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RETIREMENT PLANS | 12 Months Ended
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Dec. 31, 2020
Retirement Benefits [Abstract] |
RETIREMENT PLANS | RETIREMENT PLANS As described below, Eastman offers various postretirement benefits to its employees. Defined Contribution Plans Eastman sponsors a defined contribution employee stock ownership plan (the "ESOP"), which is a component of the Eastman Investment Plan and Employee Stock Ownership Plan ("EIP/ESOP"), under Section 401(a) of the Internal Revenue Code. Eastman made a contribution in February 2021 to the EIP/ESOP for substantially all U.S. employees equal to 5 percent of their eligible compensation for the 2020 plan year. Employees may allocate contributions to other investment funds within the EIP from the ESOP at any time without restrictions. Allocated shares in the ESOP totaled 1,997,587; 2,076,203; and 2,119,614 shares as of December 31, 2020, 2019, and 2018, respectively. Dividends on shares held by the EIP/ESOP are charged to retained earnings. All shares held by the EIP/ESOP are treated as outstanding in computing earnings per share ("EPS"). In 2006, the Company amended its EIP/ESOP to provide a Company match of 50 percent of the first 7 percent of an employee's compensation contributed to the plan for employees who are hired on or after January 1, 2007. Employees who are hired on or after January 1, 2007, are also eligible for the contribution to the ESOP as described above. Charges for domestic contributions to the EIP/ESOP were $67 million, $68 million, and $67 million for 2020, 2019, and 2018, respectively. Defined Benefit Pension Plans and Other Postretirement Benefit Plans Pension Plans Eastman maintains defined benefit pension plans that provide eligible employees with retirement benefits. Effective January 1, 2000, the Company's Eastman Retirement Assistance Plan, a U.S. defined benefit pension plan, was amended. Employees' accrued pension benefits earned prior to January 1, 2000 are calculated based on previous plan provisions using the employee's age, years of service, and final average compensation as defined in the plans. The amended plan uses a pension equity formula to calculate an employee's retirement benefits from January 1, 2000 forward. Benefits payable will be the combined pre-2000 and post-1999 benefits. Employees hired on or after January 1, 2007 are not eligible to participate in Eastman's U.S. defined benefit pension plans. Benefits are paid to employees from trust funds. Contributions to the trust funds are made as permitted by laws and regulations. The pension trust funds do not directly own any of the Company's common stock. Pension coverage for employees of Eastman's non-U.S. operations is provided, to the extent deemed appropriate, through separate plans. The Company systematically provides for obligations under such plans by depositing funds with trustees, under insurance policies, or by book reserves. Other Postretirement Benefit Plans Under its other postretirement benefit plans in the U.S., Eastman provides life insurance for eligible retirees hired prior to January 1, 2007. Eastman provides a subsidy for pre-Medicare health care and dental benefits to eligible retirees hired prior to January 1, 2007 that will end on December 31, 2021. Company funding is also provided for eligible Medicare retirees hired prior to January 1, 2007 with a health reimbursement arrangement. A few of the Company's non-U.S. operations have supplemental health benefit plans for certain retirees, the cost of which is not significant to the Company. Below is a summary balance sheet of the change in plan assets during 2020 and 2019, the funded status of the plans and amounts recognized in the Consolidated Statements of Financial Position. Summary of Changes
