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v3.23.3

Employee Benefit Plans | 12 Months Ended
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Sep. 30, 2023
Retirement Benefits [Abstract] |
Employee Benefit Plans | Note M. Employee Benefit Plans The information below provides detail concerning the Company’s benefit obligations under the defined benefit and postretirement benefit plans it sponsors. Defined benefit plans provide pre-determined benefits to employees that are distributed upon retirement. Cabot is making all sponsor required contributions to these plans. The accumulated benefit obligation was $2 million for the U.S. defined benefit plan and $131 million for the foreign defined benefit plans as of September 30, 2023 and $2 million for the U.S. defined benefit plans and $125 million for the foreign defined benefit plans as of September 30, 2022. The U.S. defined benefit plan is the frozen Supplemental Cash Balance Plan. The following provides information about projected benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans:
|  | Years Ended September 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
Change in Benefit Obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 2 |  |  | $ | 133 |  |  | $ | 3 |  |  | $ | 221 |  |  | $ | 16 |  |  | $ | 13 |  |  | $ | 25 |  |  | $ | 19 |
Service cost |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Interest cost |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 4 |  |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
Plan participants’ contribution |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency exchange rate changes |  |  | — |  |  |  | 6 |  |  |  | — |  |  |  | (27 | ) |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | (2 | )
(Gain) loss from changes in actuarial assumptions and plan experience |  |  | — |  |  |  | (4 | ) |  |  | (1 | ) |  |  | (43 | ) |  |  | (1 | ) |  |  | (3 | ) |  |  | (4 | ) |  |  | (5 | )
Benefits paid |  |  | — |  |  |  | (5 | ) |  |  | — |  |  |  | (9 | ) |  |  | (2 | ) |  |  | (1 | ) |  |  | (3 | ) |  |  | — |
Settlem ents or curtailments |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |
Divestiture of a business |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (16 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Benefit obligation at end of year |  | $ | 2 |  |  | $ | 139 |  |  | $ | 2 |  |  | $ | 133 |  |  | $ | 14 |  |  | $ | 11 |  |  | $ | 16 |  |  | $ | 13 |
|  | Years Ended September 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
Change in Plan Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | — |  |  | $ | 135 |  |  | $ | — |  |  | $ | 217 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Actual return on plan assets |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | (35 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Employer contribution |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 5 |  |  |  | 2 |  |  |  | 1 |  |  |  | 5 |  |  |  | — |
Plan participants’ contribution |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign currency exchange rate changes |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | (24 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Benefits paid |  |  | — |  |  |  | (5 | ) |  |  | — |  |  |  | (9 | ) |  |  | (2 | ) |  |  | (1 | ) |  |  | (3 | ) |  |  | — |
Settlements or curtailments |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |
Expenses paid from assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Divestiture of a business |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (18 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Fair value of plan assets at end of year |  | $ | — |  |  | $ | 144 |  |  | $ | — |  |  | $ | 135 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Funded status |  | $ | (2 | ) |  | $ | 5 |  |  | $ | (2 | ) |  | $ | 2 |  |  | $ | (14 | ) |  | $ | (11 | ) |  | $ | (16 | ) |  | $ | (13 | )
Recognized asset (liability) |  | $ | (2 | ) |  | $ | 5 |  |  | $ | (2 | ) |  | $ | 2 |  |  | $ | (14 | ) |  | $ | (11 | ) |  | $ | (16 | ) |  | $ | (13 | )
Pension Assumptions and Strategy The following assumptions were used to determine the pension benefit obligations and periodic benefit costs as of and for the years ended September 30:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | Pension Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
Actuarial assumptions as of the year-end measurement date: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 6.0 | % |  |  | 4.7 | % |  |  | 5.5 | % |  |  | 4.5 | % |  |  | 2.2 | % |  |  | 2.1 | %
Rate of increase in compensation |  | N/A |  |  |  | 3.0 | % |  |  | 3.0 | % |  |  | 3.0 | % |  | N/A |  |  |  | 2.9 | %
