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Pension and Other Postretirement Benefits (Tables)

12 Months Ended

Jun. 30, 2020

Funded Status of Pension Plans and Amount recognized in the Consolidated Balance Sheet

The funded status of our pension plans and amounts recognized in the consolidated balance sheets as of June 30 were as follows:



(in thousands)	2020			2019
Change in benefit obligation:
Benefit obligation, beginning of year	$	964,741		$	902,711
Service cost	1,796			1,627
Interest cost	27,320			31,901
Participant contributions	637			—
Actuarial losses (gains)	67,403			64,648
Benefits and expenses paid	(50,733		)	(49,510		)
Currency translation adjustments	(5,758		)	(6,208		)
Plan amendments	(231		)	1,465
New plans	—			18,107
Plan settlements	(1,286		)	—
Plan curtailments	(171		)	—
Other adjustments	287			—
Benefit obligation, end of year	$	1,004,005		$	964,741
Change in plans' assets:
Fair value of plans' assets, beginning of year	$	825,869		$	792,758
Actual return on plans' assets	96,133			68,981
Company contributions	9,721			7,905
Participant contributions	637			—
New plans	—			9,480
Plan settlements	(1,286		)	—
Benefits and expenses paid	(50,733		)	(49,510		)
Currency translation adjustments	(4,305		)	(3,745		)
Fair value of plans' assets, end of year	$	876,036		$	825,869
Funded status of plans	$	(127,969	)	$	(138,872	)
Amounts recognized in the balance sheet consist of:
Long-term prepaid benefit	$	43,116		$	31,581
Short-term accrued benefit obligation	(6,639		)	(7,624		)
Accrued pension benefits	(164,446		)	(162,829		)
Net amount recognized	$	(127,969	)	$	(138,872	)

Defined Benefit Pension Plans Recognized in Accumulated Other Comprehensive (Loss) Income

The pre-tax amounts related to our defined benefit pension plans recognized in accumulated other comprehensive loss were as follows at June 30:



(in thousands)	2020		2019
Unrecognized net actuarial losses	$	305,903	$	292,992
Unrecognized net prior service costs	2,026		2,229
Unrecognized transition obligations	332		432
Total	$	308,261	$	295,653

The pre-tax amounts related to our other postretirement benefit plans which were recognized in accumulated other comprehensive loss were as follows at June 30:



(in thousands)	2020			2019
Unrecognized net actuarial losses	$	4,602		$	4,150
Unrecognized net prior service credits	(2,200		)	(2,476		)
Total	$	2,402		$	1,674

Accumulated Benefit Obligations Exceeding Plan Assets Fair Value

Included in the above information are plans with accumulated benefit obligations exceeding the fair value of plan assets as of June 30 as follows:



(in thousands)	2020		2019
Projected benefit obligation	$	180,388	$	179,921
Accumulated benefit obligation	178,195		178,039
Fair value of plan assets	9,273		9,480

Net Periodic Pension (Income) Cost

The components of net periodic pension income include the following as of June 30:



(in thousands)	2020			2019			2018
Service cost	$	1,796		$	1,627		$	1,635
Interest cost	27,320			31,901			30,751
Expected return on plans' assets	(53,943		)	(53,789		)	(56,579		)
Amortization of transition obligation	88			91			94
Amortization of prior service cost	50			(19		)	48
Curtailment loss	(115		)	—			—
Settlement loss	(51		)	—			626
Recognition of actuarial losses	10,359			6,723			6,907
Other adjustments	288			—			—
Net periodic pension income	$	(14,208	)	$	(13,466	)	$	(16,518	)

Funded Status of Other Postretirement Benefit Plans and Amount Recognized in the Consolidated Balance Sheet

The funded status of our other postretirement benefit plans and the related amounts recognized in the consolidated balance sheets were as follows:



(in thousands)	2020			2019
Change in benefit obligation:
Benefit obligation, beginning of year	$	12,642		$	15,323
Interest cost	404			613
Actuarial losses	709			(264		)
Benefits paid	(1,390		)	(1,505		)
Plan amendments	—			(1,525		)
Benefit obligation, end of year	$	12,365		$	12,642
Funded status of plan	$	(12,365	)	$	(12,642	)
Amounts recognized in the balance sheet consist of:
Short-term accrued benefit obligation	$	(1,353	)	$	(1,468	)
Accrued postretirement benefits	(11,012		)	(11,174		)
Net amount recognized	$	(12,365	)	$	(12,642	)