| Pension Plans |  | Postretirement Benefit Plans
| 2020 |  | 2019 |  | 2020 |  | 2019
(Dollars in millions) | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  |  |  |
Change in projected benefit obligation: |  |  |  |  |  |  |  |  |  |  |
Benefit obligation, beginning of year | $ | 2,067 |  |  | $ | 972 |  |  | $ | 1,959 |  |  | $ | 840 |  |  | $ | 716 |  |  | $ | 672 |
Service cost | 25 |  |  | 17 |  |  | 27 |  |  | 14 |  |  | — |  |  | — |
Interest cost | 57 |  |  | 15 |  |  | 76 |  |  | 20 |  |  | 19 |  |  | 25 |
Actuarial loss | 203 |  |  | 66 |  |  | 200 |  |  | 113 |  |  | 57 |  |  | 71 |
Settlement | (122) |  |  | (6) |  |  | — |  |  | — |  |  | — |  |  | — |
Plan amendments and other | — |  |  | (12) |  |  | — |  |  | — |  |  | — |  |  | — |
Plan participants' contributions | — |  |  | 1 |  |  | — |  |  | 1 |  |  | 10 |  |  | 10 |
Effect of currency exchange | — |  |  | 61 |  |  | — |  |  | 11 |  |  | — |  |  | 1 |
Federal subsidy on benefits paid | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |
Benefits paid | (180) |  |  | (25) |  |  | (195) |  |  | (27) |  |  | (58) |  |  | (63) |
Benefit obligation, end of year | $ | 2,050 |  |  | $ | 1,089 |  |  | $ | 2,067 |  |  | $ | 972 |  |  | $ | 745 |  |  | $ | 716 |
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of year | $ | 1,919 |  |  | $ | 820 |  |  | $ | 1,820 |  |  | $ | 713 |  |  | $ | 139 |  |  | $ | 135 |
Actual return on plan assets | 175 |  |  | 72 |  |  | 289 |  |  | 102 |  |  | 18 |  |  | 27 |
Effect of currency exchange | — |  |  | 54 |  |  | — |  |  | 9 |  |  | — |  |  | — |
Company contributions | 6 |  |  | 22 |  |  | 5 |  |  | 22 |  |  | 39 |  |  | 42 |
Reserve for third party contributions | — |  |  | — |  |  | — |  |  | — |  |  | (5) |  |  | (12) |
Plan participants' contributions | — |  |  | 1 |  |  | — |  |  | 1 |  |  | 10 |  |  | 10 |
Benefits paid | (180) |  |  | (25) |  |  | (195) |  |  | (27) |  |  | (58) |  |  | (63) |
Federal subsidy on benefits paid | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |
Settlements | (122) |  |  | (6) |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value of plan assets, end of year | $ | 1,798 |  |  | $ | 938 |  |  | $ | 1,919 |  |  | $ | 820 |  |  | $ | 144 |  |  | $ | 139 |
Funded status at end of year | $ | (252) |  |  | $ | (151) |  |  | $ | (148) |  |  | $ | (152) |  |  | $ | (601) |  |  | $ | (577) |
Amounts recognized in the Consolidated Statements of Financial Position consist of: |  |  |  |  |  |  |  |  |  |  |
Other noncurrent assets | $ | — |  |  | $ | 1 |  |  | $ | 13 |  |  | $ | — |  |  | $ | 57 |  |  | $ | 50 |
Current liabilities | (3) |  |  | (1) |  |  | (3) |  |  | (1) |  |  | (46) |  |  | (47) |
Post-employment obligations | (249) |  |  | (151) |  |  | (158) |  |  | (151) |  |  | (612) |  |  | (580) |
Net amount recognized, end of year | $ | (252) |  |  | $ | (151) |  |  | $ | (148) |  |  | $ | (152) |  |  | $ | (601) |  |  | $ | (577) |
Accumulated benefit obligation | $ | 1,979 |  |  | $ | 1,036 |  |  | $ | 2,005 |  |  | $ | 919 |  |  |  |  |
Amounts recognized in accumulated other comprehensive income consist of: |  |  |  |  |  |  |  |  |  |  |
Prior service (credit) cost | $ | 1 |  |  | $ | (11) |  |  | $ | 2 |  |  | $ | — |  |  | $ | (105) |  |  | $ | (143) |
