We sponsor various defined benefit pension and other post retirement plans covering employees of certain U.S. and international subsidiaries. The pension plans provide pension benefits that are based on the employee’s compensation and years of service. Our funding policy varies by country and plan according to applicable local funding requirements and plan-specific funding agreements.

The accounting for pension and other post-retirement benefit plans requires the use of assumptions and estimates in order to calculate periodic benefit cost and the value of the plans’ assets and benefit obligations. These assumptions include discount rates, investment returns, and projected salary increases, among others. The discount rates used in valuing the plans' benefit obligations were determined with reference to high quality corporate and government bonds that are appropriately matched to the duration of each plan's obligations. The expected long-term rate of return on plan assets is generally based on using country-specific simulation models which select a single outcome for expected return based on the target asset allocation. The expected long-term rates of return used in the valuation are the annual average returns generated by these assumptions over a 20-year period for each asset class based on the expected long-term rate of return of the underlying assets.

As a result of the ECR sale, ECR-related pension assets and liabilities that have been sold are reported as discontinued operations in accordance with ASC 210-05, Discontinued Operations. However, the 2018 Non-U.S Plans balances have not been restated to exclude ECR pension plan activity, rather activity for the two years is shown in the appropriate rows and the balances as of the sale date are shown in the Disposition of ECR Plans rows below.

The following table sets forth the changes in the plans’ combined net benefit obligation (segregated between plans existing within and outside the U.S.) for the years ended September 27, 2019 and September 28, 2018 (in thousands):



	U.S. Plans						Non-U.S. Plans⁽¹⁾
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Net benefit obligation at the beginning of the year	$	448,402		$	169,942		$	2,149,246		$	1,306,807
Service cost	2,784			4,765			7,171			8,269
Interest cost	16,697			13,778			52,627			49,324
Participants’ contributions	243			839			367			451
Actuarial (gains)/losses	52,720			(30,730		)	314,889			(43,595		)
Benefits paid	(30,648		)	(27,914		)	(72,453		)	(75,711		)
Curtailments/settlements/plan amendments	(39,388		)	(9,434		)	30,124			(6,136		)
Acquisition of CH2M Plans	—			327,156			—			924,233
Disposition of ECR Plans	—			—			(99,504		)	—
Effect of exchange rate changes and other, net	(2,270		)	—			(124,338		)	(14,396		)
Net benefit obligation at the end of the year	$	448,540		$	448,402		$	2,258,129		$	2,149,246

The following table sets forth the changes in the combined Fair Value of the plans’ assets (segregated between plans existing within and outside the U.S.) for the years ended September 27, 2019 and September 28, 2018 (in thousands):



	U.S. Plans						Non-U.S. Plans⁽¹⁾
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Fair value of plan assets at the beginning of the year	$	390,829		$	147,788		$	1,867,481		$	1,076,928
Actual return on plan assets	31,140			9,891			280,785			(19,883		)
Employer contributions	10,668			58,097			32,063			31,556
Participants’ contributions	243			839			367			451
Gross benefits paid	(30,648		)	(27,914		)	(72,453		)	(75,711		)
Curtailments/settlements/plan amendments	(9,751		)	(9,434		)	(5,814		)	(5,496		)
Acquisition of CH2M Plans	—			211,562			—			869,414
Disposition of ECR Plans	—			—			(76,111		)	—
Effect of exchange rate changes and other, net	(2,271		)	—			(109,681		)	(9,778		)
Fair value of plan assets at the end of the year	$	390,210		$	390,829		$	1,916,637		$	1,867,481

During fiscal 2019, the Company incurred combined curtailment and settlement gains on our defined benefit plans of approximately $33.1 million primarily related to our CH2M retiree medical (further discussed below) and Ireland. During fiscal 2018, the Company incurred combined curtailment and settlement losses on its defined benefit plans of approximately $5.4 million primarily related to its Sverdrup and Ireland pension plans.

