v3.26.3
Retirement Benefits
 12 Months Ended
Sep. 30, 2026
Retirement Benefits [Abstract]  
Retirement Benefits Retirement Benefits
We sponsor funded and unfunded pension plans and other postretirement benefit plans for our employees. The pension plans provide for monthly pension payments to eligible employees after retirement. Pension benefits for salaried employees generally are based on years of credited service and average earnings. Pension benefits for hourly employees are primarily based on specified benefit amounts and years of service. Effective July 1, 2010, we closed participation in our U.S. and Canada pension plans to employees hired after June 30, 2010. Employees hired after June 30, 2010, are instead eligible to participate in defined contribution plans. Effective October 1, 2010, we also closed participation in our U.K. pension plan to employees hired after September 30, 2010, and these employees are now eligible for a defined contribution plan. Benefits to be provided to plan participants hired before July 1, 2010, or October 1, 2010, respectively, are not affected by these changes. Our policy with respect to funding our pension obligations is to fund at a minimum the amount required by applicable laws and governmental regulations. We were not required to make contributions to satisfy minimum funding requirements in our U.S. pension plans in 2026, 2025, or 2024. We made a voluntary contribution of $70 million to our U.S. qualified pension plan in 2025. We did not make voluntary contributions to our U.S. qualified pension plan in 2026 or 2024.
We sponsor various defined contribution savings plans that allow eligible employees to contribute a portion of their income in accordance with plan specific guidelines. We contribute to savings plans and/or will match a percentage of the employee contributions up to certain limits. The Company contributions to defined contribution plans are based on age and years of service and range from 3 percent to 7 percent of eligible compensation. Expense related to these plans was $90 million in 2026, $85 million in 2025, and $92 million in 2024.
Other postretirement benefits are primarily in the form of retirement medical plans that cover certain employees in the U.S. and Canada and provide for the payment of certain medical costs of eligible employees and dependents after retirement. The postretirement benefit plan was closed to employees hired after December 31, 2004.
Net Periodic Benefit Cost
The components of net periodic benefit cost were (in millions):
Pension BenefitsOther Postretirement Benefits
202620252024202620252024
Service cost$38 $41 $37 $1 $1 $1 
Interest cost137 136 147 2 2 3 
Expected return on plan assets(170)(167)(170)— — — 
Amortization of net actuarial loss (gain)16 27 (1)2 2 1 
Settlement and curtailment charges11 1 — — — — 
Net periodic benefit cost$32 $38 $13 $5 $5 $5 
The service cost component is included in Cost of sales, Selling, general and administrative expenses, and Engineering and development in the Consolidated Statement of Operations. All other components are included in Other income (expense) in the Consolidated Statement of Operations.
In August 2026, we executed an agreement to transfer $247 million of pension plan obligations to an insurance company related to our qualified U.S. pension plan. This transaction was funded with existing plan assets of $233 million. The transfer did not change the benefits to be received by the affected participants. We recognized an $11 million pre-tax loss related to the settlement charge, which was recorded in Other income (expense) in the Consolidated Statement of Operations.
Significant assumptions used in determining net periodic benefit cost were (in weighted averages):
Pension BenefitsOther Postretirement Benefits
202620252024202620252024
U.S. Plans
Discount rate5.35 %5.10 %6.10 %5.05 %4.91 %5.95 %
Expected return on plan assets7.00 %7.00 %7.00 %— — — 
Compensation increase rate3.50 %3.60 %3.60 %— — — 
Non-U.S. Plans
Discount rate4.07 %3.87 %4.65 %4.45 %4.45 %5.75 %
Expected return on plan assets5.31 %5.24 %5.13 %— — — 
Compensation increase rate2.85 %3.22 %3.24 %— — — 
Net Benefit Obligation
Benefit obligation, plan assets, funded status, and net liability information is summarized as follows (in millions):
Pension BenefitsOther Postretirement Benefits
2026202520262025
Benefit obligation at beginning of year$2,931 $3,078 $41 $45 
Service cost38 41 1 1 
Interest cost137 136 2 2 
Actuarial (gains) losses(297)(123)3 4 
Plan participant contributions2 2 6 5 
Benefits paid(161)(208)(15)(15)
Settlements and curtailments (299)(5)— — 
Divestiture— — (2)— 
Currency translation and other(21)10 — (1)
Benefit obligation at end of year2,330 2,931 36 41 
Plan assets at beginning of year2,810 2,779 — — 
Actual return on plan assets147 143 — — 
Company contributions15 88 9 10 
Plan participant contributions2 2 6 5 
Benefits paid(161)(208)(15)(15)
Settlements and curtailments(299)(4)— — 
Currency translation and other(26)10 — — 
Plan assets at end of year2,488 2,810 — — 
Funded status of plans$158 $(121)$(36)$(41)
Net amount on balance sheet consists of
Other assets$435 $222 $— $— 
Compensation and benefits(20)(20)(6)(6)
Retirement benefits(257)(323)(30)(35)
Net amount on balance sheet$158 $(121)$(36)$(41)
The actuarial gains recorded within the benefit obligation in 2026 were primarily the result of an increase in the discount rate for the U.S. Plans, which increased from 5.35 percent in 2025 to 6.70 percent in 2026. The actuarial gains recorded within the benefit obligation in 2025 were primarily the result of an increase in the discount rate for the U.S. Plans, which increased from 5.10 percent in 2024 to 5.35 percent in 2025. Approximately 65 percent of our 2026 global projected benefit obligation relates to our U.S. pension plan.
