% |  | 3.40 – 3.80% |  | 0.50 – 7.25% |  | 0.50 – 7.00% |  | .25 – 8.50% |  | 2.70 – 9.00% |  | 2.70 – 9.00% |  | 3.25 – 9.75%
Rate of compensation increase |  | 2.50 – 8.00% |  | 2.50 – 8.00% |  | 2.50 – 8.00% |  | 1.00 – 5.00% |  | 1.00 – 5.50% |  | 1.00– 5.50% |  | N/A |  | N/A |  | N/A
Assumptions used to determine net periodic benefit cost for the year ended June 30(2): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 2.50 – 3.00% |  | 3.40 – 3.80% |  | 4.10 – 4.30% |  | .50 – 7.00% |  | .25– 8.50% |  | .50 – 7.50% |  | 2.70 – 9.00% |  | 3.25 – 9.75% |  | 3.75 – 9.75%
Expected return on assets |  | 6.25 | % |  | 6.75 | % |  | 6.75 | % |  | 1.25 – 7.00% |  | 1.50 – 8.50% |  | 1.50 – 7.50% |  | 6.25 | % |  | 6.75 | % |  | 6.75 | %
Rate of compensation increase |  | 2.50 – 8.00% |  | 2.50 – 8.00% |  | 2.50– 8.00% |  | 1.00 – 5.50% |  | 1.00 – 5.50% |  | 1.00 – 5.50% |  | N/A |  | N/A |  | N/A
(1) The weighted-average assumptions used to determine benefit obligations at June 30, 2021 were as follows: a.Discount rate - 2.94% (U.S.), 1.59% (International) and 2.92% (Other than Pension Plans, Post-retirement) b.Rate of compensation increase - 2.50% - 8.00%, graded (U.S.), 2.81% (International) and N/A (Other than Pension Plans, Post-retirement) (2) The weighted-average assumptions used to determine net periodic benefit cost for the year ended June 30, 2021 were as follows: a.Discount rate - 2.93% (U.S.), 1.44% (International) and 2.90% (Other than Pension Plans, Post-retirement) b.Expected return on assets - 6.25% (U.S. and Other than Pension Plans, Post-retirement) and 2.06% (International) c.Rate of compensation increase - 2.50% - 8.00%, graded (U.S.), 2.72% (International) and N/A (Other than Pension Plans, Post-retirement)
Amounts recognized in AOCI (before tax) | Amounts recognized in AOCI (before tax) as of June 30, 2021 are as follows:
|  | Pension Plans |  | Other than Pension Plans |  |
(In millions) |  | U.S. |  | International |  | Post-retirement |  | Total
Net actuarial losses, beginning of year |  | $ | 282 |  |  | $ | 30 |  |  | $ | 17 |  |  | $ | 329 |
Actuarial losses (gains) recognized |  | (64) |  |  | (6) |  |  | 10 |  |  | (60) |
Amortization and settlements included in net periodic benefit cost |  | (20) |  |  | (4) |  |  | — |  |  | (24) |
Translation adjustments |  | — |  |  | — |  |  | — |  |  | — |
Net actuarial losses, end of year |  | 198 |  |  | 20 |  |  | 27 |  |  | 245 |
Net prior service cost, beginning of year |  | 1 |  |  | (6) |  |  | — |  |  | (5) |
Amortization included in net periodic benefit cost |  | 1 |  |  | 1 |  |  | — |  |  | 2 |
Net prior service cost, end of year |  | 2 |  |  | (5) |  |  | — |  |  | (3) |
Total amounts recognized in AOCI |  | $ | 200 |  |  | $ | 15 |  |  | $ | 27 |  |  | $ | 242 |
Projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the company's pension plans | The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company’s pension plans at June 30 are as follows:
|  | Pension Plans |  | Other than Pension Plans
|  | Retirement Growth Account |  | Restoration |  | International |  | Post-retirement
(In millions) |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2021 |  | 2020
Projected benefit obligation |  | $ | 946 |  |  | $ | 940 |  |  | $ | 129 |  |  | $ | 142 |  |  | $ | 700 |  |  | $ | 636 |  |  | $ | 209 |  |  | $ | 190 |