Net Periodic Other Postretirement Costs (Benefit)

The components of net periodic other postretirement benefit cost include the following for the years ended June 30:



(in thousands)	2020			2019			2018
Interest cost	$	404		$	613		$	629
Amortization of prior service credit	(276		)	(90		)	(22		)
Recognition of actuarial loss	257			248			280
Net periodic other postretirement benefit cost	$	385		$	771		$	887

Significant Actuarial Assumptions Used to Determine the Present Value of Net Benefit Obligations

The significant actuarial assumptions used to determine the present value of net benefit obligations for our defined benefit pension plans and other postretirement benefit plans were as follows:



	2020	2019	2018
Discount Rate:
U.S. plans	1.6-2.9%	2.7-3.6%	4.0-4.3%
International plans	0.2-2.4%	0.4-2.9%	1.8-3.3%
Rates of future salary increases:
U.S. plans	4.0%	4.0%	4.0%
International plans	1.5%	1.8-3.0%	2.5-3.0%

The significant assumptions used to determine the net periodic income for our pension and other postretirement benefit plans were as follows:



	2020	2019	2018
Discount Rate:
U.S. plans	2.7-3.6%	4.0-4.3%	3.3-3.9%
International plans	0.4-2.9%	1.8-3.3%	2.0-3.3%
Rates of future salary increases:
U.S. plans	4.0%	4.0%	4.0%
International plans	1.8-3.0%	2.5-3.0%	2.5-3.0%
Rate of return on plans assets:
U.S. plans	7.0%	7.0%	7.3%
International plans	0.4-5.3%	5.0-5.3%	5.3%

Annual Assumed Rate of Increase in Per Capita Cost of Covered Benefits for Postretirement Benefit Plans

The annual assumed rate of increase in the per capita cost of covered benefits (the health care cost trend rate) for our postretirement benefit plans was as follows:



	2020		2019		2018
Health care costs trend rate assumed for next year	6.8	%	7.0	%	7.5	%
Rate to which the cost trend rate gradually declines	5.0	%	5.0	%	5.0	%
Year that the rate reaches the rate at which it is assumed to remain	2027		2027		2027

Asset Allocations and Target Allocations by Asset Class

Our defined benefit pension plans’ asset allocations as of June 30, 2020 and 2019 and target allocations for 2021, by asset class, were as follows:



	2020		2019		Target %
Equity	22	%	23	%	25	%
Fixed Income	75		67		75
Other	3		10		—

The following table presents the fair value of the benefit plans' assets by asset category as of June 30, 2020:



(in thousands)	Level 1		Level 2		Level 3		NAV⁽³⁾		Total
Common / collective trusts ⁽³⁾:
Blend funds	$	—	$	—	$	—	$	94,667	$	94,667
Mutual funds	—		—		—		59,674		59,674
Corporate fixed income securities	—		394,521		—		—		394,521
Common stock	38,487		—		—		—		38,487
Government securities:
U.S. government securities	—		178,364		—		—		178,364
Foreign government securities	—		61,153		—		—		61,153
Other fixed income securities	—		22,544		—		—		22,544
Other	2,410		24,216		—		—		26,626
Total investments	$	40,897	$	680,798	$	—	$	154,341	$	876,036

The following table presents the fair value of the benefit plans' assets by asset category as of June 30, 2019:



(in thousands)	Level 1		Level 2		Level 3		NAV⁽³⁾		Total
Common / collective trusts ⁽³⁾:
Value funds	$	—	$	—	$	—	$	66,950	$	66,950
Growth funds	—		—		—		38,119		38,119
Balanced funds	—		—		—		10,921		10,921
Corporate fixed income securities	—		407,008		—		—		407,008
Common stock	74,448		—		—		—		74,448
Government securities:
U.S. government securities	—		61,770		—		—		61,770
Foreign government securities	—		48,011		—		—		48,011
Other fixed income securities	—		32,971		—		—		32,971
Other	3,888		81,783		—		—		85,671
Total investments	$	78,336	$	631,543	$	—	$	115,990	$	825,869

⁽³⁾Investments in common / collective trusts invest primarily in publicly traded securities and are valued using net asset value (NAV) of units of a bank collective trust. Therefore, these amounts have not been classified in the fair value hierarchy and are presented in the tables to reconcile the fair value hierarchy to the total fair value of plan assets.