Amounts included in Accumulated other comprehensive loss, net of tax, which have not yet been recognized in net periodic benefit cost are as follows (in millions):
Pension BenefitsOther Postretirement Benefits
2026202520262025
Prior service (credit) cost$(164)$(154)$4 $4 
Net actuarial loss255 475 11 10 
Total$91 $321 $15 $14 
During 2026, we recognized settlement and curtailment charges of $11 million ($9 million net of tax) and net actuarial losses of $18 million ($14 million net of tax) in pension and other postretirement net periodic benefit cost, which were included in Accumulated other comprehensive loss at September 30, 2025.
The accumulated benefit obligation for our pension plans was $2,185 million and $2,771 million at September 30, 2026 and 2025, respectively.
Information regarding our pension plans with projected benefit obligations in excess of the fair value of plan assets (underfunded plans) are as follows (in millions):
20262025
Projected benefit obligation$300 $2,185 
Fair value of plan assets22 1,842 
Information regarding our pension plans with accumulated benefit obligations in excess of the fair value of plan assets (underfunded plans) are as follows (in millions):
20262025
Accumulated benefit obligation$231 $274 
Fair value of plan assets2 9 
Significant assumptions used in determining the benefit obligations were (in weighted averages):
Pension BenefitsOther Postretirement Benefits
2026202520262025
U.S. Plans
Discount rate6.70 %5.35 %6.30 %5.07 %
Compensation increase rate3.50 %3.50 %— — 
Health care cost trend rate (1)
— — 9.11 %7.53 %
Non-U.S. Plans
Discount rate4.84 %4.07 %5.30 %4.45 %
Compensation increase rate2.88 %2.85 %— — 
Health care cost trend rate (1)
— — 4.50 %4.50 %
(1) The health care cost trend rate reflects the estimated increase in gross medical claims costs. As a result of the plan amendment adopted effective October 1, 2002, our effective per person retiree medical cost increase is zero percent beginning in 2005 for the majority of our postretirement benefit plans. For our other plans, we assume the gross health care cost trend rate will increase to 9.11 percent in 2027 and subsequently decrease to the expected terminal rate of 5.00 percent in 2035 for U.S. Plans and will not change in future periods for Non-U.S. Plans.
Estimated Future Payments
We expect to contribute $35 million related to our global pension plans and $6 million to our postretirement benefit plans in 2027.
The following benefit payments, which include employees’ expected future service, as applicable, are expected to be paid (in millions):
Pension BenefitsOther
Postretirement Benefits
2027$223 $6 
2028216 5 
2029212 5 
2030210 4 
2031215 4 
2032-20361,003 14 
Plan Assets
In determining the expected long-term rate of return on assets assumption, we consider actual returns on plan assets over the long term, adjusted for forward-looking considerations, such as inflation, interest rates, equity performance, and the active management of the plan’s invested assets. We also considered our current and expected mix of plan assets in setting this assumption. This resulted in the selection of the weighted average long-term rate of return on assets assumption. Our global weighted average targeted and actual asset allocations at September 30, by asset category, are:
TargetSeptember 30,
Asset CategoryAllocations20262025
Equity securities32%36%45%
Debt securities54%55%46%
Other14%9%9%
The investment objective for pension funds related to our defined benefit plans is to meet the plan’s benefit obligations, while maximizing the long-term growth of assets without undue risk. We strive to achieve this objective by investing plan assets within target allocation ranges and diversification within asset categories. Target allocation ranges are guidelines that are adjusted periodically based on ongoing monitoring by plan fiduciaries. Investment risk is controlled by rebalancing to target allocations on a periodic basis and ongoing monitoring of investment manager performance relative to the investment guidelines established for each manager.
As of September 30, 2026 and 2025, our pension plans do not directly own our common stock.
In certain countries where we operate, there are no legal requirements or financial incentives provided to companies to pre-fund pension obligations. In these instances, we typically make benefit payments directly from cash as they become due, rather than by creating a separate pension fund.
The valuation methodologies used for our pension plans’ investments measured at fair value are described as follows. There have been no changes in the methodologies used at September 30, 2026 and 2025.
Preferred and common stock — Valued at the closing price reported on the active market on which the individual securities are traded.
Mutual funds — Valued at the closing price reported on the active market on which the individual funds are traded.