Actuarial losses in the projected benefit obligations for both years were primarily due to lower discount rates. In fourth quarter 2020, the Company settled approximately $110 million of one of the U.S. defined benefit pension plans' obligation to an insurer through the purchase of a nonparticipating group annuity contract. In addition, there were settlements for several pension plans where lump sum payments exceeded the sum of the service and interest cost components of net periodic benefit cost of the respective plan for the year. In 2020, the Company had a plan amendment that changed benefits provided by a Netherlands defined benefit pension plan which resulted in a remeasurement of the plan's obligation. The remeasurement resulted in a pre-tax reduction in the projected benefit obligation of $12 million which will be amortized as a prior service from accumulated other comprehensive income over approximately 13 years. Information for pension plans with projected benefit obligations in excess of plan assets:
(Dollars in millions) | 2020 |  | 2019
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
Projected benefit obligation | $ | 2,050 |  |  | $ | 769 |  |  | $ | 1,673 |  |  | $ | 972 |
Fair value of plan assets | 1,798 |  |  | 617 |  |  | 1,512 |  |  | 820 |
Information for pension plans with accumulated benefit obligations in excess of plan assets:
(Dollars in millions) | 2020 |  | 2019
| U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
Projected benefit obligation | $ | 2,050 |  |  | $ | 718 |  |  | $ | 1,673 |  |  | $ | 651 |
Accumulated benefit obligation | 1,979 |  |  | 693 |  |  | 1,611 |  |  | 625 |
Fair value of plan assets | 1,798 |  |  | 574 |  |  | 1,512 |  |  | 513 |
Postretirement benefit plans with accumulated benefit obligations in excess of plan assets are $658 million and $627 million at December 31, 2020 and 2019, respectively. The plans have no assets. Summary of Benefit Costs and Other Amounts Recognized in Other Comprehensive Income
| Pension Plans |  | Postretirement Benefit Plans
| 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
(Dollars in millions) | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  |  |  |  |  |
Components of net periodic benefit (credit) cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 25 |  |  | $ | 17 |  |  | $ | 27 |  |  | $ | 14 |  |  | $ | 35 |  |  | $ | 14 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost | 57 |  |  | 15 |  |  | 76 |  |  | 20 |  |  | 67 |  |  | 20 |  |  | 19 |  |  | 25 |  |  | 22 |
Expected return on plan assets | (135) |  |  | (34) |  |  | (128) |  |  | (32) |  |  | (147) |  |  | (37) |  |  | (5) |  |  | (5) |  |  | (5) |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service (credit) cost | 1 |  |  | (1) |  |  | — |  |  | — |  |  | (1) |  |  | 1 |  |  | (38) |  |  | (39) |  |  | (40) |
Mark-to-market pension and other postretirement benefits (gain) loss, net | 163 |  |  | 28 |  |  | 39 |  |  | 43 |  |  | 89 |  |  | 36 |  |  | 49 |  |  | 61 |  |  | (26) |
Net periodic benefit (credit) cost | $ | 111 |  |  | $ | 25 |  |  | $ | 14 |  |  | $ | 45 |  |  | $ | 43 |  |  | $ | 34 |  |  | $ | 25 |  |  | $ | 42 |  |  | $ | (49) |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current year prior service credit (cost) | $ | — |  |  | $ | 12 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service (credit) cost | 1 |  |  | (1) |  |  | — |  |  | — |  |  | (1) |  |  | 1 |  |  | (38) |  |  | (39) |  |  | (40) |
Total | $ | 1 |  |  | $ | 11 |  |  | $ | — |  |  | $ | — |  |  | $ | (1) |  |  | $ | 1 |  |  | $ | (38) |  |  | $ | (39) |  |  | $ | (40) |
Plan Assumptions The assumptions used to develop the projected benefit obligation for Eastman's significant U.S. and non-U.S. defined benefit pension plans and U.S. postretirement benefit plans are provided in the following tables.