Accumulated benefit obligation |  | $ | 897 |  |  | $ | 887 |  |  | $ | 113 |  |  | $ | 124 |  |  | $ | 636 |  |  | $ | 576 |  |  | $ | — |  |  | $ | — |
Fair value of plan assets |  | $ | 981 |  |  | $ | 930 |  |  | $ | — |  |  | $ | — |  |  | $ | 681 |  |  | $ | 611 |  |  | $ | 24 |  |  | $ | 27 |
Expected cash flows | The expected cash flows for the Company’s pension and post-retirement plans are as follows:
|  | Pension Plans |  | Other than Pension Plans
(In millions) |  | U.S. |  | International |  | Post-retirement
Expected employer contributions for year ending June 30, 2022 |  | $ | — |  |  | $ | 29 |  |  | —
Expected benefit payments for year ending June 30, |  |  |  |  |  |
2022 |  | 70 |  |  | 38 |  |  | 9 |
2023 |  | 52 |  |  | 37 |  |  | 9 |
2024 |  | 51 |  |  | 35 |  |  | 10 |
2025 |  | 52 |  |  | 36 |  |  | 11 |
2026 |  | 52 |  |  | 36 |  |  | 11 |
Years 2027 – 2031 |  | 292 |  |  | 172 |  |  | 63 |
Target asset allocation | The Company’s target asset allocation at June 30, 2021 is as follows:
|  | Pension Plans |  | Other than Pension Plans
|  | U.S. |  | International |  | Post-retirement
Equity |  | 42 | % |  | 13 | % |  | 42 | %
Debt securities |  | 50 | % |  | 63 | % |  | 50 | %
Other |  | 8 | % |  | 24 | % |  | 8 | %
|  | 100 | % |  | 100 | % |  | 100 | %
Fair values of the company's pension and post-retirement plan assets by asset category | The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category as of June 30, 2021:
(In millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Assets Measured at NAV |  | Total
Cash and cash equivalents |  | $ | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |
Short term investment funds |  | — |  |  | 7 |  |  | — |  |  | 6 |  |  | 13 |
Government and agency securities |  | — |  |  | 124 |  |  | — |  |  | — |  |  | 124 |
Commingled funds |  | 455 |  |  | 660 |  |  | — |  |  | 274 |  |  | 1,389 |
Insurance contracts |  | — |  |  | — |  |  | 54 |  |  | — |  |  | 54 |
Limited partnerships and hedge fund investments |  | — |  |  | — |  |  | — |  |  | 104 |  |  | 104 |
Total |  | $ | 457 |  |  | $ | 791 |  |  | $ | 54 |  |  | $ | 384 |  |  | $ | 1,686 |
The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category as of June 30, 2020:
(In millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Assets Measured at NAV |  | Total
Cash and cash equivalents |  | $ | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |
Short term investment funds |  | — |  |  | 7 |  |  | — |  |  | 6 |  |  | 13 |
Government and agency securities |  | — |  |  | 152 |  |  | — |  |  | — |  |  | 152 |
Commingled funds |  | 386 |  |  | 666 |  |  | — |  |  | 207 |  |  | 1,259 |
Insurance contracts |  | — |  |  | — |  |  | 49 |  |  | — |  |  | 49 |
Limited partnerships and hedge fund investments |  | — |  |  | — |  |  | — |  |  | 93 |  |  | 93 |
Total |  | $ | 388 |  |  | $ | 825 |  |  | $ | 49 |  |  | $ | 306 |  |  | $ | 1,568 |
Changes in Level 3 plan assets | The following table presents the changes in Level 3 plan assets:
|  | June 30
(In millions) |  | 2021 |  | 2020
Insurance Contracts |  |  |  |
Balance at beginning of year |  | $ | 49 |  |  | $ | 49 |
Actual return on plan assets: |  |  |  |
Relating to assets still held at the reporting date |  | 1 |  |  | 2 |
Purchases, sales, issuances and settlements, net |  | (1) |  |  | (2) |
Foreign exchange impact |  | 5 |  |  | — |
Balance at end of year |  | $ | 54 |  |  | $ | 49 |

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