Cash balance interest credit rate |  |  | 2.0 | % |  |  | 2.1 | % |  |  | 2.0 | % |  |  | 2.0 | % |  |  | 2.0 | % |  |  | 1.7 | %
Actuarial assumptions used to determine net periodic benefit cost during the year: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate - benefit obligation |  |  | 5.6 | % |  |  | 4.5 | % |  |  | 2.2 | % |  |  | 2.1 | % |  |  | 2.5 | % |  |  | 1.7 | %
Discount rate - service cost |  | N/A |  |  |  | 3.6 | % |  | N/A |  |  |  | 2.0 | % |  | N/A |  |  |  | 1.7 | %
Discount rate - interest cost |  |  | 5.3 | % |  |  | 4.5 | % |  |  | 1.6 | % |  |  | 1.7 | % |  |  | 1.4 | % |  |  | 1.4 | %
Expected long-term rate of return on plan assets |  | N/A |  |  |  | 5.1 | % |  | N/A |  |  |  | 3.5 | % |  | N/A |  |  |  | 4.6 | %
Rate of increase in compensation |  | N/A |  |  |  | 3.0 | % |  | N/A |  |  |  | 2.9 | % |  | N/A |  |  |  | 3.0 | %
Cash balance interest credit rate |  |  | 2.0 | % |  |  | 2.0 | % |  |  | 2.0 | % |  |  | 1.7 | % |  |  | 2.1 | % |  |  | 1.7 | %
Postretirement Assumptions and Strategy The following assumptions were used to determine the postretirement benefit obligations and net costs as of and for the years ended September 30:
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
Actuarial assumptions as of the year-end measurement date: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  |  | 6.0 | % |  |  | 5.7 | % |  |  | 5.6 | % |  |  | 5.1 | % |  |  | 2.4 | % |  |  | 2.8 | %
Initial health care cost trend rate(1) |  |  | 5.0 | % |  |  | 6.4 | % |  |  | — | % |  |  | 6.8 | % |  |  | 5.5 | % |  |  | 6.9 | %
Actuarial assumptions used to determine net cost during the year: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate - benefit obligation |  |  | 5.6 | % |  |  | 5.1 | % |  |  | 2.4 | % |  |  | 2.8 | % |  |  | 2.1 | % |  |  | 2.4 | %
Discount rate - service cost |  |  | 5.4 | % |  |  | 5.1 | % |  |  | 1.7 | % |  |  | 3.5 | % |  |  | 1.5 | % |  |  | 3.0 | %
Discount rate - interest cost |  |  | 5.3 | % |  |  | 5.1 | % |  |  | 1.6 | % |  |  | 2.5 | % |  |  | 1.4 | % |  |  | 2.1 | %
Initial health care cost trend rate(1) |  |  | — | % |  |  | 6.8 | % |  |  | 5.5 | % |  |  | 6.9 | % |  |  | 6.0 | % |  |  | 6.9 | %
(1) The initial health care cost trend rate is set at 5% for the 2023 U.S. plan assumptions as the 2024 Medicare Part B premiums are expected to increase. The trend rates for all future years beyond 2024 also reflect expected 5% increases. The initial health care cost trend rate was set at zero for the 2022 U.S. plan assumptions in light of the expected downward adjustment the U.S. government was expected to make to the 2023 Medicare Part B premiums, however, all trend rates beyond the initial year were set to 5%. Cabot uses discount rates as of September 30, the plans’ measurement date, to determine future benefit obligations under its U.S. and foreign defined benefit plans. The discount rates for the defined benefit plans in Canada, the Eurozone, Japan, Switzerland, the United Arab Emirates, the United Kingdom and the U.S. are derived from yield curves that reflect high quality corporate bond yield or swap rate information in each region and reflect the characteristics of Cabot’s employee benefit plans. The discount rates for the defined benefit plans in Mexico, the Czech Republic and Indonesia are based on government bond indices that best reflect the durations of the plans, adjusted for credit spreads presented in selected AA corporate bond indices. The rates utilized are selected because they represent long-term, high quality, fixed income benchmarks that approximate the long-term nature of Cabot’s pension obligations and related payouts. Amounts recognized in the Consolidated Balance Sheets at September 30, 2023 and 2022 related to the Company's defined benefit pension and postretirement benefit plans were as follows:
|  | September 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
Other assets |  | $ | — |  |  | $ | 30 |  |  | $ | — |  |  | $ | 26 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Accounts payable and accrued liabilities |  | $ | — |  |  | $ | (1 | ) |  | $ | — |  |  | $ | (1 | ) |  | $ | (2 | ) |  | $ | (1 | ) |  | $ | (2 | ) |  | $ | (1 | )
Other liabilities |  | $ | (2 | ) |  | $ | (24 | ) |  | $ | (2 | ) |  | $ | (23 | ) |  | $ | (12 | ) |  | $ | (10 | ) |  | $ | (14 | ) |  | $ | (12 | )
Amounts recognized in AOCI at September 30, 2023 and 2022 related to the Company's defined benefit pension and postretirement benefit plans were as follows:
|  | September 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
Net actuarial (gain) loss |  | $ | — |  |  | $ | 24 |  |  | $ | — |  |  | $ | 23 |  |  | $ | (6 | ) |  | $ | (7 | ) |  | $ | (6 | ) |  | $ | (4 | )
