The Company sponsors a number of both funded and unfunded U.S. and non-U.S. defined benefit pension plans. Pension benefits for many of our U.S. employees are provided through non-contributory, qualified and non-qualified defined benefit plans. All non-union hourly and salaried employees joining Honeywell for the first time after December 31, 2012, are not eligible to participate in Honeywell’s U.S. defined benefit pension plans. We also sponsor defined benefit pension plans which cover non-U.S. employees who are not U.S. citizens, in certain jurisdictions, principally the UK, Netherlands, Germany, and Canada. Other pension plans outside of the U.S. are not material to the Company either individually or in the aggregate.

The Company also sponsors postretirement benefit plans that provide health care benefits and life insurance coverage mainly to U.S. eligible retirees. None of Honeywell’s U.S. employees are eligible for a retiree medical subsidy from the Company. In addition, the vast majority of Honeywell’s U.S. retirees either have no Company subsidy or have a fixed-dollar subsidy amount. This significantly limits our exposure to the impact of future health care cost increases. The retiree medical and life insurance plans are not funded. Claims and expenses are paid from our cash flows from operations.


	Pension Benefits
	U.S. Plans				Non-U.S. Plans
	2020		2019		2020		2019
Change in benefit obligation:
Benefit obligation at beginning of year	$	17,283	$	16,141	$	6,897	$	6,182
Service cost	99		82		23		22
Interest cost	461		613		106		142
Plan amendments	—		—		2		—
Actuarial (gains) losses(1)	1,331		2,064		509		708
Benefits paid	(1,100)		(1,111)		(246)		(269)
Settlements and curtailments	(21)		(507)		—		—
Foreign currency translation	—		—		291		107
Other	1		1		88		5
Benefit obligation at end of year	18,054		17,283		7,670		6,897
Change in plan assets:
Fair value of plan assets at beginning of year	18,995		17,109		7,307		6,481
Actual return on plan assets	2,475		3,458		918		863
Company contributions	46		45		116		62
Benefits paid	(1,100)		(1,111)		(246)		(269)
Settlements and curtailments	(21)		(507)		—		—
Foreign currency translation	—		—		253		165
Other	1		1		102		5
Fair value of plan assets at end of year	20,396		18,995		8,450		7,307
Funded status of plans	$	2,342	$	1,712	$	780	$	410
Amounts recognized in Consolidated Balance Sheet consist of:
Prepaid pension benefit cost(2)	$	2,695	$	2,069	$	1,688	$	1,196
Accrued pension liabilities—current(3)	(29)		(32)		(14)		(13)
Accrued pension liabilities—noncurrent(4)	(324)		(325)		(894)		(773)
Net amount recognized	$	2,342	$	1,712	$	780	$	410

(1)Actuarial losses incurred in 2020 related to our U.S. and non-U.S. plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2020 compared to December 31, 2019. Actuarial losses incurred in 2019 related to our U.S. and non-U.S. plans are primarily the result of a decrease in the discount rate assumptions used to estimate the benefit obligations as of December 31, 2019 compared to December 31, 2018.


	Other Postretirement Benefits
	2020		2019
Change in benefit obligation:
Benefit obligation at beginning of year	$	325	$	364
Service cost	—		—
Interest cost	8		14
Plan amendments	(65)		(2)
Actuarial (gains) losses	(8)		(16)
Benefits paid	(31)		(35)
Benefit obligation at end of year	229		325
Change in plan assets:
Fair value of plan assets at beginning of year	—		—
Actual return on plan assets	—		—
Company contributions	—		—
Benefits paid	—		—
Fair value of plan assets at end of year	—		—
Funded status of plans	$	(229)	$	(325)
Amounts recognized in Consolidated Balance Sheet consist of:
Accrued liabilities	$	(27)	$	(40)
Postretirement benefit obligations other than pensions(1)	(202)		(285)
Net amount recognized	$	(229)	$	(325)


