Retirement Benefits

9 Months Ended

Jun. 30, 2019

RETIREMENT BENEFITS

The components of net periodic benefit cost for our defined benefit pension plans for the three and nine months ended 30 June 2019 and 2018 were as follows:



	Pension Benefits
	2019						2018
Three Months Ended 30 June	U.S.			International			U.S.			International
Service cost		$5.4			$4.8			$6.4			$6.5
Interest cost	28.2			9.0			26.8			9.4
Expected return on plan assets	(43.2		)	(18.9		)	(50.4		)	(20.6		)
Prior service cost amortization	.3			—			.4			—
Actuarial loss amortization	16.3			2.7			21.8			10.2
Settlements	.3			—			1.5			—
Special termination benefits	—			—			—			—
Other	—			.2			—			.3
Net Periodic Benefit Cost		$7.3			($2.2	)		$6.5			$5.8




	Pension Benefits
	2019						2018
Nine Months Ended 30 June	U.S.			International			U.S.			International
Service cost		$16.1			$14.6			$19.2			$19.4
Interest cost	85.0			27.0			80.3			28.2
Expected return on plan assets	(129.4		)	(57.0		)	(151.2		)	(61.9		)
Prior service cost amortization	.9			.1			1.2			—
Actuarial loss amortization	48.9			8.3			65.7			30.5
Settlements	6.1			.2			4.8			—
Special termination benefits	.7			—			.4			—
Other	—			.6			—			.9
Net Periodic Benefit Cost		$28.3			($6.2	)		$20.4			$17.1

Our service costs are primarily included within "Cost of sales" and "Selling and administrative" on our consolidated income statements. The amount of service costs capitalized in fiscal years 2019 and 2018 was not material. The non-service related costs, including pension settlement losses, are presented outside operating income within "Other non-operating income (expense), net."

Certain of our pension plans provide for a lump sum benefit payment option at the time of retirement, or for corporate officers, six months after their retirement date. A participant’s vested benefit is considered settled upon cash payment of the lump sum. We recognize pension settlements to accelerate recognition of actuarial gains or losses deferred in accumulated other comprehensive loss when cash payments exceed the sum of the service and interest cost components of net periodic benefit cost of the plan for the fiscal year. Pension settlements are reflected on our consolidated income statements within “Other non-operating income (expense), net.” For the nine months ended 30 June 2019, we recognized pension settlement losses of $6.3, of which $5.0 associated with the U.S. Supplementary Pension Plan was recognized during the second quarter.

For the nine months ended 30 June 2019 and 2018, our cash contributions to funded pension plans and benefit payments under unfunded pension plans were $31.0 and $43.0, respectively. Total contributions for fiscal year 2019 are expected to be approximately $45 to $65. During fiscal year 2018, total contributions were $68.3.

U.K. Lloyds Pensions Equalization Ruling

On 26 October 2018, the United Kingdom High Court issued a ruling related to the equalization of pension plan participants’ benefits for the gender effects of Guaranteed Minimum Pensions. As a result of this ruling, we estimated the impact of retroactively increasing benefits in our U.K. plan in accordance with the High Court ruling. We treated the additional benefits as a prior service cost, which resulted in an increase to our projected benefit obligation and accumulated other comprehensive loss of $4.7 during the first quarter of fiscal year 2019. We will amortize this cost over the average remaining life expectancy of the U.K. participants. Given the immaterial effect on the U.K. plan's projected benefit, an interim remeasurement was not performed.