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PENSION PLANS AND OTHER POST RETIREMENT BENEFITS
 12 Months Ended
Jun. 30, 2023
Retirement Benefits [Abstract]  
PENSION PLANS AND OTHER POST RETIREMENT BENEFITS PENSION PLANS AND OTHER POST RETIREMENT BENEFITS
Defined Benefit Plans
The Company has 52 pension and other post retirement plans in multiple countries, including 38 defined benefit and other post retirement benefit plans which were assumed as part of the Micro Focus Acquisition (see Note 19 “Acquisitions” for more details). All of our pension and other post retirement plans are located outside of Canada and the United States. The plans are primarily located in Germany, which, as of June 30, 2023, make up approximately 64% of the total net benefit pension obligations.
Our defined benefit pension plans include a mix of final salary type plans which provide for retirement, old age, disability and survivor’s benefits. Final salary type pension plans provide benefits to members either in the form of a lump sum payment or a guaranteed level of pension payable for life in the case of retirement, disability and death. Benefits under our final salary type plans are generally based on the participant’s age, compensation and years of service as well as the social security ceiling and other factors. Many of these plans are closed to new members. The net periodic costs of these plans are determined using the projected unit credit method and several actuarial assumptions, the most significant of which are the discount rate and estimated service costs.
Other post-retirement plans include statutory plans that offer termination, indemnity or other end of service benefits. Many of these plans were assumed through our acquisitions or are required by local regulatory and statutory requirements. All of our defined benefit and other post retirement plans are included in the aggregate projected benefit obligation within “Pension liability” on our Consolidated Balance Sheets.
The Company does not intend to make any cash contributions to any defined benefit pension or post-retirement plans unless required by the local regulatory or statutory requirements. For the year ended June 30, 2023, we made cash contributions of $6.5 million (year ended June 30, 2022 and 2021—$3.7 million and $2.6 million, respectively). For Fiscal 2024, we expect to make cash contributions of $9.7 million to our defined benefit plans.
As part of the Micro Focus Acquisition (see Note 19 “Acquisitions” for more details), we assumed a total of 38 defined benefit plans, all located outside of Canada and the United States. As of June 30, 2023, these assumed plans carried a net liability of $56.6 million and are funded at 73% of the defined benefit obligations. Plan assets that partially fund these assumed defined benefit obligations are primarily classified within Level 1 and Level 2 of the fair value hierarchy and consist primarily of investments in equity and debt funds. Plan assets exclude insurance contracts with guaranteed interest rates classified as Level 3 available-for-sale financial assets of $24.6 million that do not meet the definition of a qualifying insurance policy, as they have not been pledged to the defined benefit and other post retirement plans (see Note 16 “Fair Value Measurement” for more details). As of June 30, 2023, the fair value of these acquired plan assets was $155.3 million.
The following tables provides the details of the funded status of our defined benefit pension and other post-retirement plans:
As of June 30, 2023As of June 30, 2022
Plan assets$208,363 $52,111 
Projected benefit obligations(339,179)(115,591)
Funded status$(130,816)$(63,480)
The following tables provides details of the net benefit obligations of our defined benefit pension and other post-retirement plans:
As of June 30, 2023As of June 30, 2022
Current portion of benefit obligation(1)
$4,504 $2,529 
Non-current portion of benefit obligation126,312 60,951 
Total $130,816 $63,480 
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(1) The current portion of the benefit obligation has been included within “Accrued salaries, incentives and commissions,” all within “Accounts payable and accrued liabilities” in the Consolidated Balance Sheets (see Note 10 “Accounts Payable and Accrued Liabilities”).