Net Periodic Benefit Cost	Pension Benefits
	U.S. Plans						Non-U.S. Plans
	2020		2019		2018		2020		2019		2018
Service cost	$	99	$	82	$	140	$	23	$	22	$	26
Interest cost	461		613		573		106		142		143
Expected return on plan assets	(1,135)		(1,117)		(1,426)		(336)		(331)		(443)
Amortization of prior service (credit) cost	(42)		(42)		(43)		—		—		(1)
Recognition of actuarial losses	26		35		—		18		88		37
Settlements and curtailments	4		4		—		—		—		(3)
Net periodic benefit (income) cost	$	(587)	$	(425)	$	(756)	$	(189)	$	(79)	$	(241)


Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss	U.S. Plans						Non-U.S. Plans
	2020		2019		2018		2020		2019		2018
Actuarial (gains) losses	$	(9)	$	(277)	$	619	$	(73)	$	176	$	250
Prior service (credit) cost	—		—		—		2		—		30
Prior service credit recognized during year	42		42		43		—		—		4
Actuarial losses recognized during year	(30)		(39)		—		(18)		(88)		(37)
Foreign currency translation	—		—		—		19		14		(34)
Total recognized in other comprehensive (income) loss	$	3	$	(274)	$	662	$	(70)	$	102	$	213
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss	$	(584)	$	(699)	$	(94)	$	(259)	$	23	$	(28)


Net Periodic Benefit Cost	Other Postretirement Benefits
	Years Ended December 31,
	2020		2019		2018
Service cost	$	—	$	—	$	—
Interest cost	8		14		15
Amortization of prior service (credit) cost	(66)		(62)		(52)
Recognition of actuarial losses	—		—		3
Net periodic benefit (income) cost	$	(58)	$	(48)	$	(34)


Other Changes in Plan Assets and Benefits Obligations Recognized in Other Comprehensive (Income) Loss	Years Ended December 31,
	2020		2019		2018
Actuarial (gains) losses	$	(8)	$	(16)	$	(110)
Prior service (credit) cost	(65)		(2)		(34)
Prior service credit recognized during year	66		62		52
Actuarial losses recognized during year	—		—		(3)
Total recognized in other comprehensive (income) loss	$	(7)	$	44	$	(95)
Total recognized in net periodic benefit (income) cost and other comprehensive (income) loss	$	(65)	$	(4)	$	(129)


	Pension Benefits
	U.S. Plans						Non-U.S. Plans
	2020		2019		2018		2020		2019		2018
Actuarial assumptions used to determine benefit obligations as of December 31:
Discount rate	2.50	%	3.22	%	4.35	%	1.23	%	1.81	%	2.63	%
Expected annual rate of compensation increase	3.25	%	3.25	%	3.25	%	2.43	%	2.47	%	2.46	%
Actuarial assumptions used to determine net periodic benefit (income) cost for years ended December 31:
Discount rate—benefit obligation	3.22	%	4.35	%	3.68	%	1.81	%	2.63	%	2.36	%
Discount rate—service cost	3.33	%	4.47	%	3.77	%	1.48	%	2.26	%	2.20	%
Discount rate—interest cost	2.76	%	3.94	%	3.27	%	1.56	%	2.34	%	2.08	%
Expected rate of return on plan assets	6.15	%	6.75	%	7.75	%	4.66	%	5.14	%	6.23	%
Expected annual rate of compensation increase	3.25	%	3.25	%	4.50	%	2.47	%	2.46	%	2.49	%


	Other Postretirement Benefits
	2020		2019		2018
Actuarial assumptions used to determine benefit obligations as of December 31:
Discount rate	2.20	%	3.03	%	4.07	%
Actuarial assumptions used to determine net periodic benefit cost for years ended December 31:
Discount rate(1)	2.36	%	4.07	%	3.39	%

The discount rate for the Company's U.S. pension and other postretirement benefits plans reflects the current rate at which the associated liabilities could be settled at the measurement date of December 31. To determine discount rates for our U.S. pension and other postretirement benefit plans, we use a modeling process that involves matching the expected cash outflows of our benefit plans to a yield curve constructed from a portfolio of high quality, fixed-income debt instruments. We use the single weighted-average yield of this hypothetical portfolio as a discount rate benchmark. We utilize a full yield curve approach in the estimation of the service and interest cost components of net periodic pension benefit (income) for our significant pension plans. This approach applies the specific spot rates along the yield curve used in the determination of the pension benefit obligation to their underlying projected cash flows and provides a more precise measurement of service and interest costs by improving the correlation between projected cash flows and their corresponding spot rates. For our U.S. pension plans, the single weighted average spot rates used to determine service and interest costs for 2021 are 2.67% and 1.76%. The discount rate used to determine the other postretirement benefit obligation is lower principally due to a shorter expected duration of other postretirement plan obligations as compared to pension plan obligations.