The following table reconciles the combined funded statuses of the plans recognized in the accompanying Consolidated Balance Sheets at September 27, 2019 and September 28, 2018 (segregated between plans existing within and outside the U.S.) (in thousands):



	U.S. Plans				Non-U.S. Plans ⁽¹⁾
	September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Net benefit obligation at the end of the year	$	448,540	$	448,402	$	2,258,129	$	2,149,246
Fair value of plan assets at the end of the year	390,210		390,829		1,916,637		1,867,481
Under funded amount recognized at the end of the year	$	58,330	$	57,573	$	341,492	$	281,765



	U.S. Plans				Non-U.S. Plans ⁽¹⁾
	September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Prepaid benefit cost included in noncurrent assets	$	—	$	—	$	2,939	$	19,736
Accrued benefit cost included in current liabilities	85		2,548		4,177		3,671
Accrued benefit cost included in noncurrent liabilities	58,245		55,025		340,254		297,830
Net amount recognized at the end of the year	$	58,330	$	57,573	$	341,492	$	281,765

The following table presents the significant actuarial assumptions used in determining the funded statuses and the following year's benefit cost of the Company’s U.S. plans for the years ended September 27, 2019, September 28, 2018 and September 29, 2017:

The following table presents the significant actuarial assumptions used in determining the funded statuses and the following year's benefit cost of the Company’s non-U.S. plans for the years ended September 27, 2019, September 28, 2018 and September 29, 2017:



	For the Years Ended
	September 27, 2019	September 28, 2018	September 29, 2017
Discount rates	0.2% to 7.1%	1.3% to 8.1%	1.3% to 7.0%
Rates of compensation increases	3.7% to 7.5%	3.8% to 7.5%	5.5% to 7.5%
Expected long-term rates of return on assets	2.3% to 7.5%	3.8% to 7.5%	5.3% to 8.5%



	September 27, 2019			September 28, 2018			September 29, 2017
Arising during the period:
Net actuarial (gain) loss	$	36,108		$	(7,514	)	$	(11,372	)
Reclassification adjustments:
Net actuarial losses	(2,282		)	(2,913		)	(2,431		)
Total	$	33,826		$	(10,427	)	$	(13,803	)



	September 27, 2019			September 28, 2018			September 29, 2017
Arising during the period:
Net actuarial (gain) loss	$	83,368		$	59,827		$	(76,860	)
Net (gain) loss on Sale of ECR	(12,520		)	—			—
Prior service cost (benefit)	29,829			215			119
Total	100,677			60,042			(76,741		)
Reclassification adjustments:
Net actuarial losses	(6,546		)	(5,507		)	(8,732		)
Prior service cost	(1,075		)	181			229
Total	(7,621		)	(5,326		)	(8,503		)
Total	$	93,056		$	54,716		$	(85,244	)

The following table presents certain amounts relating to our plans recorded in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost at September 27, 2019 and September 28, 2018 (segregated between U.S. and non-U.S. plans) (in thousands):



	U.S. Plans				Non-U.S. Plans
	September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Net actuarial loss	$	71,083	$	37,255	$	365,661	$	273,312
Prior service cost	—		—		28,346		(700		)
Total	$	71,083	$	37,255	$	394,007	$	272,612

The following table presents the amount of accumulated comprehensive income that will be amortized against earnings as part of our net periodic benefit cost in fiscal 2020 based on 2019 exchange rates (segregated between U.S. and non-U.S. plans) (in thousands):

We consider various factors in developing the estimates for the expected, long-term rates of return on plan assets. These factors include the projected, long-term rates of returns on the various types of assets in which the plans invest, as well as historical returns. In general, investment allocations are determined by each plan’s trustees and/or investment committees. The objectives of the plans’ investment policies are to (i) maximize returns while preserving capital; (ii) provide returns sufficient to meet the current and long-term obligations of the plan as the obligations become due; and (iii) maintain a diversified portfolio of assets so as to reduce the risk associated with having a disproportionate amount of the plans’ total assets invested in any one type of asset, issuer or geography. None of our pension plans hold Jacobs common stock directly (although some plans may hold shares indirectly through investments in mutual funds). The plans’ weighted average asset allocations at September 27, 2019 and September 28, 2018 (the measurement dates used in valuing the plans’ assets and liabilities) were as follows:



	U.S. Plans				Non-U.S. Pans
	September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Equity securities	3	%	27	%	20	%	24	%
Debt securities	58	%	39	%	52	%	49	%
Real estate investments	—	%	—	%	7	%	8	%
Other	39	%	34	%	21	%	19	%

The following table presents the Fair Value of the Company’s Domestic U.S. plan assets at September 27, 2019, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):