| Pension Plans |  | Postretirement Benefit Plans
| 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Weighted-average assumptions used to determine benefit obligations for years ended December 31: | U.S. | Non-U.S. |  | U.S. | Non-U.S. |  | U.S. | Non-U.S. |  |  |  |  |  |
Discount rate | 2.48 | % | 1.08 | % |  | 3.25 | % | 1.56 | % |  | 4.29 | % | 2.35 | % |  | 2.38 | % |  | 3.21 | % |  | 4.26 | %
Interest crediting rate | 5.50 | % | N/A |  | 5.52 | % | N/A |  | 5.54 | % | N/A |  | N/A |  | N/A |  | N/A
Rate of compensation increase | 2.75 | % | 2.94 | % |  | 3.25 | % | 2.94 | % |  | 3.25 | % | 2.94 | % |  | N/A |  | 3.25 | % |  | 3.25 | %
Health care cost trend |  |  |  |  |  |  |  |  |  |  |  |  |  |
Initial |  |  |  |  |  |  |  |  |  | 6.25 | % |  | 6.50 | % |  | 6.50 | %
Decreasing to ultimate trend of |  |  |  |  |  |  |  |  |  | 5.00 | % |  | 5.00 | % |  | 5.00 | %
in year |  |  |  |  |  |  |  |  |  | 2026 |  | 2026 |  | 2025
Weighted-average assumptions used to determine net periodic cost for years ended December 31: | U.S. | Non-U.S. |  | U.S. | Non-U.S. |  | U.S. | Non-U.S. |  |  |  |  |  |
Discount rate | 3.25 | % | 1.56 | % |  | 4.29 | % | 2.35 | % |  | 3.57 | % | 2.25 | % |  | 3.21 | % |  | 4.26 | % |  | 3.54 | %
Discount rate for service cost | 3.31 | % | 1.56 | % |  | 4.32 | % | 2.35 | % |  | 3.64 | % | 2.25 | % |  | 2.92 | % |  | 4.05 | % |  | 3.28 | %
Discount rate for interest cost | 2.83 | % | 1.56 | % |  | 3.96 | % | 2.35 | % |  | 3.18 | % | 2.25 | % |  | 2.80 | % |  | 3.93 | % |  | 3.14 | %
Expected return on assets | 7.37 | % | 4.26 | % |  | 7.43 | % | 4.49 | % |  | 7.48 | % | 4.83 | % |  | 3.75 | % |  | 3.75 | % |  | 3.75 | %
Rate of compensation increase | 3.25 | % | 2.94 | % |  | 3.25 | % | 2.94 | % |  | 3.25 | % | 2.95 | % |  | 3.25 | % |  | 3.25 | % |  | 3.25 | %
Interest crediting rate | 5.52 | % | N/A |  | 5.54 | % | N/A |  | 5.55 | % | N/A |  | N/A |  | N/A |  | N/A
Health care cost trend |  |  |  |  |  |  |  |  |  |  |  |  |  |
Initial |  |  |  |  |  |  |  |  |  | 6.50 | % |  | 6.50 | % |  | 6.75 | %
Decreasing to ultimate trend of |  |  |  |  |  |  |  |  |  | 5.00 | % |  | 5.00 | % |  | 5.00 | %
in year |  |  |  |  |  |  |  |  |  | 2026 |  | 2025 |  | 2025
The Company calculates service and interest cost components of net periodic benefit costs for its significant defined benefit pension and other postretirement benefit plans by applying the specific spot rates along the yield curve to the plans' projected cash flows. The fair value of plan assets for the U.S. pension plans at December 31, 2020 and 2019 was $1.8 billion and $1.9 billion, respectively, while the fair value of plan assets at December 31, 2020 and 2019 for non-U.S. pension plans was $938 million and $820 million, respectively. At December 31, 2020 and 2019, the expected weighted-average long-term rate of return on U.S. pension plan assets was 7.29 percent and 7.37 percent, respectively. The expected weighted-average long-term rate of return on non-U.S. pension plans assets was 4.04 percent and 4.26 percent at December 31, 2020 and 2019, respectively. Plan Assets The following tables reflect the fair value of the defined benefit pension plans assets.
