Retirement Plans

6 Months Ended

Nov. 30, 2021

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

(6) Retirement Plans

We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans, and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report.

Our retirement plans costs for the periods ended November 30 were as follows (in millions):

	Three Months Ended					Six Months Ended
	2021			2020		2021			2020
Defined benefit pension plans, net	$	(2	)	$	27	$	(5	)	$	52
Defined contribution plans		171			153		351			311
Postretirement healthcare plans		23			20		45			41
Retirement plans MTM net loss		260			52		260			52
	$	452		$	252	$	651		$	456

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended November 30 included the following components (in millions):

	Three Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2021			2020			2021			2020			2021		2020
Service cost	$	208		$	212		$	14		$	26		$	12	$	11
Other retirement plans expense (income):
Interest cost		255			239			7			11			11		9
Expected return on plan assets		(477	)		(446	)		(6	)		(13	)		—		—
Amortization of prior service credit and other		(2	)		(2	)		(1	)		—			—		—
MTM net loss		36			—			224			52			—		—
		(188	)		(209	)		224			50			11		9
	$	20		$	3		$	238		$	76		$	23	$	20

	Six Months Ended
	U.S. Pension Plans						International Pension Plans						Postretirement Healthcare Plans
	2021			2020			2021			2020			2021		2020
Service cost	$	416		$	425		$	29		$	49		$	24	$	22
Other retirement plans expense (income):
Interest cost		511			479			19			21			21		19
Expected return on plan assets		(955	)		(892	)		(20	)		(25	)		—		—
Amortization of prior service credit and other		(4	)		(4	)		(1	)		(1	)		—		—
MTM net loss		36			—			224			52			—		—
		(412	)		(417	)		222			47			21		19
	$	4		$	8		$	251		$	96		$	45	$	41

For 2022, no pension contributions are required for our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) as they are fully funded under the Employee Retirement Income Security Act. We made voluntary contributions to our U.S. Pension Plans of $250 million during the first half of 2022.

In 2020, we announced the closing of our U.S.-based defined benefit pension plans to new non-union employees hired on or after January 1, 2020. We will introduce an all-401(k) plan retirement benefit structure for eligible employees with a higher company match of up to 8% across all U.S.-based operating companies in 2022. During calendar 2021, current eligible employees under the Portable Pension Account (“PPA”) pension formula were given a one-time option to continue to be eligible for pension compensation credits under the existing PPA formula and remain in the existing 401(k) plan with its match of up to 3.5%, or to cease receiving compensation credits under the PPA and move to the new 401(k) plan with the higher company match of up to 8%. Changes to the new 401(k) plan structure will become effective beginning January 1, 2022. While this new program will provide employees greater flexibility and reduce our long-term pension costs, it will not have a material impact on current or near-term financial results.

In the second quarter of 2022, we incurred a pre-tax, noncash MTM net loss of $36 million related to the U.S. FedEx Freight Pension Plan. During the second quarter of 2022, 21% of FedEx Freight employees elected to move from the current pension/401(k) benefit structure to the new 401(k)-only structure with a higher company match effective January 1, 2022. The $36 million net loss consisted of a $75 million MTM loss due to a lower discount rate, partially offset by a $39 million curtailment gain.

We incurred an additional pre-tax, noncash MTM net loss of $224 million in the second quarter of 2022 related to the termination of the TNT Express Netherlands Pension Plan. Effective October 1, 2021, the responsibility of all pension assets and liabilities of this plan was transferred to a separate, multi-employer pension plan.  

In the second quarter of 2021, we incurred a pre-tax, noncash MTM net loss of $52 million related to amendments to the TNT Express Netherlands Pension Plan. Benefits for approximately 2,100 employees were frozen effective December 31, 2020. Effective January 1, 2021, these employees began earning pension benefits under a separate, multi-employer pension plan. This $52 million net loss consisted of a $106 million MTM loss due to a lower discount rate and a $54 million curtailment gain.