	September 27, 2019
	Fair Value, Determined Using Fair Value Measurement Inputs
	Level 1		Level 2		Level 3		Investments measured at Net Asset Value		Total
Domestic equities	$	10,890	$	—	$	—	$	—	$	10,890
Overseas equities	—		—		—		—		—
Domestic bonds	65,490		134,594		—		—		200,084
Overseas bonds	—		20,020		—		—		20,020
Cash and equivalents	28,972		—		—		—		28,972
Mutual funds	130,244		—		—		—		130,244
Hedge funds	—		—		—		—		—
Total	$	235,596	$	154,614	$	—	$	—	$	390,210

The following table presents the Fair Value of the Company’s non-U.S. plan assets at September 27, 2019, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):



	September 27, 2019
	Fair Value, Determined Using Fair Value Measurement Inputs
	Level 1		Level 2			Level 3		Investments measured at Net Asset Value		Total
Domestic equities	$	—	$	17,255		$	—	$	19,413	$	36,668
Overseas equities	—		182,600			—		50,127		232,727
Domestic bonds	—		306,225			—		34,408		340,633
Overseas bonds	—		728,616			—		39,292		767,908
Cash and equivalents	37,811		(16		)	—				37,795
Real estate	—		24,735			97,539		15,198		137,472
Insurance contracts	—		4,478			72,788				77,266
Derivatives	—		—			—				—
Hedge funds	—		—			130,200		7,156		137,356
Mutual funds	—		148,812			—		—		148,812
Total	$	37,811	$	1,412,705		$	300,527	$	165,594	$	1,916,637

The following table presents the Fair Value of the Company’s U.S. plan assets at September 28, 2018, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):



	September 28, 2018
	Fair Value, Determined Using Fair Value Measurement Inputs
	Level 1		Level 2		Level 3		Investments measured at Net Asset Value		Total
Domestic equities	$	13,861	$	63,937	$	—	$	—	$	77,798
Overseas equities	26,699		—		—		—		26,699
Domestic bonds	84,894		58,229		—		—		143,123
Overseas bonds	938		9,570		—		—		10,508
Cash and equivalents	6,631		—		—		—		6,631
Mutual funds	126,042		—		—		—		126,042
Hedge funds	—		—		—		28		28
Total	$	259,065	$	131,736	$	—	$	28	$	390,829

The following table presents the Fair Value of the Company’s non-U.S. plan assets at September 28, 2018, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):



	September 28, 2018
	Fair Value, Determined Using Fair Value Measurement Inputs
	Level 1		Level 2			Level 3		Investments measured at Net Asset Value		Total
Domestic equities	$	—	$	31,868		—		36,642		$	68,510
Overseas equities	—		327,309			—		44,675		371,984
Domestic bonds	252		222,282			—		1,080		223,614
Overseas bonds	—		641,966			—		60,804		702,770
Cash and equivalents	33,482		7,822			—				41,304
Real estate	—		26,987			99,587		17,568		144,142
Insurance contracts	—		4,188			95,782				99,970
Derivatives	69		(26,656		)	—				(26,587		)
Hedge funds	—		—			135,786		8,047		143,833
Mutual funds	—		97,941			—				97,941
Total	$	33,803	$	1,333,707		$	331,155	$	168,816	$	1,867,481



	Real Estate			Insurance Contracts			Hedge Funds
Balance at Balance at September 29, 2017	$	58,974		$	74,353		$	303,729
Purchases, sales, and settlements	42,711			21,626			(154,446		)
Realized and unrealized gains	(784		)	1,551			(6,650		)
Effect of exchange rate changes	(1,314		)	(1,748		)	(6,847		)
Balance at September 28, 2018	$	99,587		$	95,782		$	135,786
Purchases, sales, and settlements	(17,902		)	(5,126		)	(26,591		)
Realized and unrealized gains (losses)	21,838			9,134			29,161
Disposition of ECR Assets	—			(22,885		)	—
Effect of exchange rate changes	(5,984		)	(4,117		)	(8,156		)
Balance at September 27, 2019	$	97,539		$	72,788		$	130,200

The following table presents the components of net periodic benefit cost for the Company’s U.S. plans recognized in the accompanying Consolidated Statements of Earnings for the years ended September 27, 2019, September 28, 2018 and September 29, 2017 (in thousands):



	September 27, 2019			September 28, 2018			September 29, 2017
Service cost	$	2,784		$	4,765		$	1,000
Interest cost	16,697			13,778			5,757
Expected return on plan assets	(21,508		)	(19,663		)	(9,942		)
Actuarial loss	3,026			3,845			3,985
Prior service cost	—			—			—
Net pension cost, before special items	$	999		$	2,725		$	800
Curtailment expense/Settlement (gain) loss	(35,020		)	4,146			1,781
Total net periodic pension cost recognized	$	(34,021	)	$	6,871		$	2,581