(Dollars in millions) |  |  |  |  | Fair Value Measurements at December 31, 2020
Description | Total Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Pension Assets: | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
Cash and Cash Equivalents (1) | $ | 47 |  |  | $ | 103 |  |  | $ | 47 |  |  | $ | 103 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Public Equity - United States (2) | 1 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other Investments (3) | — |  |  | 68 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 68 |
Total Assets at Fair Value | $ | 48 |  |  | $ | 171 |  |  | $ | 48 |  |  | $ | 103 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 68 |
Investments Measured at Net Asset Value (4) | 1,750 |  |  | 767 |  |  |  |  |  |  |  |  |  |  |  |  |
Total Assets | $ | 1,798 |  |  | $ | 938 |  |  |  |  |  |  |  |  |  |  |  |  |
(Dollars in millions) |  |  |  |  | Fair Value Measurements at December 31, 2019
Description | Total Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Pension Assets: | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S. |  | U.S. |  | Non-U.S.
Cash and Cash Equivalents (1) | $ | 35 |  |  | $ | 72 |  |  | $ | 35 |  |  | $ | 72 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Public Equity - United States (2) | 1 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other Investments (3) | — |  |  | 57 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 57 |
Total Assets at Fair Value | $ | 36 |  |  | $ | 129 |  |  | $ | 36 |  |  | $ | 72 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 57 |
Investments Measured at Net Asset Value (4) | 1,883 |  |  | 691 |  |  |  |  |  |  |  |  |  |  |  |  |
Total Assets | $ | 1,919 |  |  | $ | 820 |  |  |  |  |  |  |  |  |  |  |  |  |
(1)Cash and Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts. (2)Public Equity - United States: Common stock equity securities which are primarily valued using a market approach based on the quoted market prices. (3)Other Investments: Primarily consist of insurance contracts which are generally valued using a crediting rate that approximates market returns and investments in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques. (4)Investments Measured at Net Asset Value: The underlying debt, public equity, and public real asset investments in this category are generally held in common trust funds, which are either actively or passively managed investment vehicles, that are valued at the net asset value per unit/share multiplied by the number of units/shares held as of the measurement date. The other alternative investments in this category are valued under the practical expedient method which is based on the most recently reported net asset value provided by the management of each private investment fund, adjusted as appropriate, for any lag between the date of the financial reports and the measurement date. The following tables reflect the fair value of the postretirement benefit plan assets. The postretirement benefit plan is for the voluntary employees' beneficiary association ("VEBA") trust the Company assumed as part of the Solutia acquisition.
(Dollars in millions) |  |  | Fair Value Measurements at December 31, 2020
Description | Total Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Postretirement Benefit Plan Assets: |  |  |  |  |  |  |
Cash and Cash Equivalents (1) | $ | 1 |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |
Debt (2): |  |  |  |  |  |  |
Fixed Income (U.S.) | 89 |  |  | — |  |  | 89 |  |  | — |
Fixed Income (Non-U.S.) | 25 |  |  | — |  |  | 25 |  |  | — |
Total | $ | 115 |  |  | $ | 1 |  |  | $ | 114 |  |  | $ | — |
(Dollars in millions) |  |  | Fair Value Measurements at December 31, 2019
Description | Total Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Postretirement Benefit Plan Assets: |  |  |  |  |  |  |
Debt (2): |  |  |  |  |  |  |
Fixed Income (U.S.) | $ | 85 |  |  | $ | — |  |  | $ | 85 |  |  | $ | — |
Fixed Income (Non-U.S.) | 26 |  |  | — |  |  | 26 |  |  | — |
Total | $ | 111 |  |  | $ | — |  |  | $ | 111 |  |  | $ | — |
(1)Cash and Cash Equivalents: Funds generally invested in actively managed collective trust funds or interest bearing accounts. (2)Debt: The fixed income securities are primarily valued upon a market approach, using matrix pricing and considering a security's relationship to other securities for which quoted prices in an active market may be available, or an income approach, converting future cash flows to a single present value amount. Inputs used in developing fair value estimates include reported trades, broker quotes, benchmark yields, and base spreads. The Company valued assets with unobservable inputs (Level 3), primarily insurance contracts, using a crediting rate that approximates market returns and investments in underlying securities whose market values are unobservable and determined using pricing models, discounted cash flow methodologies, or similar techniques.