Net prior service credit |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Balance in accumulated other comprehensive (income) loss, pretax |  | $ | — |  |  | $ | 23 |  |  | $ | — |  |  | $ | 22 |  |  | $ | (6 | ) |  | $ | (7 | ) |  | $ | (6 | ) |  | $ | (4 | )
Estimated Future Benefit Payments The Company expects that the following benefit payments will be made to plan participants in the years from 2024 to 2033:
|  | Pension Benefits |  |  | Postretirement Benefits |
Years Ending September 30 |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
2024 |  | $ | — |  |  | $ | 9 |  |  | $ | 2 |  |  | $ | 1 |
2025 |  | $ | — |  |  | $ | 9 |  |  | $ | 2 |  |  | $ | 1 |
2026 |  | $ | — |  |  | $ | 9 |  |  | $ | 2 |  |  | $ | 1 |
2027 |  | $ | — |  |  | $ | 11 |  |  | $ | 2 |  |  | $ | 1 |
2028 |  | $ | — |  |  | $ | 11 |  |  | $ | 2 |  |  | $ | 1 |
2029 - 2033 |  | $ | 1 |  |  | $ | 49 |  |  | $ | 6 |  |  | $ | 4 |
Postretirement medical benefits are unfunded and impact Cabot’s cash flows as benefits become due, which is expected to be $3 million in fiscal 2024. The Company expects to contribute $4 million to its pension plans in fiscal 2024. Net periodic defined benefit pension and other postretirement benefit costs include the following components:
|  | Years Ended September 30 |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2023 |  |  | 2022 |  |  | 2021 |
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
Service cost |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | $ | 6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 3 |  |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
E xpected return on plan assets |  |  | — |  |  |  | (7 | ) |  |  | — |  |  |  | (6 | ) |  |  | — |  |  |  | (10 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
A mortizatio n of n et l osses |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 3 |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Settlements or Curtailments cost |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net periodic (benefit) cost |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 4 |  |  | $ | 5 |  |  | $ | — |  |  | $ | 1 |  |  | $ | (1 | ) |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) are as follows:
|  | Years Ended September 30 |
|  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2023 |  |  | 2022 |  |  | 2021 |
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |  |  | U.S. |  |  | Foreign |
|  | (In millions) |
Net (gains) losses |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | (2 | ) |  | $ | (2 | ) |  | $ | (15 | ) |  | $ | (1 | ) |  | $ | (3 | ) |  | $ | (4 | ) |  | $ | (4 | ) |  | $ | — |  |  | $ | (2 | )
Prior service (credit) cost |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Amortization of prior unrecognized loss |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | (1 | ) |  |  | — |  |  |  | (3 | ) |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Loss on divestiture |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
(Loss) g ain on settl ements |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Net changes recognized in Total other comprehensive (income) loss (1) |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | $ | (5 | ) |  | $ | (6 | ) |  | $ | (20 | ) |  | $ | — |  |  | $ | (3 | ) |  | $ | (3 | ) |  | $ | (4 | ) |  | $ | — |  |  | $ | (2 | )
(1) The tax impact on pension and other postretirement benefit liability adjustments arising during the period was a tax provision of less than $1 million, a tax benefit of $3 million and a tax benefit of $8 million for fiscal 2023, 2022 and 2021, respectively. U.K. Plans Termination In fiscal 2023, the Company commenced the plan termination process for the Cabot Carbon Limited Pension Plan and Carbon Plastics Pension Plan and expects to complete the transaction in fiscal 2024. Plan Assets The Company’s foreign defined benefit pension plans weighted-average asset allocations at September 30, 2023 and 2022 by asset category, are as follows:
|  | September 30 |
|  | 2023 |  |  | 2022 |
Equity securities |  |  | 19 | % |  |  | 20 | %
Debt securities |  |  | 31 | % |  |  | 68 | %
Real estate |  |  | 10 | % |  |  | 7 | %
Cash and other securities (1) |  |  | 40 | % |  |  | 5 | %
Total |  |  | 100 | % |  |  | 100 | %