The following table presents the components of net periodic benefit cost for the Company’s Non-U.S. plans recognized in the accompanying Consolidated Statements of Earnings for the years ended September 27, 2019, September 28, 2018 and September 29, 2017 (in thousands):



	September 27, 2019			September 28, 2018			September 29, 2017
Service cost	$	7,171		$	8,269		$	7,509
Interest cost	52,627			49,324			31,205
Expected return on plan assets	(82,274		)	(83,328		)	(56,269		)
Actuarial loss	7,854			6,655			10,616
Prior service cost	1,263			(257		)	(329		)
Net pension cost, before special items	$	(13,359	)	$	(19,337	)	$	(7,268	)
Curtailment expense/Settlement (gain) loss	1,933			1,268			(298		)
Total net periodic pension (income) cost recognized	$	(11,426	)	$	(18,069	)	$	(7,566	)
Total net periodic pension (income) cost recognized from Discontinued Operations	$	2,282		$	3,606		$	3,279
Total net periodic pension (income) cost recognized from Continuing Operations	$	(13,708	)	$	(21,675	)	$	(10,845	)

As a result of the adoption of ASU 2017-07, Compensation- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost in the first quarter of fiscal 2019, the service cost component of net periodic pension expense has been presented in the same line item as other compensation costs (direct cost of contracts and selling, general and administrative expenses) and the other components of net periodic pension expense have been reclassified from selling, general and administrative expense and direct cost of contracts and instead presented in miscellaneous income (expense), net on the Consolidated Statements of Earnings for the years ended September 27, 2019, September 28, 2018 and September 29, 2017 in the amounts of $24.4 million, $24.2 million and $13.5 million, respectively.

In the first quarter of fiscal 2019, the Company elected to discontinue the CH2M Hill Retiree Medical Plan and the OMI Retiree Medical Plan, effective December 31, 2018. Lump sum payments were made to participants in fiscal 2019, resulting in a plan settlement and related settlement gain of $35.0 million recognized in fiscal 2019.

Due to a recent ruling by the High Court in the United Kingdom regarding equalization between men and women of a tranche of pension (the Guaranteed Minimum Pension) accrued between 1990 and 1997, Jacobs measured the estimated impact of this ruling in its consolidated financial statements, resulting in an increase of approximately $38.2 million in the ASC 715 balance sheet liability in fiscal 2019, with an offset to other comprehensive income, net of tax. Additionally, the Company has recognized an additional $1.5 million in additional net periodic benefit cost during the year ended September 27, 2019 as a result of the ruling.

In Canada and the U.S., we contribute to various trusteed pension plans covering hourly construction employees under industry-wide agreements. We also contribute to various trusteed plans in Australia and certain countries in Europe covering both hourly and certain salaried employees. Contributions are based on the hours worked by employees covered under these agreements and are charged to direct costs of contracts on a current basis.

The majority of the contributions the Company makes to multiemployer pension plans are outside the U.S. With respect to these multiemployer plans, the Company's liability to fund these plans is generally limited to the contributions we are required to make under collective bargaining agreements.

Based on our review of our multiemployer pension plans under the guidance provided in ASU 2011-09— Compensation-Retirement Benefits-Multiemployer Plans, we have concluded that none of the multiemployer pension plans into which we contribute are individually significant to our Consolidated Financial Statements.



	September 27, 2019		September 28, 2018		September 29, 2017
Canada	$	16,625	$	36,354	$	35,182
Europe	9,413		10,677		6,212
United States	7,149		9,536		4,548
Contributions to multiemployer pension plans	$	33,187	$	56,567	$	45,942

During the second fiscal quarter of 2017, the Company restructured certain employee welfare trust plans benefiting certain of its employees within its India operations by moving these plans under the legal ownership and operation of the Company’s legal entity structure in the region. Historically, the Company structured these plans as separate, stand-alone entities outside of the Company’s consolidated legal entity framework. As a result of these changes, the Company has recorded a one-time, non-cash benefit of $9.9 million reported in selling, general and administrative expense in its Consolidated Statement of Earnings for the year ended September 29, 2017, with corresponding assets in the plans associated with restricted investments of $7.7 million and employee loans receivable of $2.2 million and both recorded in Total other non-current assets in our Consolidated Balance Sheet at September 29, 2017.