|  | Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|  | Other Investments(1)
(Dollars in millions) |  | Non-U.S. Pension Plans
Balance at December 31, 2018 |  | $ | 51 |
Unrealized gains |  | 5 |
Purchases, issuances, sales, and settlements |  | 1 |
Balance at December 31, 2019 |  | 57 |
Unrealized gains |  | 9 |
Purchases, issuances, sales, and settlements |  | 2 |
Balance at December 31, 2020 |  | $ | 68 |
(1)Primarily consists of insurance contracts. The following table reflects the target allocation for the Company's U.S. and non-U.S. pension and postretirement benefit plans assets for 2021 and the asset allocation at December 31, 2020 and 2019, by asset category.
| U.S. Pension Plans |  | Non-U.S. Pension Plans |  | Postretirement Benefit Plan
| 2021 Target Allocation | Plan Assets at December 31, 2020 | Plan Assets at December 31, 2019 |  | 2021 Target Allocation | Plan Assets at December 31, 2020 | Plan Assets at December 31, 2019 |  | 2021 Target Allocation | Plan Assets at December 31, 2020 | Plan Assets at December 31, 2019
Asset category |  |  |  |  |  |  |  |  |  |  |
Equity securities | 41% | 39% | 50% |  | 24% | 20% | 21% |  | —% | —% | —%
Debt securities | 39% | 43% | 37% |  | 59% | 57% | 53% |  | 100% | 100% | 100%
Real estate | 2% | 2% | 2% |  | 5% | 6% | 8% |  | —% | —% | —%
Other investments (1) | 18% | 16% | 11% |  | 12% | 17% | 18% |  | —% | —% | —%
Total | 100% | 100% | 100% |  | 100% | 100% | 100% |  | 100% | 100% | 100%
(1)U.S. primarily consists of private equity and natural resource and energy related limited partnership investments and public real assets. Non-U.S. primarily consists of annuity contracts and alternative investments. Investment Strategy Eastman's investment strategy for its defined benefit pension plans is to maximize the long-term rate of return on plan assets within an acceptable level of risk in order to meet or exceed the plan's actuarially assumed long-term rate of return and to minimize the cost of providing pension benefits. A periodic asset/liability study is conducted in order to assist in the determination and, if necessary, modification of the appropriate long-term investment policy for the plan. The investment policy establishes a target allocation range for each asset class and the fund is managed within those ranges. The plans use a number of investment approaches including investments in equity, real estate, and fixed income funds in which the underlying securities are marketable in order to achieve this target allocation. The plans also invest in private equity and other funds. Diversification is created through investments across various asset classes, geographies, fund managers, and individual securities. This investment process is designed to provide for a well-diversified portfolio with no significant concentration of risk. The investment process is monitored by an investment committee that includes senior management. Eastman's investment strategy for its VEBA trust is to invest in intermediate-term, well diversified, high quality investment instruments, with a primary objective of capital preservation. The expected rate of return for all plans was determined primarily by modeling the expected long-term rates of return for the categories of investments held by the plans and the targeted allocation percentage against various potential economic scenarios. The Company made no contributions to its U.S. defined benefit pension plans in 2020 or 2019. For 2021 calendar year, there are no minimum required cash contributions for the U.S. defined benefit pension plans under the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. The estimated future benefit payments, reflecting expected future service, as appropriate, are as follows:
| Pension Plans |  | Postretirement Benefit Plans
(Dollars in millions) | U.S. |  | Non-U.S. |  |
2021 | $ | 151 |  |  | $ | 33 |  |  | $ | 56 |
2022 | 147 |  |  | 34 |  |  | 53 |
2023 | 143 |  |  | 38 |  |  | 48 |
2024 | 135 |  |  | 39 |  |  | 47 |
2025 | 142 |  |  | 39 |  |  | 47 |
2026-2030 | 639 |  |  | 242 |  |  | 221 |

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