The Company plans to use an expected rate of return on U.S. plan assets of 6.15% for 2021, matching the 6.15% assumption used for 2020. Our asset return assumption is based on historical plan asset returns over varying long-term periods combined with current market conditions and broad asset mix considerations with a focus on long-term trends rather than short-term market conditions. We review the expected rate of return on an annual basis and revise it as appropriate.

The Company's asset investment strategy for our U.S. pension plans focuses on maintaining a diversified portfolio using various asset classes in order to achieve our long-term investment objectives on a risk adjusted basis. During 2020, we continued to employ a de-risking strategy which increases the matching characteristics of our assets relative to our obligation. Our long-term target allocations are as follows: 55%-70% fixed income securities and cash, 25%-40% equity securities, 5%-10% real estate investments, and 10%-20% other types of investments. Equity securities include publicly-traded stock of companies located both inside and outside the United States. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. Treasuries. Real estate investments include direct investments in commercial properties and investments in real estate funds. Other types of investments include investments in private equity and hedge funds that follow several different strategies. We review our assets on a regular basis to ensure that we are within the targeted asset allocation ranges and, if necessary, asset balances are adjusted back within target allocations.

The Company's non-U.S. pension assets are typically managed by decentralized fiduciary committees with the Honeywell Corporate Investments group providing funding and investment guidance. Our non-U.S. investment policies are different for each country as local regulations, funding requirements, and financial and tax considerations are part of the funding and investment allocation process in each country.

In accordance with ASU 2015-07, “Fair Value Measurement (Topic 820)”, certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the following tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension benefits plan assets.


	U.S. Plans
	December 31, 2020
	Total		Level 1		Level 2		Level 3
Equities:
Honeywell common stock	$	3,319	$	3,319	$	—	$	—
U.S. equities	—		—		—		—


Fixed income:
Short term investments	1,314		1,314		—		—
Government securities	1,520		—		1,520		—
Corporate bonds	10,190		—		10,190		—
Mortgage/Asset-backed securities	982		—		982		—
Insurance contracts	7		—		7		—
Direct investments:
Direct private investments	1,220		—		—		1,220
Real estate properties	651		—		—		651
Total	19,203		$	4,633	$	12,699	$	1,871
Investments measured at NAV:
Private funds	1,105
Real estate funds	26

Commingled Funds	62
Total assets at fair value	$	20,396


	U.S. Plans
	December 31, 2019
	Total		Level 1		Level 2		Level 3
Equities:
Honeywell common stock	$	2,857	$	2,857	$	—	$	—
U.S. equities	1,227		1,227		—		—


Fixed income:
Short term investments	1,395		1,395		—		—
Government securities	1,146		—		1,146		—
Corporate bonds	8,603		—		8,603		—
Mortgage/Asset-backed securities	1,023		—		1,023		—
Insurance contracts	8		—		8		—
Direct investments:
Direct private investments	950		—		—		950
Real estate properties	619		—		—		619
Total	17,828		$	5,479	$	10,780	$	1,569
Investments measured at NAV:
Private funds	1,019
Real estate funds	42

Commingled funds	106
Total assets at fair value	$	18,995


	Non-U.S. Plans
	December 31, 2020
	Total		Level 1		Level 2		Level 3
Equities:
U.S. equities	$	207	$	—	$	207	$	—
Non-U.S. equities	1,614		66		1,548		—
Fixed income:
Short-term investments	596		596		—		—
Government securities	3,105		—		3,105		—
Corporate bonds	1,649		—		1,649		—
Mortgage/Asset-backed securities	93		—		93		—
Insurance contracts	142		—		142		—
Insurance buy-in contracts	767		—		—		767
Investments in private funds:
Private funds	65		—		36		29
Real estate funds	147		—		—		147
Total	8,385		$	662	$	6,780	$	943
Investments measured at NAV:
Private funds	18
Real estate funds	47
Total assets at fair value	$	8,450


