
	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Change in benefit obligation
Benefit obligation at beginning of period	$	1,659	$	2,024
Service cost		38		44
Interest cost		55		32
Plan participants’ contributions		3		4
Actuarial losses (gains)*		83		(299)
Benefits paid from trust		(24)		(15)
Direct benefit payments		(38)		(37)
Business combination/divestiture		(23)		—
Foreign exchange impact		(23)		(66)
Amendments, curtailments, settlements and other		(61)		(29)
Benefit obligation at end of period	$	1,670	$	1,659
Accumulated benefit obligation	$	1,583	$	1,574
Change in plan assets
Fair value of plan assets at beginning of period	$	1,226	$	1,383
Actual return on plan assets		87		(88)
Employer contributions		14		27
Fair value of plan assets assumed from former Parent**		27		—
Plan participants’ contributions		3		4
Benefits paid from trust		(24)		(15)
Business combination/divestiture		(18)		—
Foreign exchange impact		(18)		(40)
Settlements		(49)		(44)
Fair value of plan assets at end of period	$	1,248	$	1,226
Funded status at end of period	$	(422)	$	(433)

*	The year-over-year change was primarily driven by lower inflation rates and demographic factors.

**	Due to the separation of a pension plan that used to be co-sponsored by Kyndryl and the former Parent.

Net funded status


	At March 31,		At March 31,
(Dollars in millions)	2024		2023
Noncurrent assets – pension assets	$	105	$	94
Current liabilities – accrued compensation and benefits		(40)		(38)
Noncurrent liabilities – retirement and nonpension postretirement benefit obligations		(487)		(489)
Funded status, net	$	(422)	$	(433)

Pretax net loss and prior service costs (credits) recognized in OCI and the changes in pretax net loss and prior service costs (credits) as well as Separation-related transfers from Parent recognized in AOCI


	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Net loss (gain) at beginning of period	$	253	$	474
Current period loss (gain)		57		(172)
Curtailments and settlements		(10)		(10)
Amortization of net loss included in net periodic benefit cost		(4)		(39)
Net loss (gain) at end of period	$	296	$	253
Prior service costs (credits) at beginning of period		8		9
Current period prior service costs (credits)		(2)		—
Amortization for prior service costs (credits) included in net periodic benefit cost		(1)		(1)
Prior service costs (credits) at end of period	$	4	$	8
Total amounts recognized in accumulated other comprehensive loss (income) *	$	301	$	261

*

See Note 14 – Equity for the total change in AOCI and the Consolidated Statement of Comprehensive Income for the components of net periodic benefit cost, which includes components related to nonpension postretirement benefit plans as well as the related tax effects, recognized in OCI for the retirement-related benefit plans.

Defined benefit pension plans' asset classes and their associated fair value


	At March 31, 2024								At March 31, 2023
(Dollars in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity
Equity securities	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Fixed income
Government and related ⁽¹⁾		—		112		—		112		—		107		—		107
Corporate bonds		—		21		—		21		—		20		—		20
Insurance contracts		—		189		—		189		—		191		—		191
Cash and short-term investments ⁽²⁾		3		1		—		3		3		—		—		3
Derivative assets ⁽³⁾		—		5		—		5		—		5		—		5
Subtotal	$	3	$	327	$	—	$	329	$	3	$	322	$	—	$	326
Investments measured at net asset value using NAV as a practical expedient ⁽⁴⁾		—		—		—		919		—		—		—		901
Fair value of plan assets	$	3	$	327	$	—	$	1,248	$	3	$	322	$	—	$	1,226

(1)	Includes debt issued by national, state and local governments and agencies.

(2)	Includes cash, cash equivalents and short-term marketable securities.

(3)	Includes forward contracts, interest rate swaps, exchange traded and other over-the-counter derivatives.

(4)	Investments measured at fair value using the net asset value (NAV) per share (or its equivalent), as a practical expedient. These investments include commingled funds, hedge funds, common collective trusts, private equity partnerships and real estate partnerships.