The following tables provides the details of the change in the benefit obligation and plan assets for the periods indicated: 
As of June 30, 2023As of June 30, 2022
Benefit obligation—beginning of fiscal year$115,591 $141,698 
Service cost6,921 4,404 
Interest cost7,091 2,271 
Benefits paid(3,293)(5,079)
Company contributions20 2 
Employee contributions1,393 50 
Plan settlement(2,789)— 
Plan amendment(221)— 
Net transfers 205,556 — 
Actuarial (gain) loss6,199 (19,649)
Foreign exchange (gain) loss2,711 (8,106)
Benefit obligation—end of period339,179 115,591 
Less: Current portion4,504 2,529 
Non-current portion of benefit obligation$334,675 $113,062 
As of June 30, 2023As of June 30, 2022
Plan assets—beginning of fiscal year$52,111 $60,379 
Benefit payments from plan assets(325)(2,436)
Expected return on plan assets5,502 1,299 
Return on plan assets(3,174)(7,859)
Company contributions3,522 1,034 
Employee contributions1,515 50 
Net transfers 150,058 — 
Plan Settlement(2,789)— 
Foreign exchange (gain) loss1,943 (356)
Plan assets—end of period$208,363 $52,111 
The following table provides details of net pension expense for the periods indicated:
 Year Ended June 30,
Pension expense:202320222021
Service cost$6,921 $4,404 $3,693 
Interest cost7,091 2,271 1,733 
Expected return of plan assets(5,502)(1,299)(214)
Amortization of actuarial (gains) losses246 1,008 1,399 
Settlement cost451 — — 
Net pension expense$9,207 $6,384 $6,611 
Service-related net periodic pension costs are recorded within operating expense and all other non-service related net periodic pension costs are classified under “Interest and other related expense, net” on our Consolidated Statements of Income.
The following table provides details of amounts recognized in Other Comprehensive Income:
 Year Ended June 30,
202320222021
Net actuarial gain (loss)$(9,017)$7,461 $4,978 
Amortization of actuarial loss (gain)246 1,008 1,399 
Settlement cost and plan amendments673 — — 
Total recognized in other comprehensive income$(8,098)$8,469 $6,377 
The following table provides details of the plan assets measured at fair value presented by asset category and fair value hierarchy for the periods indicated:
 As of June 30, 2023As of June 30, 2022
Level 1Level 2Level 3Total Level 1Level 2Level 3Total
Cash$2,924 $— $— $2,924 $2 $— $— $2 
Debt funds73,053 14,765 — 87,818 15,869 — — 15,869 
Equity funds66,975 5,745 — 72,720 10,414 — — 10,414 
Real estate funds235 72 6,420 6,727 — — — — 
Other9,497 26,625 2,052 38,174 — 24,805 1,021 25,826 
Total$152,684 $47,207 $8,472 $208,363 $26,285 $24,805 $1,021 $52,111 
The Company’s investment objective with respect to its defined benefit plan assets is to achieve an optimal rate of return over the long term while managing an appropriate level of risk to meet adequate future benefit obligations. Plan assets are managed by investment fiduciaries that determine the appropriate asset allocation, risk tolerance, fund diversification and investment strategies to achieve the long term investment objectives of the plan assets.
In determining the fair value of the defined benefit obligations as of June 30, 2023 and 2022, we used the following weighted-average key assumptions:
Year Ended June 30,
20232022
Assumptions:
Salary increases2.9 %2.7 %
Pension increases2.1 %2.0 %
Discount rate3.9 %3.6 %
Expected return on plan assets5.8 %3.3 %
Normal retirement age64 65 
Anticipated pension payments under the defined benefit plans for the fiscal years indicated below are as follows:
Fiscal years ending June 30,
2024$13,115 
202513,221 
202614,258 
202716,146 
202817,745 
2029 to 2033102,196 
Total$176,681 
Defined Contribution Plans
The Company has various defined contribution retirement plans around the world covering many of its employees. Under these plans, employees can contribute a portion of their salary to the plan and the Company makes minimum non-elective contributions, discretionary contributions, and matching contributions, depending on the terms of the specific plan. The majority of the plans are primarily located in Canada, the United States, the United Kingdom and Germany. For the year ended June 30, 2023, we made contributions of $40.0 million relating to the defined contribution retirement plans (year ended June 30, 2022 and 2021—$24.0 million and $16.4 million, respectively).