(1) The asset allocation is temporarily changed as a result of the insurance contracts Cabot Carbon Limited Pension Plan and Carbon Plastics Pension Plan purchased with plan assets in anticipation of the settlement discussed above. To develop the expected long-term rate of return on plan assets assumption, the Company used a capital asset pricing model. The model considers the current level of expected returns on risk-free investments comprised of government bonds, the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns for each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return for each plan. Cabot’s investment strategy for each of its foreign defined benefit plans is generally based on a set of investment objectives and policies that cover time horizons and risk tolerance levels consistent with plan liabilities. Periodic studies are performed to determine the asset mix that will meet pension obligations at a reasonable cost to the Company. The assets of the defined benefit plans are comprised principally of investments in equity and high-quality fixed income securities, which are broadly diversified across the capitalization and style spectrum and are managed using both active and passive strategies. The weighted average target asset allocation for the foreign plans is 29% in equity, 46% in fixed income, 18% in real estate and 7% in cash and other securities. For pension plan assets classified as Level 1 measurements (measured using quoted prices in active markets), total fair value is either the price of the most recent trade at the time of the market close or the official close price, as defined by the exchange on which the asset is most actively traded on the last trading day of the period, multiplied by the number of units held without consideration of transaction costs. For pension plan assets classified as Level 2 measurements, where the security is frequently traded in less active markets, fair value is based on the closing price at the end of the period; where the security is less frequently traded, fair value is based on the price a dealer would pay for the security or similar securities, adjusted for any terms specific to that asset or liability. Market inputs are obtained from third-party vendors of market data and subjected to tolerance/quality checks. The fair value of the Company’s pension plan assets at September 30, 2023 and 2022 by asset category is as follows:
|  | September 30 |
|  | 2023 |  |  | 2022 |
|  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Total |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Total |
|  | (In millions) |
Cash |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Direct investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S government bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
U.S. corporate bonds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Non-U.S. equities |  |  | 6 |  |  |  | — |  |  |  | 6 |  |  |  | 4 |  |  |  | — |  |  |  | 4 |
Non-U.S. government bonds |  |  | 2 |  |  |  | — |  |  |  | 2 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
Non-U.S. corporate bonds |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | 2 |  |  |  | — |  |  |  | 2 |
Mortgage-backed securities |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | 1 |
Other fixed income |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
Total direct investments |  |  | 12 |  |  |  | 1 |  |  |  | 13 |  |  |  | 8 |  |  |  | 1 |  |  |  | 9 |
Investment funds: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity funds(1) |  |  | — |  |  |  | 21 |  |  |  | 21 |  |  |  | — |  |  |  | 23 |  |  |  | 23 |
Fixed income funds(2) |  |  | — |  |  |  | 38 |  |  |  | 38 |  |  |  | — |  |  |  | 86 |  |  |  | 86 |
Real estate funds(3) |  |  | — |  |  |  | 15 |  |  |  | 15 |  |  |  | — |  |  |  | 9 |  |  |  | 9 |
Cash equivalent funds |  |  | 4 |  |  |  | — |  |  |  | 4 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |
Other investment funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 1 |
Total investment funds |  |  | 4 |  |  |  | 74 |  |  |  | 78 |  |  |  | 1 |  |  |  | 119 |  |  |  | 120 |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Insurance contracts(4) |  |  | — |  |  |  | 52 |  |  |  | 52 |  |  |  | — |  |  |  | 5 |  |  |  | 5 |
Other alternative investments |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |
Total alternative investments |  |  | — |  |  |  | 53 |  |  |  | 53 |  |  |  | — |  |  |  | 5 |  |  |  | 5 |
Total pension plan assets |  | $ | 16 |  |  | $ | 128 |  |  | $ | 144 |  |  | $ | 10 |  |  | $ | 125 |  |  | $ | 135 |
(1) The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories. (2) The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low-risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds. (3) The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds. (4) Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies. Defined Contribution Plans In addition to benefits provided under the defined benefit and postretirement benefit plans, the Company provides benefits under defined contribution plans. Cabot recognized expenses related to these plans of $19 million, $15 million and $18 million in fiscal 2023, 2022 and 2021, respectively.

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