Preferred and corporate debt — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.
Government securities — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets.
Common collective trusts — Valued by the custodian of the fund based on the fair value of the underlying assets owned by the fund, minus its liabilities, then divided by the number of units outstanding. This amount represents the readily determinable fair value and basis for current transactions.
Private equity and alternative equity — Valued at the estimated fair value, as determined by and subject to the judgment of, the respective fund manager based on the NAV of the investment units held at year end.
Real estate funds — Consists of the real estate funds, which provide an indirect investment into a diversified and multi-sector portfolio of property assets. Publicly-traded real estate funds are valued at the most recent closing price reported on the SIX Swiss Exchange. The remainder is valued at the estimated fair value, as determined by the respective fund manager, based on the NAV of the investment units held at year end, which is subject to judgment.
Insurance contracts — Valued at the aggregate amount of accumulated contribution and investment income, less amounts used to make benefit payments and administrative expenses, which approximates fair value.
Other — Consists of other fixed income investments and common collective trusts with a mix of equity and fixed income underlying assets. Other fixed income investments are valued at the most recent closing price reported in the markets in which the individual securities are traded, which may be infrequently.
Refer to Note 1 for further information regarding levels in the fair value hierarchy.
In accordance with ASC Subtopic 820-10, certain investments that are measured at fair value using the NAV (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the consolidated financial statements.
The following table presents our pension plans’ investments measured at fair value as of September 30, 2026 (in millions):
Level 1Level 2Level 3Total
U.S. Plans
Cash and cash equivalents$44 $— $— $44 
Equity securities
Preferred and common stock303 — — 303 
Common collective trusts— 231 — 231 
Fixed income securities
Preferred and corporate debt— 499 — 499 
Government securities285 19 — 304 
Common collective trusts— 117 — 117 
Total U.S. Plans investments in fair value hierarchy$632 $866 $— 1,498 
U.S. Plans investments measured at NAV
Private equity and alternative equity7 
Total U.S. Plans investments1,505 
Non-U.S. Plans
Cash and cash equivalents$10 $— $— $10 
Equity securities
Preferred and common stock163 — — 163 
Common collective trusts— 204 — 204 
Fixed income securities
Preferred and corporate debt— 68 — 68 
Government securities— — — — 
Common collective trusts— 386 — 386 
Other types of investments
Real estate funds— 61 — 61 
Insurance contracts— — 66 66 
Other— — 2 2 
Total Non-U.S. Plans investments in fair value hierarchy$173 $719 $68 $960 
Non-U.S. Plans investments measured at NAV
Real estate funds23 
Total Non-U.S. Plans investments983 
Total investments measured at fair value$2,488 
The following table presents our pension plans’ investments measured at fair value as of September 30, 2025 (in millions):
Level 1Level 2Level 3Total
U.S. Plans
Cash and cash equivalents$88 $— $— $88 
Equity securities
Preferred and common stock419 — — 419 
Common collective trusts— 415 — 415 
Fixed income securities
Preferred and corporate debt— 478 — 478 
Government securities265 30 — 295 
Common collective trusts— 120 — 120 
Total U.S. Plans investments in fair value hierarchy$772 $1,043 $— 1,815 
U.S. Plans investments measured at NAV
Private equity and alternative equity6 
Total U.S. Plans investments1,821 
Non-U.S. Plans
Cash and cash equivalents$8 $— $— $8 
Equity securities
Preferred and common stock200 — — 200 
Common collective trusts— 218 — 218 
Fixed income securities
Preferred and corporate debt— 79 — 79 
Government securities1 — — 1 
Common collective trusts— 327 — 327 
Other types of investments
Real estate funds— 60 — 60 
Insurance contracts— — 73 73 
Other— — 1 1 
Total Non-U.S. Plans investments in fair value hierarchy$209 $684 $74 967 
Non-U.S. Plans investments measured at NAV
Real estate funds23 
Total Non-U.S. Plans investments989 
Total investments measured at fair value$2,810 
The table below sets forth a summary of changes in fair market value of our pension plans’ Level 3 assets for the year ended September 30, 2026 (in millions):
Balance
October 1, 2025		Realized Gains (Losses)Unrealized Gains (Losses)Purchases, Sales, Issuances, and Settlements, NetBalance September 30, 2026
Non-U.S. Plans
Insurance contracts$73 $— $(6)$(1)$66 
Other1 — — 1 2 
$74 $— $(6)$— $68 
The table below sets forth a summary of changes in fair market value of our pension plans’ Level 3 assets for the year ended September 30, 2025 (in millions):
Balance
October 1, 2024		Realized Gains (Losses)Unrealized Gains (Losses)Purchases, Sales, Issuances, and Settlements, NetBalance September 30, 2025
Non-U.S. Plans
Insurance contracts$72 $— $2 $(1)$73 
Other2 — — (1)1 
$74 $— $2 $(2)$74