	Non-U.S. Plans
	December 31, 2019
	Total		Level 1		Level 2		Level 3
Equities:
U.S. equities	$	149	$	—	$	149	$	—
Non-U.S. equities	1,384		54		1,330		—
Fixed income:
Short-term investments	522		522		—		—
Government securities	3,006		—		3,006		—
Corporate bonds	1,746		—		1,746		—
Mortgage/Asset-backed securities	84		—		84		—
Insurance contracts	120		—		120		—
Insurance buy-in contracts	—		—		—		—
Investments in private funds:
Private funds	69		—		35		34
Real estate funds	150		—		—		150
Total	7,230		$	576	$	6,470	$	184
Investments measured at NAV:
Private funds	21
Real estate funds	56
Total assets at fair value	$	7,307


	U.S. Plans				Non-U.S. Plans
	Direct Private Investments		Real Estate Properties		Private Funds		Real Estate Funds		Insurance Buy-in Contracts
Balance at December 31, 2018	$	829	$	657	$	34	$	144	$	—
Actual return on plan assets:
Relating to assets still held at year-end	15		40		—		7		—
Relating to assets sold during the year	89		(23)		—		1		—
Purchases	216		48		—		—		—
Sales and settlements	(199)		(103)		—		(2)		—
Balance at December 31, 2019	950		619		34		150		—
Actual return on plan assets:
Relating to assets still held at year-end	100		(4)		(5)		(3)		—
Relating to assets sold during the year	53		—		—		—		—
Purchases	221		59		—		—		767
Sales and settlements	(104)		(23)		—		—		—
Balance at December 31, 2020	$	1,220	$	651	$	29	$	147	$	767

The Company enters into futures contracts to gain exposure to certain markets. Sufficient cash or cash equivalents are held by our pension plans to cover the notional value of the futures contracts. At December 31, 2020 and 2019, our U.S. plans had contracts with notional amounts of $3,673 million and $4,463 million. At December 31, 2020 and 2019, our non-U.S. plans had contracts with notional amounts of $564 million and $479 million. In both our U.S. and non-U.S. pension plans, the notional derivative exposure is related to outstanding equity and fixed income futures contracts.

Common stocks, preferred stocks, real estate investment trusts, and short-term investments are valued at the closing price reported in the active market in which the individual securities are traded. Corporate bonds, mortgages/asset-backed securities, and government securities are valued either by using pricing models, bids provided by brokers or dealers, quoted prices of securities with similar characteristics or discounted cash flows and as such include adjustments for certain risks that may not be observable such as credit and liquidity risks. Certain securities are held in collective trust funds which are valued using net asset values provided by the administrators of the funds. Investments in private equity, debt, real estate and hedge funds and direct private investments are valued at estimated fair value based on quarterly financial information received from the investment advisor and/or general partner. Investments in real estate properties are valued on a quarterly basis using the income approach. Valuation estimates are periodically supplemented by third party appraisals. The insurance buy-in contracts represent policies held by the Honeywell UK Pension Scheme, whereby the cost of providing pension benefits to plan participants is funded by the policies. The cash flows from the policies are intended to match the pension benefits. The fair value of these policies is based on an estimate of the policies' exit price.

The Company's funding policy for qualified defined benefit pension plans is to contribute amounts at least sufficient to satisfy regulatory funding standards. In 2020, 2019, and 2018, we were not required to make contributions to our U.S. pension plans and no contributions were made. We are not required to make any contributions to our U.S. pension plans in 2021. In 2020, contributions of $109 million were made to our non-U.S. pension plans to satisfy regulatory funding requirements. In 2021, we expect to make contributions of cash and/or marketable securities of approximately $85 million to our non-U.S. pension plans to satisfy regulatory funding standards. Contributions for both our U.S. and non-U.S. pension plans do not reflect benefits paid directly from Company assets.